Iām a relatively new and inexperienced investor, who owns shares in a few big companies, but one smaller company that has caught my attention is Ilika (IKA). Itās a British battery manufacturing company that is developing solid state batteries, which has recently signed a deal with Cirtec Medical in America. I read that the technology is potentially cutting edge, but it still sounds a little speculative.
Numbers wise, the company seems to have a very good debt to assets ratio (7-8%), but itās been burning money hugely in the last year. It is by definition a penny stock right now, which is why Iām nervous- I know they tend to be high risk, high reward. Iāve never dabbled in penny stocks before. I was wondering if anyone with more experience knows of this company, and if theyād be able to share their thoughts on whether this company might be a good investment?
If I go in on this, I accept full responsibility for the decision and wonāt blame anyone but myself if it goes badly.
It looks an interesting company, but on a quick 5 minute. view, they have a cash runway of a little over 2 years.
Iāve not done any analysis of their cashflows, but it might be good to do a peer group analysis.
Similarly their annual report came out just last Friday, so well worth a read.
I do like their āAsset-light licensing modelā - essentially means they are not limited by scale to resell their designs.
It is a more ālong termā proposition - they will likely require further funding, and the roadmap is to 2030 at present to reach Giga production scale.
Thanks for the second opinion. Iāll read the report immediately- thanks for pointing it out (Iād gotten so caught up reading opinions online, news stories, researching the technology, looking over financials and such that I had forgotten to check for recent reports). That just shows I need more practice, so Iām glad I didnāt rush in without consulting anybody for help.
You actually reached the same conclusion I had that this is a long term proposition- itās definitely a legit company rather than a pump and dump scheme by scammers (the fear of running into these is why I have avoided penny stocks in the past), but itās certainly not a get-rich-quick scheme. Just one question, what do you mean by āpeer group analysisā?
Hi
Obviously I canāt answer for Dougal, but I think whatās meant by peer group analysis is to analyse the competing companies to this one to see how it stacks up against its āpeersā. I donāt know enough about this field, but taking house building as an example, you would take Persimmon, Barratt, Taylor Wimpey, Redrow, etc and compare their performances to each other to see both the state of the market and which one(s) are the best performers. Thatās how I do it anyway.