#business MIDAS SHARE TIPS: Iodine from Iofina is in demand and you can profit

#business MIDAS SHARE TIPS: Iodine from Iofina is in demand and you can profit

#enterprise MIDAS SHARE TIPS: Iodine from Iofina is in demand and you can profit

 

MIDAS SHARE TIPS: Iodine is a key ingredient to make chips more healthy, and with Iofina you have the potential for tasty earnings

Added value: Iodine produced by Iofina is in demand as an additive in salt and has many other health uses

Added worth: Iodine produced by Iofina is in demand as an additive in salt and has many different well being makes use of

Brazil, the US and the Philippines could have little in frequent. But they’re amongst dozens of nations that add a small quantity of iodine to their salt to make sure residents don’t endure from iodine deficiency. 

Iodine deficiency is the largest reason for mind injury in the world. The mineral is important for progress and growth and is particularly vital for pregnant ladies. In the UK, nevertheless, salt is not iodised. Children and adults alike are anticipated to get their justifiable share from milk and dairy merchandise, eggs and fish, however not everybody does, with scientists elevating considerations that many individuals in this nation endure from a gentle deficiency. 

Iofina is an AIM-listed enterprise based mostly in Colorado, which produces iodine and turns it into compounds bought world wide. The shares are 23.25p and ought to improve considerably over the following few years. 

The firm has perfected a means of extracting iodine from brine that is left over throughout onshore oil and gasoline manufacturing. Iofina then turns the mineral into compounds used in a spread of industries, from healthcare to vitamin to know-how. 

Inclusion in salt is important in a lot of the world, however the largest single use for iodine is as a part of particular compounds – referred to as distinction brokers – that make MRI scans clearer. Contrast brokers assist docs to detect points from tumours to coronary heart failure and their use is rising as populations age and healthcare techniques develop into extra subtle. 

Iodine compounds are included in sure statins as properly. They are added to animal feed, used in paint to cease it going mouldy, characteristic in LCD screens and play a job in quite a few industrial and chemical processes. 

Demand is robust throughout the board, provides are restricted and iodine costs have been rising, reaching document highs of $70 (£60) per kilogram in latest weeks from lows of lower than $18 a couple of years in the past. Such lows are unlikely to be repeated in the close to time period, however chief government Tom Becker has labored laborious to make sure that Iofina is one of many lowest-cost producers in the world, making the group extra resilient ought to costs fall from present ranges. 

Around two-thirds of the world’s iodine comes from the Atacama desert in Chile. There, ore is mined from beneath the bottom, damaged up into small items utilizing explosives, transported to particular services and changed into iodine by a chemical course of referred to as leaching. 

Iofina’s brine strategy is friendlier to the surroundings and inexpensive. The course of has been designed for areas the place oil and gasoline firms’ waste brine accommodates loads of iodine. Oklahoma is certainly one of these locations and Becker expects to begin work on a sixth plant later this yr, with one other one approaching board shortly afterwards. With additional vegetation on the playing cards, Becker hopes to double annual manufacturing to 1,000 tons throughout the subsequent three to 5 years. 

All the iodine that Iofina produces is utilized by its chemical division, changed into compounds and bought to companies in a spread of industries. 

The group buys in a small quantity of iodine from different producers too, and additionally makes compounds from fluorine and chlorine. These share comparable properties with iodine and imply that Iofina is not reliant on a single chemical component for all its gross sales. 

The agency spends time creating new makes use of for its uncooked supplies too, so it can broaden into recent markets, such because the fast-growing semiconductor business, which makes use of fluoromethane in the manufacturing course of.

Iofina has had a troubled previous. The group expanded too shortly a decade in the past, when the Fukushima nuclear catastrophe in Japan disrupted the iodine market and despatched costs hovering. 

They collapsed a couple of years later, leaving Iofina with massive money owed and loss-making vegetation. Today nevertheless, the corporate is worthwhile with a powerful steadiness sheet. Becker is bold however cautious too, ensuring that the agency doesn’t repeat previous errors. 

Interim figures, launched this week, needs to be encouraging and brokers anticipate a 5 per cent improve in full-year turnover to $41 million, with earnings up by 26 per cent to $6.2 million. Growth is forecast to be even stronger in 2023, with a turnover of $46million and earnings of just about $8million. 

Encouragingly too, former star fund supervisor Richard Sneller is a giant fan of Iofina. With a private stake of just about 18 per cent constructed up over the previous two years, he is now the group’s largest shareholder. 

Midas verdict: Iodine is a vital mineral and demand is rising throughout a wide range of very completely different industries. Iofina is not only a low-cost producer – it additionally turns iodine and different chemical compounds into much-needed compounds worldwide. At 23.25p, the shares are deeply undervalued. Buy. 

Traded on: AIM Ticker: IOF Contact: iofina.com or 001 859 356 8000 

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