By Tom Winnifrith & Steve Moore | Saturday 13 May 2017
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from ShareProphets). I have no business relationship with any company whose stock is mentioned in this article.
We are now way ahead on this share tip which was at a 6.75p offer. The shares are now 15.25p-16p on the back of a very bullish trading statement. But before you think about taking profits on Symphony Environmental (SYM) remember that the market cap is still just £23.6 million.
The statement starts off with; "The Board is pleased to report that the business continues to trade and grow in line with expectations." It then flags up the key milestones of the past few months, notably the regulatory news from Saudi Arabia stating "as a result of this initiative within Saudi Arabia, we have started to receive new orders through our regional distribution network, and a marked growth in activity has been reported. The Company is monitoring orders placed and activity generally, and once a higher level of revenue is proven to be sustained, will update the market as appropriate."
The launch of two important d2p products so far in 2017, for antimicrobial household gloves in Wilkinson Stores in the UK, and antimicrobial plastic pipes with Dadex Eternit Ltd in Pakistan, show important technical and commercial progress.
The company says that it has also established a new distribution channel for its d2p-treated household gloves in Italy; the first order having recently been placed. But it is too early to gauge the financial impact of these product launches.
Critically it adds that the business continues to operate on an efficient cost base, and works comfortably within its working capital facilities. Any reasonable increase in business can be accommodated within these facilities.
In other words there seems no risk of a placing and there seems every chance of upgrades to sales forecasts. With high operational gearing, there is no reason to believe that Symphony is not on a one or two year out PE well into single figures. For what is clearly - at last - a growth stock that seems harsh. So keep holding, we see this stock getting into the 20s in a pretty short order.
This article first appeared on the Nifty Fifty website which Tom Winnifrith runs with Steve Moore & Lucian Miers. To access the website ahead of the next share tips from Tom & Steve and a new shorting piece from Lucian JUST OUT click HERE
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