You could be forgiven if you haven't heard of Iofina (AIM: IOF), as it has been keeping it's head down - building its business of iodine and natural gas production. It closed today at 31.75p, giving a MCAP of £35.6m.
Please invest 5 minutes to look at this video and let me know what you think of the prospects for Iofina.
If you missed the link, within my videocast, to the presentation (produced by Noble Investments) - made by Iofina's CEO (Lance Baller), you can use this link. You will need 30minutes to watch the complete presentation but it is very worthwhile if you are considering investing in this Company.
Usual warnings ... DYOR etc.
Friday 20 May 2011
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Iofina has already had two share placements with the prices falling subsequently. The story with the extraction of iodine from oil well water is interesting. But......
ReplyDeleteIs the company undervalued? I have not seen any financial projections.
The CEO's presentation was educational, but did not make any financial or valuation arguments for investing in the company.
What is the company going to be earning on average thru an industry cycle????
Hi Carolyn and welcome to DIY-Investors,
ReplyDeleteThe Iofina CEO is unable to give too much away during the close period (results due 30th June 2011), so I've been digging around to suss out the Company as best I can.
Having looked through the various RNS releases and read the 2009 accounts, it appears that IFO took a while to get going (after flotation in May 2008) and in the process changed CEO (March 2010). Lance Baller was Finance Director, before taking over as CEO and the board has since been strengthened considerably.
I've noticed over the years that many IPO's go this way (i.e. share price drop) and for us DIY-Investors, this provides a lot of opportunities. I included thus aspect in my book "Picking Winning Shares" and in the case studies (chapter 16), Entertainment One (ETO) was one such example. Incidentally ETO's results are out today - outstanding progress!
If you are interested in reading the case study on ETO, you can register and download (free) the case studies on teh diy-investors.com website. They come as daily e-mails (I can't remember in what order ETO is sent out).
Coming back to Iofina, the demand for iodine is increasing due to its use in LCD manufacture (mobile phones, touch screens, LCD monitors & TV's etc) plus there are many other uses - see the Iofina website for the full list.
Another factor is the Fukushima nuclear disaster affecting Japanese production of iodine, as well as increasing the local need for iodine tablets (against radiation sickness.
Iodine also has an important part to play in agriculture & horticulture.
Regarding the cleaning up of water used in "fraccing" during gas production, I understand that this could mean that IOF could sell its waste water back to gas producers, who have difficulty getting water extraction licences due to competing agricultural needs.
The annual results (30th June) should make interesting reading!
I also look at the TA and I believe this strengthens the fundamental case (increasing OBV and the ADX buy signal in March 2011 + breaking up through the 200 day moving average & staying above the support line [previous resistance line]).
As ever DYOR and let me know if you manage to turn up anything new on Iofina. I've taken a small position and am watching this one with interest!
Thanks for your contribution - I look forward to hearing more from you.
Kind Regards, Mick.
Hi Mick,
ReplyDeleteJust came across your short video on Youtube re Iofina. Are you still an investor here? The story interests me, especially with the recent rise without any news. The last update said cash flow positive since April which hopefully will make good reading in the 2011 results due next month. I know Ambrian were expecting profits of 2.15M this year with that doubling next year.
Several new revenue streams identified with the water as mentioned above being highly profitable for Iofina, especially with the surge in fraccing across the US. That coupled with the mcuh increased Iodine price and a 85% supply against the worlds demand, this is a company that interests me greatly.