Quantum dots have developer buzzing

By Graeme Dickson
Updated: 13:31 EDT, 13 October 2010

Technology stocks have done pretty well in the last year, particularly those involved in the semiconductor industry (look at the recent tip of IQE).

One stock that operates in this field but looks to have been left behind in the boom, but is now showing signs of an imminent uplift, is that of quantum dot developer Nanoco (NANO.L).

The company partners with major Research & Development and blue-chip industrial organisations in the development of applications incorporating semiconductor nanoparticles, otherwise known as quantum dots.

The £176 million company is the only manufacturer currently able to supply production quantities of these nanoparticles which do not use a regulated heavy metal.

Nanoco provides its partners with the platform to develop a wide variety of next-generation products, particularly in application areas such as display technology, lighting, solar cells and biological imaging.

Two months ago the company announced that it has passed a key milestone with a major non-disclosed Japanese electronics firm, receiving $600,000 (£380,000) in the process for its achievement.

The idea is that the quantum dots will give LED TVs a backlight that will reduce power consumption while improving colour performance. It has one more milestone to achieve which is due early next year which, assuming it attains the agreed stipulations, should lead to a supply and licence agreement of quantum dots. The company trades on a forecast 2012 price to earnings ratio of 25 which is about right given the exciting space it operates in.

The company is due to release its preliminary results next Monday. Given its tightly held shareholder base, it might be worth a small dabble ahead of the results in the hope that the company pleases the market.

A close below 85p will probably signal that things have not gone to plan, while a close above 115p will look pretty encouraging.

Update:

Renewable Holdings – tipped as a buy idea at 16.25p, it closed yesterday up modestly at 16.375p. The stock reached 20p at one stage after news emerged that its CEO Mike Proffitt bought 730,000 shares at 19p last week. Stick with the position.

Jubilee Platinum – tipped as a buy at 33.75p, it closed yesterday at 33p. Hold for now but if it closes below 30p, cut the position.

Bowleven – Tipped as a buy at 177.25p, the stock closed at 172.5p yesterday. Sit tight and wait for drilling developments. Also watch for 9 November for the company's preliminary results.

New British Palm Oil – Tipped as a buy at 572p, the stock closed at 640.5p. The stock remains in break-out territory. Keep the stop at 610p to ensure profits.

IQE – Tipped at 24.25p, the stock closed yesterday at 37p. Keep holding with a view that a dip towards 32p - the recent placing price - could be a possible topping-up opportunity.

Tissue Regenix – Suggested as a buy at 16p, the stock has slipped to 11.25p. The lack of news has caused the stock to slowly drift. At some stage I expect this to reverse. Sit tight despite the dip and if you have no position, this might be an opportunity to pick up stock on weakness.

Pursuit Dynamics – suggested as a buy at 223p, the stock closed yesterday at 428p - a 92 per cent gain. If the stock closes below 360p, take profits.

United Utilities – Buy idea suggested at 593p: the stock closed yesterday at 586.5p. The stock is worth holding for the six per cent dividend yield alone. The company is also looking to dispose of non-core activities that in turn will help to reduce its debt and possibly make it attractive to private equity.

Bodycote – Buy idea suggested on 28 July at 236.4p, the stock closed yesterday at 276p. Raise the stop to 254p.

The material for this report comes from Alpha Terminal. The writer does not hold any shares or derivatives in the above mentioned companies except Renewable Energy Holdings