Transitioning to profitability

Horizon Discovery (LSE: HZD) is listed on London’s junior AIM market. At a share price of 173p, its market capitalisation is £260m.

It’s a global leader in the design, manufacture and application of gene editing and gene modulation technologies. Its products and services are used by researchers and drug developers, and it counts major pharmaceutical companies, including AstraZeneca, among its customers.

Horizon has been building scale and is currently loss-making. However, it’s appointed a commercially savvy chief executive to lead its transition to profitable growth. Annual results are due next Monday, and company guidance is for revenue of £58.7m, gross margin in excess of 67% (versus 62% in 2017), and year-end cash of not less than £25m.

There’ll still be a bottom-line loss at this stage, but I view a valuation of 4.4 times sales as attractive for a cashed-up company with strong growth prospects. Horizon’s management turned down a 181p a share takeover approach from Abcam last year, saying it “fundamentally undervalues” the business. I see the stock as a credible speculative buy.

Exponential revenue growth

Optibiotix (LSE: OPTI) is another AIM-listed company. At a share price of 81.5p, its market capitalisation is £70m.

It develops compounds that modify the human microbiome. These compounds help in the prevention and management of chronic lifestyle diseases, including obesity, high cholesterol and diabetes. It’s moved from research and development to inking an impressive 30-odd (and counting) commercial deals with food and pharmaceutical companies.

Ordinarily, I wouldn’t buy a stock trading at more than 10 times sales — required revenue of not less than £7m in Optibiotix’s case, versus actual revenue of just £541,000 in 2018. However, 85% of this was generated in the second half of the year, and we’re in the very early stages of its partners ramping up sales.

Due to the prospect of exponential revenue growth — much of which will drop straight to the bottom line under the company’s licensing business model — this is a rare instance where I’d be prepared to ignore my less than 10 times sales rule. As such, it’s another stock I see as a credible speculative buy.

Rising earnings

Vectura (LSE: VEC) is a constituent of the main market FTSE SmallCap index. At a share price of 72.5p, its market capitalisation is £482m.

It’s a leading designer of devices and developer of products that help patients suffering from airways diseases. It has growing global royalty streams from 20 products, and a portfolio of drugs in clinical development with multiple partners, including FTSE 100 group Hikma and Swiss giant Novartis.

Vectura posted a hefty loss on revenue of £160m last year. This was due to (non-cash) charges, including a £39.8m impairment after a disappointing result from one of its pipeline programmes. However, cash flow was strong, and even after investment of £12.3m and share buybacks of £13.8m, year-end cash increased to £108.2m from £103.7m at the start of the year.

The stock is trading at 15.4 times forecast 2019 earnings of 4.7p a share. And the multiple falls to 12.7 times next year’s forecast earnings, with City analysts having pencilled in 21% growth to 5.7p a share. The valuation looks attractive to me, and I’d be happy to buy the stock.

The post 3 under-the-radar healthcare stocks I think have great growth potential appeared first on The Motley Fool UK.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has recommended Abcam, AstraZeneca, and Hikma Pharmaceuticals. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Since then we’ve seen a 40% share price gain to 98p, though August has brought a drop back from a peak of 133p. The lesson I take is that growth shares tend to be volatile, and it’s far too early to decide if I was right back then or not.

The company is big in obesity, high cholesterol and diabetes treatments, and our increasingly wealthy world faces serious problems with all three. A great potential market, then.

We’re not looking at sustainable profits yet, but Thursday’s first-half results update spoke of “a strong period of growth … announcing multiple agreements,” and a “transition from a development company into a commercial business.“

Partnerships growing

Highlights include an agreement for the US manufacturing and supply of the firm’s SlimBiome product, the successful completion of taste studies on SweetBiotix, and multiple production, distribution, and marketing agreements covering a range of OptiBiotix products. Oh, and SlimBiome won two awards for its weight management and health properties.

