What’s happening with Obducat?
One company that attracted a great deal of attention from nanotechnology investors during the nanotechnology hype of 2004 was Obducat (OTCMKTS:OBDCF), a Swedish company supplying nanoimprint lithography solutions. The interest was so great that it prompted Obducat to list their shares on the OTC market as an ADR. While there are plenty of other companies in this space that show promise, many Nanlyze readers continue to express interest in this company.
The first thing to look at when sizing up a company’s current health should be the financials. Unfortunately Obducat stopped publishing their financials in English around 2009. This means that unless you can read Swedish you won’t be able to assess what’s going on under the hood. However, using Google Translate it’s possible to get a glimpse into what’s been going on at Obducat by looking at their latest 2012 annual report.
The first line above represents revenue. Assuming this is represented in 1000’s SEK then this translates to about 5 million USD. It is troubling to see a trend of decreasing revenue since 2008 with 2012 revenues less than half of 2008 revenues. The second line represents cost of goods sold (COGS). While it is good to see this trend decreasing, we would expect to see COGS fall alongside revenues. We do see COGS decrease as a percentage of revenues from 42% in 2008 to 27% in 2012. The fourth line is operating expenses which are seen to be fluctuating dramatically over the past five years. The last line shows profit for the year. After four years of heavy losses Obducat shows a profit in 2012.
For American investors Obducat is difficult to invest in given the lack of liquiduity as an ADR and the fact most of the company’s content is in Swedish. The trend of descreasing revenues is not promising. Looking closer to home, ASML is the world’s leading provider of lithography systems for the semiconductor industry.
If you invested your money in ASML five years ago you would have realized an almost 200% return on your investment. In a future post we will look at another promising private company, Molecular Imprints, that is backed by Harris and Harris Group that currently selling nanoimprint lithography systems.
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