Myles McNulty Profile picture
Nov 18 18 tweets 9 min read
Trading PF update:

#HARL (5.9p entry)
#PREM (0.45p)
#ALK (120p)
#MKA (13.3p)
#BSFA (8.6p)
#CGO (6.40p)
#BOIL (0.13p)

#MMAG (+86%)
#INCE (flat)
#SPEC (+30%)

Reduced (not exited) HARL over past 24h, best return (% and £-wise) YTD.

[Entries/exits in timeline]

Volume returning really nicely to the small cap space, which is creating excellent trading conditions.

My average holding period in the Short-term Trading Portfolio is still around 16 sessions / 3 weeks.

Seemingly contrary to many, I consider trade entries based both on..

...fundamentals (see two recent successful trades in MMAG and SPEC, with rationales for trades founded on earnings metrics), and on stories and associated sentiment (BSFA being most recent example).

I don't subscribe to only utilizing one or the other; the same way as I...

...don't subscribe to being only a trader or only an investor. I run two separate portfolios for each activity, and it works for me (although it did take me a good few years to realize that trading share prices and investing in businesses are very, very different!).

Anyway to the open trades. Very basic info on each:

#HARL pause in momentum yesterday triggered the derisking for me (+ target % rtn was obliterated).

However, still holding partial position as Co remains woefully undervalued. Assume 50% of £1.6bn across 8 years, '25-'32.

£25m of gross profits pa, on this single contract. Assuming £15m PAT pa, a measly PER of 6-8x gives #HARL a mkt cap of £90m-£120m.

But it's as much what the prestige of the contract win brings. Many more major contract wins in the decade ahead, on now v. solid foundations.

Key risk to trade: discounted equity raise - but recent proposed debt refinancing reduces this. Moreover, any placing overhang would be eaten up rapidly.

#PREM set to become a lithium spodumene producer in Q1 at its Zulu Project in Zimbabwe. Hottest commodity in the world.

Pilot plant (construction funded) set to produce 4kt pm. At $5k/t (transactions recorded over $8.5k/t this week!) and cash costs of $1k/t, that's EBITDA of $192m on revs of $240m, annualized.

That's just the pilot plant. #PREM's current mkt cap - $150m. Why? It's PREM!

Key risk(s!) to trade: where to begin. For readers with no experience of this Co, it's historically been a serial loser. Largest near-term risk likely another equity raise, but Zulu Pilot economics (versus PREM's current val.) and global interest in spodumene projects...

...should see any raise quickly swallowed.

#ALK - building a lithium hydroxide refining facility in NE England. Tiny cap at £14m versus unrisked project NPV (fully deployed) of £2.8bn.

Had chat with mgmt this week and was v impressed.

Chair has great recent track...

...record in delivering value for #PRE shareholders.

Tightly held float, key news items over next 3-4 months (a couple, much sooner) will drive #ALK's SP.

Key risk to trade: failure to secure a lease at Wilton (success also happens to be a major positive catalyst!).

#MKA - Mine Development Agreement with Malawi Government, long overdue, now close at hand. Granting of the MDA is a huge milestone for the company (enables financing, offtakes, construction) - and thus a massive catalyst for the SP.

Fair value...

12/18… a good few multiples of #MKA's current £29m mkt cap (have a look at peer group). Also an off chance of DFS for Poland Separation Plant landing pre-Christmas - another major catalyst (although IMO it'll be Feb/Mar).

Key risk to trade: further delay by Malawi Gov.

#BSFA - unique tissue engineering technology. LT investment case is exceptionally strong and worth a deep-dive, but the rationale for this ST trade is based on Tuesday's RNS.

Being familiar with #ANIC's portfolio of investee companies in the...

...cultured meat space, I was drawn to BSFA's miniscule mkt cap versus what appears to be unique IP.

Then the news with UPSIDE and the FDA's greenlighting emerged, as ANIC itself reported.

A milestone for the industry. I expect the investment...

15/18… to begin to realize this too, and #BSFA's incredible progress to be valued more highly.

Key risk to trade: failure to produce a larger scale prototype in next 2 months.

Conversely, success would also prove a major SP catalyst.

Big seller should clear soon.

#CGO and #BOIL:


Will add to this thread, here, tomorrow.

Wishing you all a great weekend!

Finally: I rarely give my own SP targets, for several reasons.

And exits in the ST Trading PF are rarely because I think the Co has suddenly become a poor investment opp., per se - rather, because the trade has achieved my % return target.

The PF exists to generate cash.


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More from @MylesMcNulty

Sep 6
@AnEarlofWisdom Hi Earl, I can't see any of the posts, as I'm blocked by those accounts (or I've blocked!), but I've been told there's a lot of scaremongering about various things:

1) Delay in trial;
2) Dox not activating much in TME;
3) Low cash balance, and thus possible placing coming.

