Portfolio overview Q317

Before the half-year reports

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The next three weeks are the traditional season half-year reports for great many companies. A few companies publish their reports in July, but most do in August after the summer holidays. The majority, especially among small companies, will however show up during the last weeks of August. For companies with no turnover reports are non-event. Mostly a burn rate test. For companies with beginning sales, though, perhaps near their first profitable month or quarter, a report can turn the share price upside down.

In my latest post, I looked at the report form Recyctec, which came July 21th. It was a miss – and from a level around 1.50 SEK the share dropped to somewhere between 1.10 and 1.20 SEK – and seems to stay there. It will probably stay at that level until the company have secured enough cash to bring the company past break even.

Question marks and non-events

Despite Recyctec, I am quite optimistic about the coming reports. I put them into three categories; non-events, question marks and interesting reports.

Cantargia (23th) and A1M Pharma (25th) are non-events, as there are still no turnover. The question marks are AroCell (24th), BrainCool (10th), and CybAero (25th). For different reasons these reports are question marks.

For AroCell sales have not really begun yet, but minor orders from research institutions would be an encouraging pad on the shoulder for a share that have lost almost 30 % this year.

BrainCool have a lot going on in the field of research and documentation, but still have to show more sales before we move away from the current level around 4.85 SEK. Until the latest issue in April, the share price was around 8 SEK, so there are still a few stairs to climb before we are back at that level. The main driver, I think, will be rising sales.

Bracknor saved CybAero in the last round before bankruptcy in start-July. I doubt the report will show anything but an empty account. There might be some words, though, on how the company will move forward, which could trigger the share price in both directions. Orders will probably be the only thing that will move the share price substantially. The share is down more than 90 % the past year.

The most interesting reports

Personally, I very much look forward to the reports from Dignitana (24th), Heliospectra (25th), Fortnox (18th), and Nexam Chemical (18th).

Dignitana has showed a number of orders each month during 2017. Each order places a Dignicap system at a medical centre. From that point on, the systems will generate turnover Dignitanafrom both the centre and from the individual users who pay per treatment. In the last press release from Friday (August 4th), the number of cancer centres are 87 in 21 states. At the end of Q1, the number was 67 in 19 states.

From Q4-16 to Q1-17, the turnover went up 50%, and I expect a growth at the level in Q2. Loss after Q1 was 8.1 MSEK and it is worth noticing the level of loss, as the company have announced that it expects to be profitable from start 2018. Despite the inflow of orders share price are still 20 % down this year.

Another interesting report will come from Heliospectra. The Q1-report was a disappointment as turnover fell compared to Q1 2016. On the other hand, orders came in regularly and in numbers and the announced order amount significantly exceed the turnover in Q1. This will probably show as rising turnover in the upcoming report.

After change of CEO in January, Heliospectra have changed focus from the cannabis industry to food industry. Since the last report, repeated orders have turned up from the food industry and the strategy seems to work. Since April 1th, the company has announced orders for 9.25 MSEK. During Q1, announced orders were 6.5 MSEK. The already announced orders of almost 16 MSEK makes me believe that we will soon see an order sum above the turnover of 23 MSEK in 2016. The past week the share is up 37 % after a row of orders, but is still down 33 % this year.

Fortnox, I think, will deliver a strong report again. The company had a higher than expected inflow of costumers in Q1 and their ongoing purchase of services and monthly payments should add to growth. Furthermore, the company are raising margins as heavy investments in Nox Finance began to pay off during the first quarter. This development will probably continue in the second quarter. It is a riddle why the share price has not changed since the Q1 report. The share is up 16 % this year, though.

I do not know what to expect from Nexam this quarter. The company do not announce orders and since the Q1 report, there has been almost complete silence from the company. On the Nexamother hand, Nexam signed yet another supply agreement in Q1, and this could probably add to turnover. These supply agreements run month after month and secures ongoing turnover. It is hard to estimate the amounts, but probably they will rise as Nexams costumers gain foothold the market with their new products. Turnover in Q1 was 2.3 MSEK and loss were 4.9 MSEK.

At the presentation after Q1, the CEO said that the company was ‘intensive phase right now’ regarding a possible acquisition. Nexam made a huge issue more than a year ago (March 2016) to finance this. So far, nothing has happened. The share is down 23 % this year.

The weeks to come

August is the most volatile month on the share market. So far is has been true, as most of the companies in the portfolio has risen quite well. I hope that this will continue when the reports come out. Next week it is BrainCool. The week after Nexam and Fortnox, and one week later, the great report week with reports from Cantargia, AroCell, Dignitana, A1M Pharma, Heliospectra, and CybAero.

Check out my growth share portfolio, the share price trigger list or my EGS (Evaluation of Growth Shares) Model.

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