ITM Power - a buy on a long term investment basis considers Peter Brailey

Get Tom Winnifrith's new FREE weekly podcasts downloaded direct to your phone via i-tunes HERE

My interest in alternative energy companies on AIM has seen me conclude Simec Atlantis Energy (SAE) and Powerhouse Energy (PHE) are fundamentally un-investable to me. I like the sound of RedT Energy (RED) as noted here. ITM Power (ITM) has potential - I can see some good reasons to invest.

Another day, another fascist lawyers letter for Tom Winnifrith – see you in Court Bitchez. Read HERE

ITM is a company engaged in the commercialisation of Hydrogen as fuel. It earns both real commercial revenue and obtains grant funding. We are guided (RNS 30th May) that year end turnover to 30th April 2019 will be some £17 million compared to 2018 turnover of £14.1 million year and £9.2 million in 2017. The pre-tax losses in each year have also increased, which is a little worrying. It is of course burning cash each year. So on a simplistic fundamental level it is obtaining new business, but it’s costing more each year to deliver – so that’s all bad! IFRS-15 ("Revenue from Contracts with Customers") would appear to be a further hit to the financials in due course as revenue cannot be recognised until contract completion rather than on a staged basis. So that all sounds hopeless on the finance front, particularly given the market cap of £126 million. But I like the technology stage, the partners, the projects and the key shareholders.

Muddy Waters credits ShareProphets and Drunken Sailor as publishes new Burford dossier. Read HERE

I noted to the company's IR / PR adviser end of last week the absence of major shareholders declaration on the company website, as required under AIM Rule 26. Simon Hudson ITM’s IR/ PR representative at Tavistock was a gentleman as always (and I understand a ShareProphets subscriber so cannot be all bad!) and he promptly responded confirming JCB (12.6%) as the largest single shareholder.  Allianz (11.1%), Schroders (5.8%) and Herald (3.6%) add some credible institutional backing. To add spice Peter Hargreaves (8.8%) leads the high net worth individual investor list. I like this as a solid base of investors. I’m sure Simon will advise the company to make the company website AIM Rule 26 compliant PDQ. The key investor to me is JCB. I would suggest JCB is the UK’s leading vehicle maker, and one of the few world class manufacturing businesses we have left in the UK. To see them on the shareholder register speaks volumes to me about the potential of Hydrogen as a vehicle fuel and ITM’s potential to deliver alternatives to diesel on construction sites for example. ITM is working with Royal Dutch Shell (RDSB) on the rollout of UK vehicle hydrogen fuelling and elsewhere also in the industrial sector. ITM also works with Linde – the German based multinational specialist gases company with c.Euro17 billion turnover and owns the BOC UK specialist gasses business. Very few AIM companies can claim such prestigious influential and well financed partners.

BREAKING: New Purplebricks boss Vic Darvey hints at wholesale changes in UK business model. Read HERE

So what else does the company do? Several very interesting things. Fundamentally it turns water into hydrogen – water is of course H2O (two hydrogen atoms bound to each oxygen atom). Splitting these atoms apart takes lots of energy and most of the time it makes no sense to do so, as the energy required exceeds the resultant potential energy of the parts. But sometimes it does make sense. I flagged previously how renewable energy has come to be very dominant at times in the UK and elsewhere to the extent that at times we should, in my view, be looking to use the excess renewable electricity for other uses than simple grid supply. This excess energy can be stored in batteries, such as provided with Redt Energy (REDT) solutions as noted previously – but it is early stage for the commercialisation of this technology. This excess renewable electrical power can also be used within ITM supplied process plant to generate hydrogen which is then directly injected into gas grids. With a high energy density, and ability to burn without creating carbon dioxide this is a very “green solution” to the excess “green energy” available. I would note ITM is part of the consortium that includes National Grid (NG.) implementing a demonstration project in the UK and with German regional government funding in Germany also. I can see this being an area that may well obtain further funding and interest to commercialise. ITM advised in July 2019 it has commenced development of a production facility in Sheffield that has the capacity to produce up to 1,000MW of electrolyser capacity per annum. That is significant capacity by any measure and I note the company states it has 170 employees. This is a serious business of scale.

