Is Directa Plus THE Graphene Stock to Own?
We’ve covered most of the graphene companies out there in past articles. As for the handful of publicly traded “graphene stocks”, things haven’t shown much promise yet for investors. The first graphene stock to debut, Applied Graphene Materials (LON:AGM), keeps providing customer samples but hasn’t shown any revenues since their IPO in November of 2013 after which they’ve lost over -60% of their share price value. The only other graphene stock we know of, Haydale Graphene Industries (LON:HAYD), is trading at around the same price they were when their IPO debuted in April 2014. The most recent HAYD corporate presentation talks about the size of the opportunity, but as with most graphene companies, we’re left asking, where’s the money?
Just last week we saw an IPO of another graphene stock with actual revenues and products that are using their graphene. We’ve covered this company before in an article titled “Graphene Bike Wheels from Directa Plus” in which we were pleasantly surprised to see a graphene producer which actually had a commercial product that used their materials. Let’s take a closer look at Directa Plus.
Founded in 2005, Italian company Directs Plus (LON:DCTA) offers a wide range of graphene-based products that are either ready-to-use or custom-blended to meet specific technical requirements. Their IPO took place last week on AIM (a sub-market of the London Stock Exchange) where they offered up 39% of their shares for proceeds that amounted to around $18.64 million USD. Since the IPO, shares of DCTA have risen over +86% giving Directa Plus a current market cap of around $125 million USD.
Directa Plus has a 30 ton per year production capability for their graphene, and is looking to use their recent capital injection to expand capacity even more. They list their direct competitors in the U.S. as Angstron Materials, Vorbeck Materials, and XG Sciences, all of which are private companies at the moment. They also list the two publicly traded UK graphene stocks, Haydale and Applied Graphene Materials (AGM), as main competitors as well. Here’s a closer look at the Directa Plus graphene production process and target applications:
Directa Plus is not just shipping samples, they’re actually selling the graphene they produce for use in real products. In addition to the bicycle wheels we wrote about before, the Company has also sold three mobile decontamination units which use the Directa Plus’ Grafysorber® product for tackling environmental emergencies with contaminated water. They have also collaborated with Colmar, a leading sportswear and outdoor brand, on a sportswear collection made out of textiles that contain G+ graphene.
The clothing line doesn’t just look cool, it also promises reduced friction against air and water along with helping to regulate heat in various temperatures. In total, they have supplied more than 2.2 tons of graphene-based products in the last 18 months all under the G+ brand which has helped them generate revenues.
To date, Directa Plus has signed over 350 non-disclosure agreements and over 50% of these are currently testing Directa Plus’ graphene materials in various product applications. They are currently supplying 6 customers under existing commercial agreements. Revenues for 2015 came in at $1.58 million USD up from just $115,718 in 2014 but were accompanied by heavy losses. Here’s a look at their financials for the past 3 years in Euros (1 EUR = 1.14 USD):
If Directa Plus can manage to grow their revenues quick enough, they may be able to achieve profitability before they burn through the $21.6 million USD in cash they have in the bank following the IPO. Directa Plus (LON:DCTA) may be THE graphene stock to own if you want exposure to this space mainly because the other two publicly traded graphene companies that we mentioned don’t seem to be making the type of progress that this company is. Then again you can also buy positions in all three and reduce your overall risk through diversification. Since our U.S. investor base might be interested in knowing how you can buy shares in stocks on foreign exchanges, we’ve hooked you up with this article that tells you how.
Here at Nanalyze, we hold the lion's share of our investing dollars in a portfolio of 30 dividend growth stocks. Find out which ones in the Quantigence report freely available to Nanalyze subscribers.