Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Allied Minds: Portfolio Rebased For Growth

By Edison Stock MarketsFeb 26, 2019 07:51AM ET
www.investing.com/analysis/allied-minds-portfolio-rebased-for-growth-200392460
Allied Minds: Portfolio Rebased For Growth
By Edison   |  Feb 26, 2019 07:51AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Allied Mind (LON:ALML)’s portfolio has been significantly rationalised since 2017, with the portfolio now focused on six principal companies. Management expects the top three companies to achieve commercialisation in 2019, and we believe there could be substantial upside if this is achieved. The shares trade at 0.41x H118 NAV (adjusted for latest net cash). Allied Minds’ enterprise value (market capitalisation less parent cash) trades at a 45% discount to our valuation for the top four portfolio companies, each of which has been validated by external fund-raisings. Following recent cash management measures, management believes that Allied Minds’ cash runway has been extended into 2021.

Portfolio Rebased For Growth
Portfolio Rebased For Growth

Strategic investors underline value

After the rationalisation of the portfolio in 2017, the six principal companies, in the space, connectivity/5G and medical devices sectors, comprise 92%+ of portfolio fair value. Allied Minds’ EV trades at a 45% discount to our valuation for the top four portfolio companies, each of which has been validated by external fund-raisings. Funding rounds have been led by major independent strategic investors, at Spin Memory (Arm, Applied Materials (NASDAQ:AMAT)), HawkEye 360 (Raytheon (NYSE:RTN)), BridgeSat (Boeing (NYSE:BA)) and Federated Wireless (Charter, Arris, American Tower (NYSE:AMT)). However, despite recent bridging rounds, third-party validation is still pending for two of the six principal portfolio companies, Precision Biopsy and SciFluor.

Targeting premium exit valuations

Ultimately, Allied Minds’ value will be determined by a small number of premium exits. CEO Jill Smith is focused on driving commercialisation at the top businesses and investing selectively in the pipeline. The group’s priorities include attracting strategic investors, strengthening leadership and governance across the portfolio, while focusing on thematic investing. Subsidiary management teams have been strengthened and are aligned and accountable for achieving clear milestones. Management estimates end-FY18 parent cash to have been $50m which, following cost management measures, it deems sufficient to fund the businesses into 2021.

Valuation: 59% discount to NAV unwarranted

Allied Minds’ share price has fallen by 72% since its portfolio write-down announced on 5 April 2017. The company’s shares now trade at 0.41x H118 NAV even though c 64% of H118 NAV is either in cash or has been validated by strategic co-investors. Our bottom-up analysis of the six core assets suggests meaningful upside potential once key milestones are achieved (particularly at Federated Wireless, Spin Memory and HawkEye 360). This level of discount to NAV appears unjustified. However, we note that Allied Minds has yet to exit any investments.

Investment Companies
Investment Companies

Share Price Performance
Share Price Performance

Business description

Allied Minds is an IP commercialisation company focusing on early-stage companies within life sciences and technology. Its portfolio companies are spin-outs from US federal government laboratories and universities. The top six holdings comprise 92%+ of portfolio fair value.

To read the entire report Please click on the pdf File Below..

Allied Minds: Portfolio Rebased For Growth
 

Related Articles

Michael Kramer
NASDAQ Could Fall Another 13% By Michael Kramer - Jan 28, 2022 61

This article was written exclusively for Investing.comThe NASDAQ Composite has fallen sharply to start 2022, down nearly 13%. But don't expect the index to race back to record...

Allied Minds: Portfolio Rebased For Growth

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email