Neil Woodford – the dash for cash: Raven Property. Read HERE

To return to my earlier comments about turnover and profit and cash. This company is revenue generating at a small scale, but consuming cash. I think it will continue to consume cash for a while yet which is a big red flag in my book, as equity raises will be required. The company raised £5.7 million by placing at a share price of 17p in Jan 2017, and again raised more substantially to the tune of £29.4 million in October 2017 at 40p, but I would note the company provided an open offer to existing shareholders as part of this fund raise. As at 31st October 2018, ITM had some £15.6 million of cash and some £9.4 million of trade receivables over and above trade debtors. With a growing business one can only expect this working capital requirement to increase. The share price today, at 38p, is a discount to the last fund raise. I would expect further fund raises if this business does fulfil its potential but I like the open offer provided last time as at least recognising existing private investor shareholders do exist! I consider investment in this share to be speculative but it has clear potential and looks to me to be operating in areas of increasing interest, with good backing and partners. Despite the business being cash consuming, I call it a Buy on a long term investment basis.

Read HERE: Live Company – after Friday attempted no one watching o’clock announcement, “Operational Update”...

Filed under: ITM, ShareProphets podcast, lawyers letter, Burford, Purplebricks, Raven Property

UK Oil & Gas - another 50 percent share price fall the best case scenario? Peter Brailey reviews...


The big banks know what side their bread is buttered. Chris Bailey writes...


Two stocks which look slam dunk zeros considers Tom Winnifrith...


Premier Foods - a buy despite its high level of debt? Gary Newman reviews...


Bluebird Merchant Ventures - an Agreement supporting a positive view? A review from HotStockRockets


Rockrose Energy - a week is a long time says Peter Brailey...


Cineworld - a good shorting opportunity? Gary Newman reviews...


Silver is my metal of choice at the moment says Gary Newman


Golden Prospect Precious Metals - a gold buy


Hurricane Energy - valuation is far too high. I am short says Peter Brailey...


Altyn - mining equipment purchases, gold production increasing...


Versarien - when & at what price the attempted bailout fundraise?


The company playbook on Covid-19...


Doing nothing looks a great move... with a few possible exceptions says Nigel Somerville


As an investor, doing nothing is generally under-rated... but sometimes the facts have changed...


Bowleven - another AIM oil & gas play crunched by the market sell-off, is it a buy?...


A review of my favourite two gold stocks by Nigel Somerville


GVC & Aviva - catching up on some boring but worthy updates (& the continuing Amigo shambles)...


Volvere - a buy suggest Tom Winnifrith & Steve Moore


Finablr - the car-crash continues at Red Flag Central. Sell says Nigel Somerville


Aggreko, Ibstock, Ashtead & Robert Walters update - any value amongst them?


Hurricane Energy - more risks? Peter Brailey reviews...


Investment thoughts as fear has racked up in recent days - from Chris Bailey...


Ariana Resources - bank gains? A review from the HotStockRockets team...


Goldplat - interims emphasise return to profit & reasons for further encouragement


Gold set to remain strong & Highland Gold Mining a favourite producer considers Gary Newman


Petra Diamonds - now a sell? Gary Newman reviews...


B.P. Marsh and Partners - a buy say Tom Winnifrith & Steve Moore


OptiBiotix - now a US and Canada LPLDL distributor agreement...


Yourgene Health - Elucigene DPYD now approved for Australia, adding to confidence


Checking into InterContinental Hotels Group or Whitbread or Carnival instead?


Goldplat - further share buying interest, but still a buy? The HotStockRockets team review...


Pharos Energy - persistent seller providing a buying opportunity considers Gary Newman


Cluff Natural Resources - a buy says the team at HotStockRockets


Versarien - sell, and a target price of a few pennies if that says Tom Winnifrith


ITM Power - having been a great share tip, where is it going now? reviews Peter Brailey


NMC Health and Finablr - has Dr Shetty been a very naughty boy? Nigel Somerville reviews...


Ariana Resources - an exciting week ahead as interest (and the share price) mount


Rotala - trading statement, still a buy?


Ingenta - 2019 update & remains a buy considers the team from HotStockRockets


Apple & Tesla - are we getting close to the top? Lucian Miers reviews...


5 Slam-dunk sells for 2020 - January update and off to a flier says Nigel Somerville


Why value investors should buy PZ Cussons and not Crest Nicholson says Chris Bailey


UK Oil & Gas - 3 billion reasons to sell says Peter Brailey


Vast Resources is shortable and should be shorted says Tom Winnifrith


KEFI Minerals - after positive drilling results from Hawiah, shares still a buy?


