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Technology winners with a huge ‘margin’ of safety

Two technology companies are trading on massive share price discounts to net asset value even though the directors are looking to realise significant shareholder value
Technology winners with a huge ‘margin’ of safety

■ Federal Wireless expands ecosystem through AWS and Microsoft marketplaces

■ Spin Memory achieves milestones in its partnerships with Arm and Applied Materials

Interim results from Allied Minds (ALM:38.5p), a Boston-based intellectual property (IP) commercialisation company focused on investing in early-stage companies with disruptive technologies, highlight just why I suggested buying the shares, at 38.5p (‘Exploit Allied Minds’ huge margin of safety’, 30 July 2020).

The company is a classic Ben Graham recovery play, having fallen out of favour under previous management, but is now in the hands of a new board who are mandated to monetise the portfolio and return cash to shareholders. It has some exciting investments that have attracted the interest of heavyweight technology investors in recent funding rounds, too. However, this is not being priced in as $214m (68p a share) of investments held in six unlisted technology companies, and a further $29.2m (9.3p) of cash (adjusted for post period end follow-on investments), are worth double the current share price.

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