The bottom line shows a loss after tax of £1.085m, with a cash position of £1.797m at the end of the period. That might sound tight, but the company reckons it will “cover the delivery of existing development and commercial plans.“

Getting to sustainable profitability is crucial, and I think it might be a close thing. There’s still some significant risk here, and should the cash run out then dilution through new funding would be possible.

But on balance, I still see OptiBiotix Health as a tempting growth buy.

Income champion

At the other end of the size scale, we have pharmaceuticals giants like GlaxoSmithKline (LSE: GSK), whose shares have actually put many a growth candidate to shame in 2018 with a 20% gain so far.

But a share price recovery after Glaxo stemmed its falling earnings following several years of hits from the expiry of key patents is only part of the picture — for me, Glaxo’s strength is as a long-term dividend payer.

Even while EPS was falling, the company maintained its dividend, which yielded 6% last year. Forecasts for the next two years suggest 5% on a higher share price, and we should even have modest cover by earnings — not great yet, but probably enough for now.

Approvals

The key obviously lies in drug development, and GlaxoSmithKline’s drugs pipeline does seem to be progressing well, with positive updates on new treatments coming in regularly. The latest, on Thursday, concerns the company’s Nucala (mepolizumab) add-on treatment for asthma, which has now gained European Commission marketing authorisation for use with paediatric patients.

Like OptiBiotix’s obesity-related products, this one is also targeted at a very serious chronic condition, which again seems to be on the rise in the developed world. And mepolizumab sounds like it’s using an innovative approach as the only drug so far aimed at its specific biological target.

The big question is how long it will be before Glaxo’s stream of new products results in a return to sustainable earnings growth, and flat forecasts for this year and next can’t tell us yet.

But I’m confident it will happen, and for now we can keep taking those dividends.

The post A soaring growth candidate plus a FTSE 100 dividend stock I’d buy today appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The fatness epidemic

The first is OptiBiotix Health (LSE: OPTI), which develops products aimed at tackling the problems of obesity, high cholesterol and diabetes — all very big issues in the overfed developed world. The company’s bottom line is starting to turn upwards, and there have been some key developments that convince me that serious profit might not be too far away now.

On Thursday the company announced “an evaluation agreement with a global dairy company for its SweetBiotix calorie-free sweet fibres,” which could see them ending up in a range of products. We don’t know which company it is, but according to CEO Stephen O’Hara, it’s a well-known global brand.

This news comes a week after the firm’s annual results were released, for a year it says is part of a “transition from a development company into a commercial business.“

OptiBiotix reported a profit-sharing agreement with Sacco among 10 commercial deals agreed in the period. Its SlimBiome product won a Food Matters award for Best Functional Ingredient for Health and Wellbeing, and FDA registration for LP-LDL and SlimBiome are paving the way for sales in the US.

There was even a small pre-tax profit, of £1.69m. And OptiBiotix looks to be in a comfortable financial position, having just raised £1.5m through a new equity offering.

My colleague G A Chester recently rated it a high-risk buy, and I agree with him.

Cash cow already

When I examined XLMedia (LSE: XLM) early last year, the shares had nearly three-bagged since 2014 and I saw the stock as a very tempting proposition. Since then the share price has put on a further 50%, as the company is firmly in that territory envied by many a growth startup — it’s in the transformation from growth prospect to dividend-paying cash cow.

The company, which bills itself as a provider of “digital performance marketing services,” saw its 2017 revenues grow by 33%, with adjusted EBITDA up 36% and earnings per share up 25%. And it had plenty of cash on the books and no debt.

The shares have actually fallen back a little since the end of 2017 as earnings forecasts have been pared back a little. But that’s a common phenomenon with growth stocks, and I reckon it still leaves the shares on a pretty attractive valuation.

We’re not looking at the super-low PEG ratios of recent years as EPS has been making annual double-digit percentage leaps, and the latter is expected to be flat this year. But a return to growth with 8% indicated for 2019 would put XLMedia on a P/E of a little under 15 — and that’s with dividends set to already yield 3.5% by then.

