Big deals struck for Kanabo and Surface Transforms… and a stern warning for subscribers
19th August 2021 |
Before we get into today’s update, there’s something very important we need to talk about.
It’s about leaking our reports into public forums.
Now I will preface all this with almost all of the time we know you act responsibly and with great respect for our work. For that, we thank you.
However, sometimes a rogue subscriber will take our work and reproduce it in a public forum.
We saw this last week when our most recent report on Saietta Group (LSE:SED) was leaked into the ADVFN share chat forum for Saietta. The subscriber who did this used the handle on ADVFN, “grahamstown”.
Let us be very clear – this is a significant breach of copyright and goes against our terms & conditions of being a subscriber. Do not republish our work in public forums.
Not only that, but it’s also a massive slap in the face to us, showing the highest disrespect for the work we do. Also, and perhaps even worse, it shows utter disregard and disrespect for fellow subscribers.
What’s even more infuriating is the post has yet to be removed.
We’ve written to ADVFN to have the post moderated and removed, as yet to no avail. If “grahamstown” is reading this, please remove the post. And at least have the decency to let us know who you are.
Releasing our work to non-subscribers is unacceptable.
We’re not naïve that people share our work with friends and family sometimes, but we would assume it’s kept private. But to see it so fragrantly republished in a public stock chat forum (and still not removed after a number of subscribers voiced their disapproval) is extremely disappointing.
We hope to not see it again. We hope to never have to write a reminder not to do it again.
And as we say, if “grahamstown” has any decency, they’ll let us know who they are, remove the post and we can then figure out what to do from there.
We hate having to write this stuff – as we say, almost all of the time we never have to deal with situations like this. Let’s hope to not see it again.
Now on to the more promising, exciting parts of this week’s update…
Rolls-Royce on the comeback trail
Whilst Meggitt has been stealing the limelight in the UK engineering industry recently, another UK engineering giant has been quietly going about its business – and to great effect.
Step forward, Rolls-Royce Holdings (LSE: RR).
Rolls-Royce is a supplier of engines and components to the airline and energy industries.
Following a difficult lockdown period, exacerbated by the absence of international air travel, Rolls-Royce is showing strong signs of recovery.
After reaching a yearly low of 87.48GBp on 20 July 2021, the company’s share price is now trading at around 110GBp – a rise of around 25%.
On 3 August 2021, the company announced that German airline Condor Flugdienst GmbH has upgraded 16 of its Airbus A330neo aircraft with Rolls-Royce’s Trent 7000 engines.
The Trent 700 is one of seven specifications of the Rolls-Royce’s flagship Trent engine collection.
The engines are designed to produce maximum sustainability and efficiency.
In this instance, the Trent 7000 will produce a 14% fuel burn improvement per seat compared to Condor’s previous plane engines.
Condor will use the Airbus aircraft on long-haul flights to the Americas, Africa and the Caribbean from Autumn 2022.
Jacqui Sutton, chief customer officer at Rolls-Royce Civil Aerospace, noted:
“We are delighted that Condor has chosen the A330neo, powered by Trent 7000 engines, as it modernises its long-haul fleet.
“The Trent 7000 will support the airline’s ambitions to deliver greater efficiency and reliability as it moves towards its sustainability targets.”
This deal is another example of how the airline industry is adapting to the demands of greener economies.
With Rolls-Royce’s proven track record of sustainability and efficiency, we believe it is well placed to play a key role in this transition.
Collectively, the future is looking brighter for Rolls-Royce.
We think that Rolls-Royce is still heavily undervalued following the battering its stock price has taken over the course of the pandemic.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
Buy list update
Immotion Group (LSE: IMMO)
Immotion Group is a provider of virtual reality technology to tourist attractions.
After a difficult lockdown period, it is once again enjoying the footfall across locations in which its installations are housed.
On 3 August 2021, Immotion announced that it will be installing a brand new 16-seat theatre style attraction at SEA LIFE in Florida, USA.
It will be set up “over the coming weeks” for an initial three-year period.
It adds to Immotion’s installations in the US, following installations at Shark Reef Aquarium, Las Vegas, and Clearwater Marine Aquarium, Florida.
Speaking of the Clearwater Aquarium, Immotion has also announced an extension to the agreement of its 22-seater installation here. The initial agreement was for one year, but this has now been doubled to two years.
Rod Finley, commercial director of Immotion Group, noted:
“The overall performance of our Location-Based Entertainment business continues to be very strong, driven by our new larger style formats. The new installation at SEA LIFE Orlando, as well as the contract extension from Clearwater Aquarium is the latest step on this new area of focus as we look to accelerate growth.”
