MENU

Structural Monitoring Systems shares surge 36%

Shares in Structural Monitoring Systems (ASX: SMN) have jumped 36% higher in morning trade to 30 cents after the micro-cap raised $375,000 through a private placement of 2,343,750 shares at 16 cents.

The placement was granted to prominent New York-based hedge fund Drake Private Investments, a long term strategic supporter of SMS and the Company’s largest shareholder, and professional investors.

The company noted that with the significant reduction achieved in its fixed monthly overhead in recent months, and given current cash on hand and anticipated order activity, it expects the funds raised will fully support the Company’s operations well into 2014.

Structural Monitoring Systems’ vision is to produce remote crack detection sensor and instrument products that will radically reduce the cost of maintenance and vehicle or plant down-time associated with performing safety critical structural integrity NDT inspections.

For the year ended June 2013, the company only generated revenue of $144,000, and as at the end of September its cash balances were down to $176,000.

At the end of October, SMS announced a partnership with one of the Company’s long-standing commercial partners, Delta Air Lines, Inc. (“Delta”), at the time the company saying…

“It is envisaged that this Programme, with installation of CVM (TM) technology onto a number of Delta’s 737-NG aircraft, will ‘pave the path’ to mainstream use of the technology in the global commercial aviation sector.”

Blue sky potential, but with risks to match

This was the start of a run in the shares that has seen them soar from 4.6 cents to as high as 30 cents, a 552% gain.

The company is now capitalised at a lofty $26 million. The stock may be hot now, and the company may have plenty of potential, but as with any blue sky stock, there is also the potential for star-struck investors to lose all their cash. Buyer beware.

Blue Sky stocks don't pay the bills

If Structural Monitoring Systems is a little too risky for your portfolio, check out our #1 dividend-paying stock. Discover The Motley Fool's favourite income idea for 2013-2014 in our, FREE research report, including a full investment analysis! Simply click here for your FREE copy of "The Motley Fool's Top Dividend Stock for 2013-2014."

The 5 mining stocks we’re recommending in 2019…

For decades, Australian mining companies have minted money for individual investors like you and me. But if you believe the pundits and talking heads on TV, those days are long gone. Finito! Behind us forever…

We say nothing could be further from the truth. To earn the really massive returns, you’ve got to fish where others aren’t fishing—and the mining sector could be primed for a resurgence. That’s why top Motley Fool analysts just revealed their exciting new research on 5 ASX miners they believe could help you profit in 2019 and beyond…

Including:

The best way we see to play the global zinc shortage… Our #1 favourite large-cap miner (hint: it’s not BHP)… one early-stage gold miner we think could hit the motherlode… Plus two more surprising companies you probably haven’t heard of yet!

For free access to our brand-new research, simply click here or the link below. But be warned, this research is available free for a limited time only, and we reserve the right to withdraw it at any time.

Click here for your FREE report!