For a company in a growing market, with significant further growth potential, and already bring in pots of cash and paying decent dividends, I reckon that’s a bargain price. And $43.3m (£34.5m) in cash at year-end for a debt-free company with a market cap of £360m isn’t too shabby either.

The post Investing in your 20s? These emerging growth candidates could help you retire earlier appeared first on The Motley Fool UK.

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Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Highly effective and productive

Alliance was founded in 1996 and entered into a fostering arrangement with Novartis, under which it took over the marketing and distribution of 16 of the Swiss giant’s speciality prescription brands. It’s gone on to acquire or license the rights to 90 established pharmaceutical and consumer healthcare products from various companies.

Alliance’s low-risk business model has been highly effective and productive. Management advised in a recent pre-close trading update that annual revenue broke through £100m for the first time in 2017.

Robust growth

The company continues to expand its portfolio under founder and chief executive John Dawson and a board of fellow industry veterans. Two recent product acquisitions — Vamousse (head lice) from TyraTech and Ametop (local anaesthetic gel) from Smith & Nephew — will be immediately earnings enhancing.

Revenue for 2018 is forecast to increase 14% to £118m, with earnings and dividends similarly increasing to 4.8p and 1.5p. The forward price-to-earnings ratio of 14 and dividend yield of 2.2% represent great value to me for a well-managed business with a history and outlook of robust growth. As such, I rate the stock a ‘buy’.

Seductive stories

Optibiotix (LSE: OPTI) is a rather different investment proposition to Alliance and also a more speculative one. Generally, I steer well clear of companies that are at the pre-revenue (or negligible revenue) stage, as a large proportion of them disappoint. But occasionally one pops up where I see genuine potential for high rewards.

Of course, all such stocks have a seductive ‘story’ — Optibiotix’s is products that modulate the human microbiome to tackle such things as obesity, high cholesterol and diabetes — but it takes more than a seductive story for me to consider it a potential investment.

Crucial questions

There are a number of crucial questions to which I must feel able to give an affirmative answer. These include: Are the directors of the company experienced and credible? Is its technology credible, patent protected and so on? Does it have a sound commercial strategy for bringing its products to market?

For me, Optibiotix ticks all the boxes for these sorts of question. Of course, there’s then another crucial question: How much would I be willing to pay for the shares?

Multibagger potential

When I wrote about the company last year, the shares were trading at 68.5p and the market capitalisation was £54m. This is the sort of level from which it’s possible to envisage a serious multi-bagger, if the company were to deliver on its potential. And it looks more attractive today, because the shares have slipped below 60p in the recent market wobble taking the market cap to £46m.

Optibiotix is the sort of stock I’d only take a very small position in as part of a diversified portfolio — sized to have a good impact on returns if hugely successful and a tolerable level of negative impact if a total write-off. In short, I rate the stock a ‘buy’ at the high-risk end of the spectrum.

The post 2 ‘secret’ pharma stocks I’m considering buying right now appeared first on The Motley Fool UK.

More reading

• Why I think the HSBC share price could hit 2,000p by December
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• Prediction: Diageo shares could soar in the next 5 years if this happens…
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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Multinational, multi-sector prospects

Shares of AIM-listed Optibiotix Health (LSE: OPTI) are trading down about 3% today after a decent run-up in advance of its half-year results, which were released this morning.

With a pipeline of patent-protected products, which modulate the human microbiome to tackle such things as obesity, high cholesterol and diabetes, Optibiotix has stimulated interest from national and multinational companies in both consumer health and pharmaceutical markets. Indeed, it has already penned agreements with, among others, Tata Chemicals, one of India’s leading suppliers of food ingredients and HLH BioPharma Vertriebs, one of Europe’s leading suppliers of probiotics to the pharmacy market.

