PHE: the Underdog that Investors are Overlooking

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I hereby declare that I am not invested in (LSE:PHE) nor do I intend to be within 48hours of this article being published.

Right folks, you know the drill. We must always start at the beginning so here we gooooooo!! ha ha

Lets go right back to the 4/10/2011

PHE has a 30% holding in Pyromex.

Pyromex declare that they have received the first payment under a sales contract with an Italian company and is now in the process of producing  the first commercial Pyromex Ultra High Temperature Gasification Reactor (UHGT) a unit that produces energy from waste.

At this point everything is looking very good for PHE, they even had the option to buy the remaining 70% interest in Pyromex!!!

In January 2012 they declared their interest in doing just that. But they made a huge mistake, the lack of business sense from the upper management was about to bring PHE to their knees.

In February the company declared a restructure in US operations which resulted in a operations cost reduction of US $1.5 million per year but behind the saving was a motive that the shareholders could never have guessed at.

The 12/4/12 started the most horrific experience the shareholders of PHE will likely ever encounter, suspension followed by financial difficulty declarations and even a legal proceeding for damages was the curse the shareholders had to  deal with over the 12/4/12-22/5/12 period. Complete closure was certainly on the cards.

Still in suspension PHE declared on the 19/6/12 that a loan agreement with Hill Grove Investments Pty Limited had been reached (little did PHE know the significance of getting their backing) but with such a catastrophic position to grow from the future of PHE was still very much unsure.

On the 10/10/12 PHE started trading on AIM again.

On the 9/8/13 PHE made good their original plans to acquire the remaining 70% stake in Pyromex but shareholders had been burnt badly and sentiment was still very much poor.

In February Hillgrove declared their ongoing support of PHE and just three months later PHE declared an exclusive one year vendor agreement with Waste2Tricity in Thailand making its move on the Large ASEAN market.

At the end of 2014 requests for on-site testing with particular interest coming from Australia start to flood in. The G3-Uht at this point seems like it could just about turn the company into something much bigger.

Lets come back to the present day and what the prospects are for potential investors.

Now financially secure and with a far more competent management team PHE has come a very long way from the no hope shell it once was. It has a great product which has the potential to make the company tens of millions a year very soon and is environmentally friendly for those investors with a environmental conscience ;-) ha ha.

The GH3-UHt system which is the key to PHE succeeding in Australia  is due to be declared as completed within 19 days from today (today’s date 29/5/15).

The potential for PHE to become a big clean energy player is very much evident and on the card at this point.

PHE is currently being traded at 1.50pps bid  – 1.80pps ask  with an Mcap of just 6.41million.

Now I know that this is a huge spread but I called this gem at 1.1pps as a strong buy and I remain confident that PHE has substantially more upside to come.

I will put my neck on the line and say that 4-5pps is very much a possibility within the next 12 months.

I don’t usually give opinions on such small companies but this is a real opportunity to buy into a highly undervalued company with very limited risk at these levels.

I hope you enjoyed this piece and as always,

All in my opinion and not to be taken as fact nor advice.

Always seek professional advice before investing.

@AKW_AIM Twitter

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