Must. Stop. Buying. Zirax.

Zirax
So over the weekend I decided that it was silly to sit on the sidelines while Zirax was selling at 12p a share, when I think it will be between 50% and 100% higher in 2 years, with really very little risk. I was hoping I could get some at 11p, but decided if it shot up I'd kick myself for missing out.

Logged on at 8:15am, got a quote for 11.475p. Bargain - I'd been happy to pay 12. Increased the size of my holding by 56% (50% by purchase price).

I noticed Yahoo quoting a bid/ask spread of 10/11 at about 10am, so logged onto my sharedealing account again to take a look. Got a quote for 10.83p, and bought my final tranch of shares. I'm now entirely happy with the number I hold, and won't be buying more unless there is another significant drop (say, to 9p).

Zirax is now 14.6% of my portfolio, my second-biggest holding after RBS:

RBS.L 22.8%
ZRX.L: 14.6%
IAPD.L: 8.9%
IDVY.L: 8.8%
GNK.L: 8.2%
TW.L: 7.5%
MXM.L: 7.1%
LTAM.L: 4.9%
EDD.L: 4.6%
IEER.L: 4.6%
IFFF.L: 4.3%
BDI.L: 3.7%

It's the inaugural meeting of my investment club on Monday 19th. I plan to present on Zirax - it will be interesting to get some other opinions.

Metal Tech
This is an extension to my rambling post the other day about Metal Tech. I'm writing it as I read the annual report.

Revenue up 15%.

Net loss of £375k - £3.8m writedown of Uzmetal, £1.25m writeoff of accidental Calcium Molybdate inventory. R&D up to £1m.

Cash down to £3m (from £8m)

£26m shareholder equity (not counting £1.5m minority interests)

Operating profit down from £8.5m to £6.2m.

"Minority interest" seems to be taking £600k even though the company made a loss. I think that suggests Metal-Tech owns > 50% of a subsidiary, and has fully integrated their income onto their books, but has to pay a percentage of the profit out the other shareholders. All a bit confusing. Why that's on the balance sheet as only £1.5m I don't know...

Woah, no wonder the accounts are confusing... I'm just reading the variety of subsidiaries and joint ventures that Metal-Tech is involved in. It might all be completely legitimate, but it's too confusing for me to understand, and therefore I'd be worried about investing.

So let's have a stab at how much profit it can make... add back in the £5m on writedowns, a bit more for the Mongolia plant coming fully on-stream, let's say £6m profit. "Minority interests" might take £1m of that, so the shareholder would get £5m. On a market cap of £25m, that's a P/E ratio of 5. So it's cheap at least... but I'm not sure that compensates for how accident-prone it is.