To us, the SEA LIFE deal is another feather in the cap of Immotion. SEA LIFE is one of the world’s renowned tourist hotspots, and attracts millions of visitors each year.
In this, Immotion’s installation will gain publicity, and exposure to SEA LIFE’s huge customer base.
We think Immotion has the potential to generate further worldwide interest from tourist attractions, as they return to something like normality following the disruption caused by the pandemic.
We reiterate our HOLD recommendation on the stock. You can find the original recommendation here.
Surface Transforms (LSE: SCE)
Surface Transforms is a manufacturer of carbon fibre ceramic brake discs.
On 17 August 2021, the company announced it had been chosen as a tier one (direct) supplier of its ceramic brake discs to a “major, mainstream US automotive company”.
Surface Transforms is replacing the company’s original supplier, and will fit its brakes to combustion engine cars.
The contract is due to begin in mid-2024, and will earn Surface Transforms £20 million in total revenue.
Kevin Johnson, CEO of Surface Transforms, noted:
“This is a very significant win for Surface Transforms. The customer is one of the most respected names in the industry and provides a further key reference point for other OEMs… We look forward to further extending our relationship with this new customer.
“Moreover, it is particularly encouraging to note that this award primarily reflects the advanced technical capabilities of our product and provides further validation of our 15 years of technical development.”
This deal confirms the commercialisation of Surface Transforms’ brake discs.
The fact it is attracting the attention of one of the US’ biggest automotive companies highlights the expert braking experience that the discs provide.
Their durability, and the ability to provide weight savings of up to 70% gives automotive companies extra efficiency in what is fast becoming a greener and more sustainable industry.
We reiterate our BUY recommendation on the stock. You can find the original recommendation here.
Kanabo (LSE: KNB)
Kanabo’s share price has jumped in recent weeks, following the announcement of a non-binding merger agreement with Materia.
Materia is a Maltese-based processor and distributor of medicinal cannabis products.
The market has, once again, reacted positively to Kanabo following Materia’s latest news announcement.
On 17 August 2021, Materia’s subsidiary, Materia Deutschland GmbH, announced an agreement with German manufacturer Eurox Pharma, to distribute medicinal cannabis extracts.
The deal will allow Materia to expand its distribution network across Germany, giving it access to new pharmacies and end customers.
A potential merger with Materia would give Kanabo direct access to what is Europe’s largest CBD market. By 2025, it is expected to be valued at €3.2 billion by 2025.
With this in mind, we remain very excited about Kanabo’s upside potential and the market agreed seeing Kanabo’s stock price leap higher again on the announcement.
Right now, with regard to the merger, there is no action for you to take. As ever, we will keep you posted on how it unfolds, with any relevant action to take.
We reiterate our BUY recommendation. You can find the original recommendation here.
The Frontier Tech Investor “Top Three”
Sometimes it’s hard to decide on which stocks to invest in from our buy list.
Below is our Frontier Tech Investor “Top Three” section showing three stocks in open BUY positions. If you’re trying to figure out what to invest in next, these are three that we think are a great place to start.
This doesn’t mean our other stocks are no good: this is just a tool to help you spot the next Frontier Tech Investor stock that could be worthy of your consideration.
Mode Global Holdings (LSE: MODE) – Mode looks to revolutionise the way in which payments are being conducted. Its platform provides a seamless way to manage, and spend assets from both monetary systems; the old, fiat currency system, and the new, crypto and digital assets system. The platform has unique features, such as the potential for you to earn interest on your bitcoin holdings. We see the popularity of Mode rising in line with the wider adoption of cryptocurrencies as a means of payment.. You can find the original recommendation here.
Equals Group (LSE: EQLS) – Equals is a one-of-a-kind international payment ecosystem that removes the barriers to cross-border payments. It provides a number of consumer and business-facing products that allows payments to be settled efficiently, in a variety of currencies. Whilst the platform is built upon the principles of the old, fiat currency system, it has shown its desire to integrate into the new (crypto) money system by introducing crypto liquidity to its payment services. Collectively, this makes it an unusual payment platform that provides the best of both money systems. You can find the original recommendation here.
Surface Transforms (LSE: SCE) – this is car braking technology like you have never seen before. The carbon ceramic brake discs from Surface Transforms are a hallmark of efficiency, providing up to 70% in weight savings. Surface Transforms is the UK’s only manufacturer of carbon ceramic brake discs for automotive use, meaning it has something of a niche market all to itself. The durability and smoothness of the brakes enhances the driving experience for all. You can find the original recommendation above.
Sam Volkering
Editor, Frontier Tech Investor
Elliott Playle
Junior Analyst, Frontier Tech Investor
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