MIDAS SHARE TIPS UPDATE: Chipmaker EnSilica poised for growth on smart ring trend
Star appeal: Actress Jennifer Aniston is a fan of smart rings
Remember when the BlackBerry seemed like a small miracle? Today, the fruit of choice is Apple and devices include endless variations of desktops, laptops, phones and watches.
Now there’s a new kid on the block: the smart ring, which allows users to pay for goods and monitor their health minute by minute.
Smart rings are all the rage in certain American circles and are quickly gaining traction here, particularly among those with conditions like high blood pressure, heart arrhythmia, or simply the fear of missing out on the latest gadget.
Nowadays, these rings tend to be a little clunky, a little basic, and tend to run out of power at inopportune times.
But the specialized chip maker EnSilica is developing components that will make these devices slimmer and more effective, allowing customers to check fertility rates, blood oxygen levels and an expanding range of bodily functions.
EnSilica joined the London Stock Exchange’s AIM junior market in May 2022 at 50 pence. Midas recommended the shares six months later at 49p and today they are at 69p.
The rise is encouraging, but the shares nearly doubled that level in January of this year, and have since fallen steadily on broader market concerns, even as Chairman Mark Hodgkins and Chief Executive Ian Lankshear have unveiled new, higher contracts. increasingly solid sales and prospects. .
EnSilica designs custom chips, used in four key sectors: automotive, general industry, satellite communications and healthcare.
Automakers use their chips to make vehicles ride more smoothly on the road, manufacturers install them in factory robots, health companies deploy them for diabetic patches.
Lankshear is also developing a chip to make internet connections more resilient across the country, funded by the UK Space Agency.
Last week’s figures revealed a 34 per cent rise in turnover to £20.5m and a 50 per cent rise in underlying profits to £1.6m.
Brokers expect continued strong growth into 2024 and beyond, with the business set to secure contracts worth more than £200m in the coming years.
Midas Verdict: Small tech companies can be accident-prone, but EnSilica appears to be more adept than most. Hodgkins, a former accountant, runs a tight business and Lankshear is a technology expert who co-founded the company more than 20 years ago.
Investors who bought at 49p have seen a 40 per cent gain in less than a year but, at 69p, the stock has fallen from previous highs due to overall market malaise and should recover.
Nervous shareholders may choose to sell now. Others should hold onto these stocks, while new investors could also find value at current levels.
Traded in: AIM Heart: PER SE Contact: ensilica.com or 0118 321 7310