Hidden gems in investor presentations

One of Australia’s independent financial news sites, the Financial Information Network (FNN) partners regularly with an asset manager Shaw and its partners to sponsor investor presentation events.

The events, now live due to COVID 19, allow CEOs of emerging companies to present their cases to interested investors. Participants also have the opportunity to interview business leaders.

The full text of each presentation is available online on the FNN website for interested investors to research potential investments. Although well-known ASX stocks sometimes do presentations, the most typical participants are companies in the early stages of their development that take the opportunity to present their investment case. They have stories to tell, some more compelling than others.

Companies whose stories center on innovative approaches to the way traditional business is conducted in the industries in which they operate are often the most attractive to risk-tolerant investors. Few of these companies generate substantial income and even fewer have achieved profitability.

The following price movement chart on the ASX website tracks the year-over-year stock price movement of four interesting companies during the November investor presentation events at FNN. These are the companies:

  • Knosys Limited (KNO) Software
  • Etherstack PLC (ESK) Software
  • BARD1 Life Sciences Limited (BD1) Health care
  • Carbonxt Group Limited (CG1) Materials
  • Lithium galien (GLN) Resources

And here is their course movement from one year to the next.

Investors who have the patience to endure the slump resulting from falling lithium prices have been rewarded as lithium stocks have returned to their previous form. The oversupply of lithium drove prices down and investors fled. Developments in the future of electric vehicles (EVs), most of which come from Tesla, the world’s largest electric vehicle maker, have propelled lithium stocks to the forefront of investor interest. All of the world’s major automakers are stepping up production of electric vehicle models. A recently passed infrastructure bill in the United States, the world’s largest market, includes major investments in charging stations across the country.

Galan brings the promise of an improved process for extracting lithium from brines. Lithium is found in hard rock deposits, with Australia holding the largest hard rock deposits in the world at the Greenbush mine in Western Australia. Australia ranks second in the world for lithium reserves, behind Chile. On Statista (a business data research firm) website:

South American countries like Chile, Argentina and Bolivia extract lithium from the region’s vast salt marshes.

Galan has several lithium brine projects in the Argentinian basin from Hombre Muerto to Humberto Muerto West and Candelas. The company also has a license application for a project near the Greenbushes mine. In January 2021Galan acquired an 80% stake in the Greenbushes South lithium project from Lithium Australia (LIT).

Galan is at the forefront of the use of high-tech exploration and production methods. In Greenbush, the company recently completed a Deep Ground Penetrating Radar (DGPR) study to identify high potential targets. Galan plans soil sampling and drilling at identified locations.

The company is also experimenting with different chemical compounds to extract lithium from brine in order to optimize both the design of the extraction ponds and the associated lithium carbonate processing plants. Galan is after mining and processing techniques that will produce high purity lithium carbonate at lower cost.

The share price rose for most of the year following a series of positive announcements. In mid-July, the share price reached what was then an all-time high following news of the company’s successful testing of the extraction process with purity levels of 99.88%, above the minimum level of 99.5%. Additionally, the consulting firm that conducted the test felt there was room for improvement.

The stock price fell as investors learned Galan planned a $ 50 million equity placement to fund exploration and drilling progress as well as the finalization of feasibility studies at Humberto Muerto West and Candelas.

Galan has a market cap of $ 443 million and last traded at $ 1.53 per share.

Etherstack claims to be the “world’s leading licensor of wireless technologies for the public safety and mission critical radio industries”.

The company’s clients cover a variety of industries, from defense to resources to public safety. Etherstack technologies are used to encrypt critical communications on ‘push to talk’ radio systems, using ‘stack software’, as well as in other applications

Located in the UK, Etherstack has a subsidiary in Australia, Auria Wireless, which uses Etherstack technology to manufacture complete digital radio network systems.

Over the past year, the company has won several products. The Australian government signed a $ 4.1 million deal to receive Etherstack technology and associated delivery systems, with potential for additional activity pending the achievement of performance-based goals.

Additional contracts signed between late 2020 and 2021 to date include RCS Communications for a major iron ore producer in Western Australia (the second contract with this customer); an AUD 500,000 subcontract with Electro Optics Systems (EOS) to provide procurement services to the Australian Ministry of Defense; an A $ 11.6 million agreement with Samsung of Korea for networking elements; and the Etherstack The US subsidiary has signed a $ 420,000 contract with US communications conglomerate AT&T for software licenses and the equipment and services needed to integrate the equipment.

Additional contracts have been signed with the UK Ministry of Defense and the Australian Home Office.

On November 23, the company released new guidance for fiscal 2020, raising both revenue and profit expectations. Etherstack has a market cap of $ 67 million and last traded at $ 0.51 per share.

Bard Life Sciences develops tests for the diagnosis of a variety of cancers, including cancer of the ovary, breast, lung, prostate, bladder and pancreas. The company focuses on non-invasive diagnostic methods for the early detection of cancers. Many diagnostic measures currently in use can only detect cancers at later stages.

The company has implemented two diagnostic products: the hTERT test to complement cytological testing for bladder cancers and the EXO-NET® pan-exosome capture tool for research purposes. Bard The cancer diagnostics pipeline includes tests under development for ovarian and breast cancers, and research phase projects for prostate and pancreatic cancers.

The share price exploded higher after the publication of conclusive test results on a Bard compound for the early diagnosis of ovarian cancer. The share price rose again in March when a collaborative research study with Minomic International found that EXO-NET® was successful in isolating exosomes in a Minomic pancreatic cancer treatment study, before come back to Earth.

In August, the company announced successful “proof of concept” results for a treatment for ovarian cancer – ELISA (enzyme immunoassay). A proof of concept (POC) test demonstrates the potential viability of the concept or idea.

On November 11, the company obtained a US patent for its BARD1 autoantibody treatment for the diagnosis of lung cancer. Bard Life Sciences has a market cap of $ 96 million and last traded at $ 1.04 per share.

Of all the companies present, Carbonxt operates in an area that could catch fire – reducing environmental pollutants.

The world appears to be coming together in joint efforts to reduce emissions of carbon and other pollutants, with coal being one of the main sources of carbon and other emissions. Companies have been working on “clean” coal for decades. There are carbon capture and sequestration (CCS) methods, but none have yet had a large-scale impact.

Carbonxt manufactures powders and tablets of activated carbon (AC) for the elimination of pollutants generated by industrial processes. The company’s primary market is the United States, and its customers include coal-fired power plants, cement plants, and other applications with polluting by-products. The company has been successful in reducing mercury and sulfur emissions from coal-fired power plants and has focused on pollutant sources in wastewater treatment, drinking water and phosphate removal.

The company has manufacturing facilities in the US states of Minnesota, Georgia and Ohio. On February 2, the company announced an agreement with a US coal producer, Kentucky Coal Processing, to produce high volume pellets by opening a new manufacturing facility for Carbonxt. The new plant will be financed by an investment group at no cost to Carbonxt and is expected to be completed in the second quarter of fiscal 2022. Carbonxt has a market cap of $ 51 million and last traded at $ 0.30 per share.

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