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Falling Review Price breached - Niox

NIOX Group (CIR, AIM All-Share, Market Cap £273m, 63.0p, 4.5% of JIC Portfolio, Medium Risk/High Reward 5.0% target position)


Niox Group Plc is a United Kingdom-based medical device company, which is focused on point-of-care asthma diagnosis and management. NIOX is a portfolio of products that improve asthma diagnosis and management ...


Falling Review Price breached!


Niox, at 63.0p, is below my FRP of 65.7p. There is a long gap between its last announcement on 26th September (results for the six months ended 30th June) and a year-end trading update expected in early January. The share price is 14 per cent below its closing price on 21st September.

I expect trading to prove robust in H2, with continued sales gains and margin improvement.


I still believe the endgame is that a trade buyer will buy Niox, but not until the CEO and the major shareholders believe they are not giving away too much value.


On 26th September, I said that “shorter-term traders might take profits”. That seems to have been the case, and in the absence of news, it has settled into a trading range. I’m happy with my 75p Rising Review Price (RRP), which would give a short 20 per cent upside.


Stockopedia gives it a StockRank of only 54. I think because there is a little history, with the new CEO and team only being in place for a few years and turning the business around. Return on capital and Equity is rapidly improving, and I think Stockopedia will give it a decent Quality score before long. Cashflow is robust; this year, it paid a 2.5p maiden dividend. I expect at least the same next year -giving a 4.1 per cent yield.

Source: Stockopedia


FWIW, reckons it trades 39% below fair value, making my 75p target look conservative.



Hopefully, the share price will pick up now that the next news is imminent.


I have reduced my FRP to 60p, which is below the 200-day moving average and the lowest price since July.




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