Commercial take-off

Today’s results for the six months ended 31 May showed revenue of a mere £75,000, compared with cost of sales of £35,000 and administrative expenses of over £1m. Nevertheless, the company reported a statutory profit of £3.2m. This was due to it de-merging and giving a separate AIM listing to its majority-owned skincare subsidiary, Skinbiotherapeutics, leading to an uplift in the value of its investment.

While the income statement showed a profit and the balance sheet a nice increase in net assets, the cash flow statement recorded cash burn of £1.2m. Nevertheless, Optibiotix retains cash of £1.9m, which it says is “sufficient to cover the delivery of existing development and commercial plans.”

With the company targeting a number of “large markets (>£100m) where there are high growth opportunities (CAGR >10%) and a large unmet need” this £54m cap company — at a current share price of 68.5p — could grow rapidly as current and future commercial deals take off. The shares look very buyable to me as a higher-risk-but-potential-very-high-reward proposition.

All not as it seemed

Until recently, many investors viewed support services firm Mitie (LSE: MTO) as a steady growth and reliable dividend stock. Earnings growth had supported annual dividend increases that had taken the payout from 1p a share in 2000 to 12.1p a share last year.

However, all was not as it seemed, with the company increasingly betraying signs of aggressive accounting — and perhaps worse — as I explained when I tagged it The one FTSE 250 stock I’d sell ASAP in May. As this has all begun to unravel, I was expecting some serious ‘kitchen-sinking’ in its annual results on 12 June and a discounted fundraising to shore up the balance sheet at some point, well below the share price of 211p at the time I was writing.

Can of worms

The kitchen-sinking didn’t happen to the extent I expected and, while the dividend was suspended, there’s so far been no fundraising. The shares are currently trading at 267p but I maintain my ‘sell’ stance on the basis of my conviction that there are more worms to come out of the can.

My conviction is only strengthened by Mitie announcing yesterday that the Financial Conduct Authority has launched an investigation into the “timeliness” of its profit warning last September and, more importantly, into “the manner of preparation and content of the company’s financial information, position and results” for its last financial year.

The post 1 emerging growth stock I’d buy and one fallen dividend hero I’d sell appeared first on The Motley Fool UK.

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G A Chester has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

In a trading update covering the four months to 30 September, NCC said it had experienced “a number of setbacks in the Assurance Division including three large unrelated contract cancellations, a large contract deferral and difficulties with some managed services contract renewals.”

I was expecting the announcement to continue with a warning on full-year profits. However, management said that the “rate of growth in profitability will now be more biased towards the second half of the year than initially expected, but remains in line with the board’s expectations.”

Lack of earnings visibility

Clearly, the market isn’t convinced — and rightly so in my view. Despite NCC operating in a growth industry, I’m wondering whether the contract problems are merely an unfortunate cluster of one-offs or a precursor to more challenging times ahead. If the latter, a profit warning would be almost certain in the coming months, and expectations of mid-teens earnings growth this year and next would go out of the window.

NCC has commanded a premium rating on the basis of its earnings growth, and even after today’s nosedive in the shares, the P/E is still relatively high at 18. There’s potential for the shares to fall a lot further, if we get the toxic combination of a profit warning and the market deciding the company merits a lower earnings rating.

Due to the lack of earnings visibility, I think NCC is a stock to avoid for the time being.

Creating shareholder value

One company with more positive news this morning was Optibiotix Health (LSE: OPTI). This AIM-listed firm has a growing portfolio of patents on compounds that change the way microbes in the body work and interact.

For example, it has compounds that reduce cholesterol, for which there’s an option agreement with “a multinational consumer goods company” (rumoured to be US giant Procter & Gamble) and compounds that tackle obesity, for which there’s a commercial agreement with the owner of Slimfast.

In fact, Optibiotix now has four distinct divisions and while progressing commercialisation, is also looking to create shareholder value by potentially giving each division a separate public listing.