Ariana Resources further adds to upcoming potential catalysts considers the HotStockRockets team


Sage, Sainsbury, Burberry & WH Smith update - buys amongst them?


Cluff Natural Resources is a speculative buy considers Gary Newman


Has Fevertree completely lost its fizz? Chris Bailey reviews...


Tip of the year Pires 24 percent ahead in 22 days but still value says the HotStockRockets team


Corporate updates frenzy - are Whitbread, Wood Group & Halfords buys?


Centamin - Endeavour deal off, ups dividend, shares down. Buy says Nigel Somerville


Where to place an investing bet in the gambling sector? Chris Bailey reviews...


Hostelworld - recovery potential? Gary Newman reviews...


Shoe Zone - full-year results suggest still income and further recovery attractions...


Sainsbury, Morrison and the two quid bargain bucket level...


Aston Martin - needing much more help than even James Bond can offer?


Next plc - where from here? Chris Bailey reviews...


Hurricane Energy - it is not in the Vomit list... but could be by the end of March...


Five slam-dunk sells for 2020 from Nigel Somerville


One of the 20 ShareProphets share tips of the year 2020. A buy from Tom Winnifrith...


Ingenta - a recovery buy?


Powerhouse Energy - still a sell after Santa update? Peter Brailey reviews...


What of - and where now for - my share tips for 2019? Nigel Somerville reviews...


Who might go the way of Thomas Cook in 2020? Lucian Miers reviews...


Ahead of my share tips for 2020, what of those for 2019? Chris Bailey reviews...


A dividend munchers update from Nigel Somerville


Time for a brokerage Christmas lunch review. Chris Bailey writes...


Ariana Resources - drilling news, shares well worth a look suggests Nigel Somerville


Three to take the Boris bounce profits in & Unilever unsurprisingly stumbles says Chris Bailey


Amino Technologies - various updates boost shares. Tom Winnifrith & Steve Moore write...


SolGold - a buy for the long term from these levels?...


Versarien - shocking interims & the cash is running out says Tom Winnifrith


BigDish only half apologies. Not enough says Tom Winnifrith, The Sheriff of AIM...


The FirstGroup share price train heads north again writes Chris Bailey...


Tesco - is the cash register set to ring big? Chris Bailey writes...


The Election and corporate stinkers Versarien & Purplebricks. Tom Winnifrith writes...


Give me corrugated board this Christmas, not more Metro Bank or Amigo desperation says Chris Bailey


Yourgene Health - a half-year results review from HotStockRockets


Image Scan Holdings - full-year results & where now following recent share price action?


FTSE reshuffle imminent - a review by Chris Bailey...


Argo Blockchain - a speculative buy? Gary Newman reviews...


Ariana Resources - potentially exciting deal to partially monetise Kiziltepe & Salinbas


KEFI Minerals - after recently soaring, Tulu Kapi project update...


Rolls Royce, Dignity & Sage - a catch-up by Chris Bailey


Versarien, Bidstack & AFC Energy - short now or later reviews Tom Winnifrith


easyJet - time to disembark? Chris Bailey reviews...


Views on Royal Mail, Centrica & Johnson Matthey from a jet lagged and thoughtful Chris Bailey


PetroTal - failure of finance & corporate governance control. Sell says Peter Brailey...


Time for General Inaction but still short Sirius Minerals argues Lucian Miers


RiverFort Global Opportunities - remains a buy say the team at HotStockRockets


Volex - positive interims, a good share tip and now we upgrade...


Oops...FirstGroup did it again. Chris Bailey writes...


Eco Atlantic - following Jethro & Joe wells initial results analysis, Peter Brailey reviews...


KEFI Minerals - financial & Tulu Kapi project updates... shares soar again & stance upgraded


Bluebird Merchant Ventures - Gubong permit received, shares very cheap?...


Rolls Royce remains an attractive long cycle stock considers Chris Bailey


A terrible deal for Sound Energy? Gary Newman reviews...


Marks & Spencer - you know what happens when there are no believers...


