Which Emerging Company does MM prefer SLX, RDY or SRG?

Hi,

These are extremely different businesses making ranking very difficult but “here goes” in order of preference bearing in mind we hold all 3 in our Emerging Companies Portfolio:

1. ReadyTech (RDY) $2.89- software based educators RDY has now fallen over 30% from its spike high in November following a $514mn takeover bid by Pacific Partners at $4.50. The stock has been under pressure following its 1H23 result but we believe it can deliver on its longer-term targets making the current weakness a great value opportunity.
2. SRG Global (SRG) 73c – construction services company SRG’s FY22 results and FY23 outlook provide strong evidence that SRG is delivering on its strategy and is a lower risk investment when compared to many construction and mining service peers given the recurring nature of a large portion of its revenue. We believe the stocks cheap trading on an Est 10.9x valuation for FY23 while the stock pays an attractive steady 5.5% yield.
3. Silex Systems (SLX) $3.81- A slightly different take on the uranium story, Silex is developing a laser-enriched uranium technology in conjunction with sector giant Cameco. The demonstration plant in Kentucky is expected to be up and running in around 12 months’ time. The company is well funded following a capital raise earlier in the year while the US Government is also likely to support any capital requirements as part of the inflation reduction act – note the supply of High Assay Low Enriched Uranium (HALEU), which the next generation of nuclear reactors require, is heavily reliant on Russia which throws a curve ball into the equation at least short-term.

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ReadyTech Holdings (RDY)

LAST UPDATED 18/05/2023 16:35

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ReadyTech Holdings (RDY)

LAST UPDATED 18/05/2023 16:35