OMG! Tuesday 27 July: Summary of last week’s newsletter

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The OMG newsletter recommends at least 15 companies each month, using the writers’ experience of small caps to give you a winning edge. Last week they wrote about 7Digital and Filtronic. Read about these Opportunities 4 Material Gains!

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Mid-week Tip Wednesday 20th July 

The potential for its streaming technology is enormous, but 7Digital (LON: 7DIG) has found it difficult to turn the promise into profit. Costs are finally being brought into line with revenues, having been raised in anticipation of much faster growth. Last year, overheads were cut by 43%. Licensing already accounts for more than 50% of revenues. The scalability of the technology platform and the operational gearing of the business means that once 7Digital passes breakeven the profit will rise rapidly. A small loss is expected for this year before 7Digital moves into profit in 2022. An underlying pre-tax £2.6m profit is forecast for next year, rising to £4.7m the following year. This profit is expected to turn into cash.  Worth Buying

 

Results Preview 11th July

Filtronic (AIM: FTC) 11p We have been reporting its transformation progress with new product, contacts, CEO and the interims to November. Where the like-for-like revenue was 5% lower at £7.1m with an operating profit of £0.1m compared to a £0.5m loss. The Trading Report ahead of these finals to May which are to be Reported on Tuesday 2nd of August, which gratifyingly suggest improved margins although revenue may remain slightly lower at around £15.6m its the EBITDA margin could lead ahead. Due to a favourable mix of business an 11.5% improvement to around £1.8m against 2020’s 7% and £1.2m.  The second half seems to have benefited from a post Covid demand recovery for critical communication products, catching-up on new installations and system upgrades.

 

Reviews from 18th July 

KMK – 17. 5p – Sniffing Success

SNX – 127.5p – We Spy a rerating

SRC – 95p – Reverse takeover

EAAS – 21p – Momentum accelerates

IOF – 13.5p – Iodine price recovers 

IUG – 14.75p – AI yet to contribute significantly

LUCE – 393p – Strong second half in prospect

MNO – 11.5p – Revenues nearly doubled

ALU – 276p – Better than expected

SOLI – 940p – Improving margins

JSG – 160.4p – Demand recovers

FDBK – 0.8p – Bleepa for vets

 

Finally

The last Covid lock-down scares may now be in the past but there are however plenty of Covid related festering wounds still affecting markets.

 

OMG!  Opportunity for Massive Gains is a Premium Newsletter on ADVFN with two reports each week written by experienced small cap specialists. To get trips like this every week, sign up here.  

 

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