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Friday, July 13, 2012

Friday's Report on UK-Analyst is from James Faulkner of WatsHot.com

Transense Technologies - Pumping up the Pressure

by James Faulkner of WatsHot.com

On specialist small cap website Watshot.com, editor James Faulkner provides two hot new recommendations each month, regular updates on his share tips, investment ideas, rumours, book reviews and his daily thoughts and insights into the markets. James will be publishing TWO hot new tips in the coming weeks on two stocks he believes have significant growth potential. To access those tips and much much more...

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Here is an overview of AIM listed Transense Technologies, one of James' previous investment ideas...

Transense Technologies (TRT) is a tyre sensor specialist that has been on a roll of late. In June it said that its iTrack Tyre Temperature and Pressure Monitoring System for mining and off-the-road vehicles had successfully completed field trials with one of the world's largest mining companies and is now an approved product for deployment in the southern African region. The unnamed customer is initially focussing on fitting the iTrack system to its 1,300 haul trucks while also considering fitting to its ancillary mine vehicles, more than doubling the potential number of vehicles requiring the system. The company also added: “Senior representatives of the Customer from other countries were also present at this meeting and there will be further opportunities for the company to pursue in additional territories and sites”.

According to broker Hybridian, Transense would only need to capture "a very small percentage of business" from this mining customer to beat its forecasts for 2012 and 2013. The broker’s model assumes that the system is priced at a one-off fee in excess of £10k per truck, plus £375 per sensor required on every tyre on the truck. It also assumes that on average each truck has six tyres and that these tyres last for one year. On this basis, 1,300 trucks would represent £13 million of one-off revenues and £3 million annual consumable revenues. The company would only need to install the system on 125 trucks to beat Hybridian’s revenue forecasts for 2012 and 2013, and it is clear that upside above 1,300 trucks is a distinct possibility. Longer term, Hybridian believes the market opportunity for the mining industry alone to be worth £280 million, with annual consumable revenue worth £55 million.



Risk Warning: The tips given here are of necessity, general. They cannot relate to the individual circumstances of investors. Anyone considering following the recommendations contained here should seek independent advice. The value of investments can go down as well as up. Investing in equities can lose you part or all of your capital. Smaller company shares can be relatively illiquid and thus hard to trade. And that makes such investments more of a high risk than larger company shares. UK-Analyst.com is owned by t1ps.com Ltd which is authorised and regulated by the Financial Services Authority and can be contacted at 3rd Floor, 3 London Wall Buildings, London EC2M 5SY.

Meanwhile, Transense has also been busy developing its 'iProbe' multi-function tyre inspection tool, which it describes as the "Swiss Army Knife" of tyre inspection and audit tools. The iProbe provides wireless measurement of tread depth, tyre temperature and tyre pressure combined with integrated RFID (Radio Frequency Identification) tag and TPMS (Temperature Pressure Monitoring System) sensor reading capabilities. The first production run of probes has been fully sold to customers including several fleet providers and the world's three largest tyre manufacturers. Bridgestone Brazil has now begun ordering quantities of the iProbe following product trials and the order received for Q2 2012 was said to be twice the size originally scheduled for Q2 delivery and "indicative of the gathering pace of RFID adoption within the commercial tyre industry".

However, although the tyre market represents the low hanging fruit for Transense's technology, the firm is by no means a one-trick pony. Last September saw the creation of a new subsidiary, IntelliSAW, to apply its patented surface acoustic wave (SAW) technology in the power industry. The initial focus will be on the switchgear market, where the firm's wireless monitoring system can provide power companies with accurate real-time temperature data and highlight any potential problems. Transense believes that existing solutions for switchgear monitoring have limitations such as the potential for arcing or flashover, lack of continuous monitoring or the requirement for batteries or other direct power sources in an inherently unsuitable environment. The IntelliSAW system addresses these limitations and offers a low maintenance solution that is easy to install and commission. IntelliSAW already has several distribution agreements in place covering the US, China, Taiwan and South America, with the company reporting that it was "delighted with the speed at which the IntelliSAW solution is gaining traction within the market" at the time of the interims in June. The market for this type of sensor has been estimated by NanoMarkets to be worth $900 million by 2015. Assuming the company only secures a small share of these markets, the opportunity looks huge - even without accounting for any further applications for the technology.


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UK-Analyst.com is owned by t1ps.com Ltd which is authorised and regulated by the Financial Services Authority

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