Today’s news was of an increased investment in its majority owned SkinBiotix joint venture to “complete the development and human studies for the first product application, in addition to funding activities to support an initial public offering.”

Speculative buy

Today’s announcement from Optibiotix is another promising development, but the market is becoming impatient for some really major commercial news. The shares have drifted lower in recent months and have edged down again today to 67p, valuing the company at £52m.

Optibiotix clearly has genuinely valuable intellectual property, interested commercial partners and potential to earn significant revenues from a small royalty on the huge volumes of products shifted by fast moving consumer goods companies — as well as opportunities in such areas as healthcare-acquired infections and wound care.

For these reasons, I continue to rate the stock as one of the best buys at the more speculative end of the investment spectrum.

The post What does today’s news mean for shareholders of these two stocks? appeared first on The Motley Fool UK.

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G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of NCC. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The shares have moved higher in early trading, and at 208p are back to their pre-referendum level. Management said that so far since the Brexit vote it’s been business-as-usual, but what I particularly liked was the following comment.

“The completion of our commercial development pipeline in progress, largely already pre-let and/or pre-sold is likely to see the Group be cash generative over the next two years and, should the post referendum world prove to be more turbulent than we are experiencing at the moment, these internally generated funds should provide the resources to acquire competitively priced opportunities for the next cyclical growth phase”.

Trading on a price-to-earnings (P/E) ratio of just 9.9, an attractive price-to-earnings growth (PEG) ratio of 0.5, and with a handy 3.2% dividend yield, this looks a very buyable stock to my eye.

Bright outlook

Improved commodities prices and a weaker pound have led to a brighter outlook for global natural resources royalty company Anglo Pacific (LSE: APF). Management reported a solid start to the year in its interim results this morning, and said that as things stand, the company expects royalty income for the full year to be significantly higher than in 2015.

The shares, which had reached a low of not much more than 50p earlier this year, are now up to 97p — bang in line with the net asset value (NAV) reported this morning. However, the directors state that they consider the value of a number of assets to be higher than that recorded on the balance sheet (three times higher in one case), so the stock still appears to be at a discount to inherent NAV.

Combine the attractive asset picture with a forward 6.2% dividend yield and a forecast 2016/17 PEG of just 0.2 and this is another share I currently rate as a buy.

Speculative opportunity

There was little we didn’t already know in this morning’s half-year results from Optibiotix Health (LSE: OPTI). The company, whose patent-protected compounds change the way microbes in the body work and interact, has a growing portfolio of products reaching commercialisation in high public interest areas including obesity, high cholesterol and diabetes.

Optibiotix already has commercial agreements with the brand owners of Slimfast and with DSM, the world’s leading supplier of nutritional ingredients. The company added today that commercial discussions with further potential partners across both consumer and pharma “have indicated a wider range of opportunities than initially envisaged,” and that it expects to report on these commercial discussions in the coming months.

Optibiotix is lossmaking at this stage in its life (£0.61m in the first half) but has cash of £3.55m, which it says is sufficient to fund its existing research and development programmes.

I’m not generally keen on ‘blue-sky’ companies, but Optibiotix’s business and market opportunities are relatively easy to understand, there’s clearly significant commercial interest in its products, and the company could rapidly grow into — or exceed — it’s current valuation of £61m at a share price of 70p. As such, I rate the stock as one of the better speculative buys in the market.

The post 3 small-caps to buy after today’s results? appeared first on The Motley Fool UK.

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• Why I think the HSBC share price could hit 2,000p by December
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• Prediction: Diageo shares could soar in the next 5 years if this happens…
• With a P/E of 5.9 is this a once-in-a-decade opportunity to buy dirt-cheap easyJet shares?

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of Anglo Pacific. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Attractive buy

The company has come through a phase of expiring patents, which has temporarily reined-in revenue and profits, but ageing populations in the developed world and rising demand in emerging markets remain long-term drivers for growth. Glaxo is well positioned to benefit, with its four divisions of pharmaceuticals, consumer health products, vaccines and HIV medicines.

