3rd Apr: Trader Tim’s Penny Stock Post – #IDP #BOOM #SIS

@TraderTim5BOOM, IDP, SIS0 Comments

Trader Tim’s Penny Stock Post analyses key RNS releases every morning. Not all releases can be covered, priority will be based on liquidity, significance and demand. To receive Trader Tim’s Penny Stock Post direct to your email box at 10am each morning, click here.

Morning all!

Apologies for the radio silence over that last month or so, my time has been taken up with finding a new job. Anyway, I am back now. Posts may still be somewhat intermittent, but I hope to get back close to normal service.

It’s been a busy time on the markets. We’ve seen one-time tech hero CloudTag booted off AIM. I’ve done a fair bit of buying and selling myself, which I’ll update in my trading diary. The iWeb (my broker) website is being ridiculously slow this morning. I can’t even log in at the moment. I tried to send through updates of my trading activity on Twitter to keep followers in the loop.

I sold Thor Mining. I still think this has some upside, but it was a volatile stock and given that I didn’t have much time to monitor the situation, I thought it best to bank some profit. I sold Audioboom for a small loss. The recent placing of £4 million was enough to suggest to me that cash burn is still an issue here. The other key metrics – file requests, users and revenue – all are moving in the right direction, but while cash burn is an issue I can’t see the share price shifting. I know the company is working on reducing expenditure, so maybe it’ll be another 12 months or so before this comes through on the balance sheet. That said, this may all be speculation on my part as the company hasn’t released results yet. Audioboom indicated that accounts were with the auditors and results would be announced early March, yet it’s early April and still no sign. That’s not the most reassuring sign either.

Elsewhere, I sold Pan African, which really didn’t move much so I got rid of it. I bought some EVRH after the announcement that the virtual reality company had secured an agreement with Universal Music Group. Also, I picked up some shares in Science in Sport, which is a sports nutrition company. They are yet to make a profit, but have huge growth potential I believe. They have agreements with Liverpool, Team Sky and USA Cycling, they’re rapidly expanding their geographic footprint and are seeing strong sales growth.

Anyway, just covering the one stock today to ease me back into it.


InnovaDerma

Market Cap: £15.5m
Price: 166.5p
Spread: 4%

The beauty and personal care product developer delivers a trading update to the market today. The shares are up 25% at the time of writing, so obviously has been positively received. This is a quite a popular company among private investors, which has been quite volatile since listing back in August. It listed at about 40p and has since achieved highs of 380p. It sharply fell back, but has bounced around a fair bit since then.

The company is probably best known for their beauty product skinny tan, a natural tanning product which aims reduce the visible appearance of cellulite. This has been successful and InnovaDerma have managed to get the product into a number of UK retail chains including Superdrug. With this success, they are now pushing the product in the US and Australia as well as exploring other product opportunities.

The AIM company has had strong quarter.

Trading in Q3 has been very robust with January and March achieving the highest-ever monthly revenues and subsequently delivering the highest ever quarterly revenues

The AIM company cites their Direct to Consumer channels, which have “performing exceptionally well”, as being one of the major catalysts for growth. This is an important strategy. With the ongoing struggles of the High street retailers, product suppliers can not become complacent with their commercial strategy. A Direct to Consumer strategy, gives the product provider more control. Not to mention, better earnings visibility and, if the strategy is successful, greater growth potential. The AIM stock has also onboard e-tailers Feel Unique and lookfantastic.com – both have credible customer bases in Europe.

InnovaDerma indicate that performance in North America is “as expected” with strong contributions from Direct to Consumer channels. The Skinny Tan product was the “No.1 selling brand in Superdrug by revenue in its category for 2017” despite only securing additional shelf-space in February. It’s an interesting time for InnovaDerma. The company have some impressive numbers and have seen strong growth since their listing last year even if it has been a volatile journey. There is plenty of opportunity for further growth here, but volatility might scare some.

As we build a sizeable stable of premium and highly differentiated brands with international appeal, we are being sought after by market leading e-tailers and distributors which provides us with significant opportunities to expand further our geographical reach and customer base.

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If there are companies that you want me to cover in the coming days or have significant news due imminently then let me know. My aim is to deliver value to readers, so I want to ensure I’m doing this as much as I can.

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