Thread by @MylesMcNulty

Trading PF update:

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

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

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

[Entries/exits in timeline]

1/18

https://twitter.com/MylesMcNulty/status/1592101365299429377

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..

2/18

...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...

3/18

...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!).

4/18

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.

5/18

£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.

6/18

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.

7/18

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!

8/18

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...

9/18

...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...

10/18

...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!).

11/18

#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

times.mw/mining-firm-up…

...is 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.

13/18

#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...

14/18

voxmarkets.co.uk/rns/announceme…

...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

voxmarkets.co.uk/rns/announceme…

...community 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.

16/18

#CGO and #BOIL:

I'M TIRED AND THIRSTY SO TAKING MY DAUGHTER (of 11 weeks) TO THE PUB RIGHT NOW 🍻🍻

Will add to this thread, here, tomorrow.

Wishing you all a great weekend!

17/18

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.

18/18