The company is set to put the recent lacklustre period behind it with a return to revenue growth this year. City analysts forecast an earnings rise of 15%, and this is expected to be just the start of a new growth trajectory. As such, Glaxo appears an attractive buy at a current share price of 1,436p on a price-to-earnings ratio of 16.4 and with a dividend yield of 5.6%.

Commersialisation underway

Tissue Regenix (LSE: TRX) has a patented technology that decellurises animal and human tissue, leaving a “tissue scaffold which is not rejected by the patient’s body and can then be used to repair diseased or worn out body parts”.

In its annual results released this morning, the company reported revenue of £0.8m in the first year of commercialisation of its flagship wound care product, and good clinical progress on orthopaedic and heart-valve products. Revenue is set to rise rapidly, with analysts having pencilled-in uplifts to over £3m, followed by over £10m.

As expected, Tissue Regenix reported a £10m pre-tax loss for the year just gone, reflecting its investment in commercial infrastructure and clinical trials. However, with year-end cash of £19.9m and rising revenues, the financial position of the company is strong.

With the shares modestly lower in early trading, Tissue Regenix is valued at £131m. However, the size of the regenerative medical devices market is huge and with the commercial potential of the company’s products starting to be realised, the business could come to be worth a multiple of its present value. As such, it could prove a good buy for investors looking for a higher risk/higher reward opportunity.

A speculative investment

Optibiotix Health (LSE: OPTI) is behind Tissue Regenix on the road to commercialisation, but like the regenerative tissue company, it has genuine and valuable intellectual property. In Optibiotix’s case, this is centred on tackling obesity, high cholesterol and diabetes with patented compounds that change the way microbes in the body work and interact.

Optibiotix may have no commercial revenues at this stage, but a number of joint development, cost-sharing and option agreements are in place, including with Slimfast and an unnamed “multinational consumer goods company”.

At a current share price of 80p, Optibiotix is valued at £62m. At this stage of its development, Optibiotix remains a speculative investment for those with a high tolerance for risk, but big business is clearly interested in the company’s technology and the potential markets are huge. These markets were further extend just last week when Optibiotix filed a new patent for microbial proteins with the potential to tackle hospital superbugs such as MRSA.

The post Are GlaxoSmithKline plc, Tissue Regenix Group plc and Optibiotix Health plc must-have health stocks? appeared first on The Motley Fool UK.

More reading

• Why I think the HSBC share price could hit 2,000p by December
• £15,000 invested in UK shares a decade ago is now worth…
• 3 FTSE shares with many years of consecutive dividend growth
• Prediction: Diageo shares could soar in the next 5 years if this happens…
• With a P/E of 5.9 is this a once-in-a-decade opportunity to buy dirt-cheap easyJet shares?

G A Chester has no position in any shares mentioned. The Motley Fool UK owns shares of and has recommended GlaxoSmithKline. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

Even if a takeover doesn’t happen, Entertainment One continues to be an excellent buy at the present time. Factoring-in today’s share price rise, it trades on a price-to-earnings (P/E) ratio of just 9.9 and with the company’s bottom line expected to rise by 16% next year, this puts it on a price-to-earnings-growth (PEG) ratio of just 0.6. This indicates that Entertainment One offers significant capital gain potential over the medium-to-long term and it could be about to reverse its disappointing share price fall of 40% during the last year.

Risky but rewarding?

Also in the news today is Eland Oil & Gas (LSE: ELA), with the company’s share price rising by around 20% after it announced an operational update on the Opuama-3 well re-entry. Notably, canal access clearing operations have been completed, providing the required access to the Opuama-3 wellhead. Furthermore, the mobilisation of contractor equipment, crude storage barges and the associated marine spread from Warri and Port Harcourt to the Opuama-3 wellhead has now been completed.