RISK WARNING & DISCLAIMER - tips are provided by independent authors via a common carrier platform and do not represent the opinions of does not accept responsibility for or make any warranties in connection with or recommend that you or any third party rely on such information. The information available at and via emails you receive from [email protected] are for your general information and use and are not intended to address your particular requirements. In particular, the information does not constitute any form of advice or recommendation by the tipsters or and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Trading shares involves the risk of loss. The tipsters and shall not be liable for any losses or other damages incurred. The value of investments can go up or down and the past is not necessarily a guide of future performance.

Five Free Share Tips?

. . . . . . . . . .

Well actually it will be six. One every week day and one on Sunday, each landing with you at 11 AM sharp.

The Details

Unlike other services (which may always have a vested interest) we pride ourselves on our impartiality and cover all small caps including AIM. the Standard List, The Wider Main Market and NEX.

We cover small caps, penny shares, FTSE 350 stocks and blue chips. We look for red hot penny shares, Warren Buffett style value investments with yield and growth stocks. There is no technical analysis in our work just solid fundamental analysis from a team of experts with decades of stockmarket experience.

You will not agree with all we publish but if you are interested in small caps you cannot afford to ignore it either. Yo'll never be charged for the free share tips from Five Free Share Tips and given the star writers involved you know that they will move share prices.

There's no telephone number or postal address required and there is no charge, ever, for your Five Free Share Tips membership. Just free shares tips every day apart from Saturday And each day's share tip will not just be a few thoughts cobbled together but will be detailed analysis from experts.

Our experts do not just earn their living from writing. All own shares. If they own shares in a stock they cover they will declare it and will not sell until after advising a sell to our readers. And why not our tips are so good that why shouldn't our readers put their money where their mouth is?

Don't just take our word for it! Judge us on the calibre of our free share tips and join today to start receiving them from September 1 2017. If you don't like what you get delivered to your inbox unsubscribe and you will never hear from us again. So why not give it a go? Sign Up Now

The Team

We've put together a panel of top tipsters, including:

Tom Winnifrith, in his 27th year writing about shares, noted fraudbuster & dubbed "The maverick Tipster"

Chris Bailey, City whizz kid turned financial guru, rated as one of the top 50 commentators on shares on twitter, founder of Financial Orbit

Steve Moore, has worked with Tom Winnifrith for all bar 3 weeks of his working life - a noted commentator on value stocks

Malcolm Stacey, The Grandfather of Share Blogging, the founder of ShareCrazy & a best selling autthor of stockmarket books

Lucian Miers, the Bard of the Boleyn, one of the UK's best known short sellers

Gary Newman, writes about value investing on AIM, speciality is in share tips on oil and mining companies

Nigel Somerville, The Deputy Sheriff of AIM, an expert in forensic analysis a skill used to bust frauds but also to tip true value investments

The team from HotStockRockets, specialising in AIM and small cap shares which will fly on a three month view

Sign Up Now

UK Investor Show 2018

Remember to book your place at the UK Investor Show 2018. The UK’s top investment show taking place on Saturday 21 April 2018 at the Queen Elizabeth II Conference Centre in Westminster, London. The show will feature a unique line-up of top speakers including Nigel Wray, tech queen Vin Murria, Dave Lenigas, Mark Slater, Tom Winnifrith, Adam Reynolds, Ed, Croft, Nick Leslau Luke Johnson and Dr Johnny Hon as well as 135 exhibiting small cap companies.

To reserve your ticket, visit UK Investor Show.

Risk Warning & Disclaimer

The hot share tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the share tips contained here should seek independent advice from a Financial Conduct Authority authorised Stockbroker or Financial Adviser. We cannot be held liable if individuals suffer losses through following share tips contained on this site or emailed out as free share tips. The value of investments can go down as well as up. The past is not necessarily a guide to future performance. Investing in shares can lose you part or all of your capital although the potential returns are theoretically unlimited. The difference between the buy share price and the sell share price for smaller company shares (penny shares) can be significant. Profits from dealing in shares may be liable to tax - the level of tax and bases of relief from tax are subject to change. Changes in the rates of exchange may have an adverse effect on the value or price of an investment in sterling terms if it is denominated in a foreign currency. Some of the shares recommended on this site will be smaller company shares. By their nature such investments can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares (or 'small caps'/'penny shares'). & its sister site defines a smaller company share as any stock traded on AIM or NEX or which has a market capitalisation of less than £300 million.