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Digging for value in a high-tech mining company

 

Digging for value in a high-tech mining company

When it comes to investing in small caps, Australian investors are spoiled for choice with around 2,000 small caps listed on the ASX. For us at Montgomery, there are realistically around 400 small caps that meets our investment criteria. Out of those, we invest in 30 to 50 stocks at any one time. In the Montgomery Small Caps Management Video Series, I talk with companies we own in the fund to help investors get under the hood of the small and emerging companies we invest in.

In our first video, we welcome Paul House, the recently announced Chief Executive Officer at IMDEX Limited (ASX:IMD). We like small companies with strong growth potential and IMDEX has grown substantially with a market cap over $550 million and sales in 102 countries across the world. Founded in 1980 and listed on the ASX in 1987, IMDEX has established a dominant market position within its niche industry segment.

“IMDEX has solutions that we offer across the entire mining value chain, everyone right from exploration right through to extraction. We place technology leadership as the number one differentiator or priority within our business.” Paul House

In this video, you will learn about the business model, how IMDEX navigates the cyclical nature of mining, and the scale of the opportunity looking at the addressable market.

As a global mining-tech company, with a strong management team, an attractive product suite, high returns, and a net cash position, IMDEX could be set for a significant step-up in earnings growth.

We look forward to your comments on the video.

The Montgomery Small Companies Fund  owns shares in Imdex. This video was prepared 27 November with the information we have today, and our view may change. It does not constitute formal advice or professional investment advice. If you wish to trade Imdex you should seek financial advice.

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Gary is the Portfolio Manager of the Montgomery Small Companies Fund. Gary joined Montgomery in August 2019 after spending three years at MHOR Asset Management in Sydney as a Founder and Portfolio Manager. Prior to this, Gary was a Portfolio Manager at Renaissance Asset Manager in Sydney for six years. Before moving to Australia, Gary spent five years in London running Morgan Stanley’s Technology Sector Equity Research Team, as well as two years covering technology companies for JP Morgan.

This post was contributed by a representative of Montgomery Investment Management Pty Limited (AFSL No. 354564). The principal purpose of this post is to provide factual information and not provide financial product advice. Additionally, the information provided is not intended to provide any recommendation or opinion about any financial product. Any commentary and statements of opinion however may contain general advice only that is prepared without taking into account your personal objectives, financial circumstances or needs. Because of this, before acting on any of the information provided, you should always consider its appropriateness in light of your personal objectives, financial circumstances and needs and should consider seeking independent advice from a financial advisor if necessary before making any decisions. This post specifically excludes personal advice.

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4 Comments

  1. Thanks Gary and Paul for this illuminating discussion –

    on a side issue I am always amazed that companies like Imdex – that are doing such interesting things – don’t have easily accessible explanations – say an hour long documentary detailing what their technologies are, how they work, interviews with engineers, experts s and customers. Might be cost some money to put together but this is difficult stuff for the general public and even institutional investors to grasp.

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