Looking ahead, Eland expects to complete flow-testing of Opuama-3 within the coming weeks. The company is upbeat about the prospect of perforating two new zones and it believes that they could be highly productive and could almost double reported production rates. As such, Eland could be a stock for less risk-averse investors to take a closer look at, although with the wider sector offering excellent value for money there may be lower risk opportunities elsewhere that offer high potential rewards.

Meanwhile, life sciences company OptiBiotix (LSE: OPTI) today released full-year results that showed it’s making progress on its strategy of delivering compounds to tackle obesity, high cholesterol and diabetes. Although its pre-tax loss increased versus the previous year, OptiBiotix was able to increase the size of its intellectual property portfolio and signed multiple commercial agreements, including one with Slimfast after the end of the year.

With OptiBiotix having successfully conducted a placing last year and also since the end of the year, its research and development programme appears to be well-funded. In fact, it has a cash position of £4m and this should also allow it to extend its technology platforms into new product and application spaces.

Clearly, with the company having made a loss of £1.4m last year, it remains a relatively high-risk play. But for less risk-averse investors who are seeking a smaller company to buy alongside a healthcare major, OptiBiotix could be worthy of consideration.

The post Will Entertainment One Ltd, Eland Oil & Gas PLC And OptiBiotix Health PLC Soar Following Today’s News? appeared first on The Motley Fool UK.

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Peter Stephens owns shares of ITV. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

The study of 50 volunteers was conducted over 12 weeks and showed that those taking OptiBiotix’s capsules saw a 7.2% reduction in so-called bad cholesterol, with the female element of the test group seeing a 12.4% reduction. Among those aged between 50 and 55, there was a 15% reduction in bad cholesterol. Those volunteers with exceptionally high levels of cholesterol saw their levels reduced by an impressive 36.7%. As previously indicated, no safety, compliance or the tolerance issues were reported by volunteers.

The positive clinical data for OptiBiotix’s cholesterol-reducing capsules has been available for some time and as a result, investors have flocked to its shares over the past year. Shares in the company are up 150% over the last 12 months.

But over the long-term OptiBiotix’s shares could yield even greater returns. With an ageing global population and considering the limitations of existing products such as statins, the commercial potential for OptiBiotix’s cholesterol-reducing capsules could be huge. 

The size of the statins market is expected to reach $12.2 billion by 2018 and even if OptiBiotix can only capture a tiny percentage of this market the company shares could be worth multiples of the current price.

A leading gold producer 

Centamin (LSE: CEY) is also on the rise this morning after the company announced that gold production at its flagship Sukari mine in Egypt had increased by 6.5% during the first quarter to a record 125,268 ounces. This increase means the company is now well on its way to hitting its targeted production of 470,000 ounces this year. What’s more, Centamin announced that it has been implementing improvements at its Sukari mine, which should reduce per-ounce production costs. Management has previously said that it’s targeting cash operating costs of $680 per ounce and all-in sustaining costs of $900 per ounce.

It’s easy to see why Centamin’s shares are heading higher today. The upbeat production announcement is just the latest in a series of positive updates from the company, which has consistently under-promised and over-delivered. 

Indeed, even in a harsh operating environment over the past five years, Centamin has increased gold production and remained profitable while many of its peers have struggled to keep their heads above water. Cash costs have been reduced and at the end of 2015 the company remained debt-free and unhedged with cash, bullion on hand, gold sales receivable and available-for-sale financial assets of $230.7m, up around 50% year-on-year.

That being said, Centamin’s outlook remains dependent on the gold price, although the price of gold seems to have stabilised this year. 

If you believe the price of gold is set to head higher, Centamin could be the way to play it. The company’s shares currently trade at a forward P/E of 15.4 and support a dividend yield of 2.2%.

The post Is It Time To Buy OptiBiotix Health PLC & Centamin plc After Today’s News? appeared first on The Motley Fool UK.

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Rupert Hargreaves has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.