@AnEarlofWisdom On the contrary, except for Cohorts 1 and 2 taking longer than expected (due to patient withdrawals - nothing whatsoever to do with #AVA6000 itself), #AVCT's progress in 2022 could not be stronger.

The DE to 200mg/m2 was the ultimate target, so that nullifies point 2) ⬆️.

@AnEarlofWisdom Licensing deals for targeted oncology drugs - even those at pre-clinical stage, like 3996 - have been monstrous in recent times (e.g. $100m cash upfront for an antibody-drug conjugate, just last month ⬇️).

#AVCT has referenced...

Read 8 tweets
Aug 24
Dare I say a major #AVCT rerate is (at last!) at hand?

Genuinely company-defining news could be landing over the coming weeks.

The question that is shortly to be answered:

Is @avacta's preCISION platform working in man?

If it is, the superheavyweights of Pharma move in.

I have said all I need to, on #AVCT's preCISION platform, here ⬇️:

Since that note, a third cohort has been launched in the AVA6000 trial, with a further considerable dose increase (+33%).

My view is that they stop here. The specificity of the...

...substrate to FAP is so high that the concentration ratio of active doxorubicin in the tumour : healthy tissue, will negate the requirement for increase in dose size. [My view!]

Enough dox is already becoming active in the tumour micro-environment, at the current...

Read 8 tweets
Jul 8
Whilst many scream, "avoid loss-making growth stocks like the plague!" (e.g. #AVCT!)...

@Merck ponders a $40bn T/O of oncology-focussed biotech, @SeagenGlobal.

In 2021, Seagen made a loss of $0.67bn, on revs of $1.57bn.

'22 rev forecasts: ~$1.7bn.

$SGEN specializes in antibody-drug conjugates ('ADC') - a relatively novel form of targeted cancer treatment.

@avacta's targeted cancer treatment platform, preCISION, has the real potential of generating pro-chemotherapies that are MORE targeted than ADCs, and thus...

...also potentially capable of delivering a more potent drug payload.

#AVCT will be announcing the results of the first preCISION prodrug P1 trial (AVA6000) in the next few months.

Success will mean the platform could be used to modify many other existing chemotherapies.

Read 6 tweets
Mar 3
Two weeks from entry into @BushveldMin_Ltd, and the SP (and vanadium market!) is really heating up.

Russia accounts for almost 20% of global V production. With sanctions potentially about to bite, panic buying is evidently already occurring.

The #BMN investment case ⬇️

@BushveldMin_Ltd controls one of the largest and highest grade vanadium resource bases globally, at 549 million tonnes.

It controls:

- 3 major, high-grade deposits, one of which is a working open-pit mine;

- 2 processing plants;

- an electrolyte plant (in construction).

#BMN's operations are located on the Bushveld Complex in the North of South Africa.

Prior to 2017, the Co was a pre-revenue mineral explorer. Its flagship asset was the Mokopane vanadium deposit.

A 2016 prefeasibility study suggested a 30-year mine-life, producing...

Read 25 tweets
Feb 18
Rare earth elements continue to fly largely under the radar of the investment community.

The reason being that they're used in traction motors of EVs, and not the ever-discussed batteries.

The key REE, Neodymium, is now up 376% since 1 July '20.

Valuation check on #MKA ⬇️

@MkangoResources is due to complete its bankable feasibility studies for each of its rare earths mine in Malawi (Songwe Hill), and its separation plant in Poland, by the end of next month.

Details have been scarce, but #MKA has indicated the intended output of the...

...mine and separation plant - which is more than double that of the output suggested in the 2015 pre-feasibility study.

Presumably with a little guidance from #MKA mgmt, @MkangoResources' broker provided some very basic headline numbers of how the integrated operations...

Read 8 tweets
Feb 16
@PetraDiamondsIR #PDL is now at 96p / £186m and threatening to break out. It's in touching distance of the post-restructuring, intra-day high of 97.5p, with blue skies above.

Interim results are due out next Wednesday.

A basic summary of the investment case ⬇️

#PDL is a diamond miner, with interests in 4 mines:

3 underground mines in South Africa (all 74% owned), namely: Cullinan, Finsch, and Koffiefontein;

1 open pit mine (75% owned) in Tanzania, named Williamson.

The mines were all acquired from @DeBeers between 2007-11.

The mines had all suffered from underinvestment when owned by @DeBeers. As such, between 2006 and 2019, #PDL invested approximately $1.6bn in improving the operational efficiencies of the mines and in extending their lives.

Much of this came in the form of debt...

Read 25 tweets

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