Investment View: Three gambles - but were they winning bets?

Probability's platform gives it a leg-up on most of the competition in mobile gaming

Before last year's Cheltenham Festival this column offered up three gambles from the stock market; smaller companies I felt would be winners for investors. In the darker reaches of the London Stock Exchange, I uncovered bright lights, cannabis treatments and (appropriately enough) bets on mobiles.

But were they winning bets? Well, of the three, there has been one superstar, one has been a less than stellar performer but may soon come good, and one cannot, sadly, be described as anything other than a relative dud.

Probability, tipped at 74p, is the less-than-stellar performer (at least where its shares are concerned) that I think will come good. The only pure-play mobile phone gambling specialist on the market, it has been interesting to watch.

Over the last year or so the business has changed substantially, moving into providing product for other, larger gambling firms. That makes sense. You don't have to spend gazillions on marketing to win this sort of business in the way you most certainly do when you sell direct to consumers.

It is a testament to the quality of the Probability offering that the likes of William Hill, Paddy Power, and a number of other big names are among clients or partners. In the meantime, the company turned its first quarterly profit (in the most recent quarter), successfully raised £2.6m from investors in January, and looks set to bounce back strongly this year.

It wasn't long ago that the aforementioned William Hill nearly bought the group, the deal floundering on account of a third-party relationship which had power of veto. Now, given the way the business has changed, you'd think that it would be more likely for a gambling technology group to take a pop at Probability. In the meantime it has moved into Italy (profitably) and is hunting for partners in the US, where the laws prohibiting remote gaming are easing. Moving across the Atlantic would be a major coup.

Mobile will increasingly become the favoured venue for online gaming. Probability's platform gives it a leg-up on most of the competition, and one day these shares – now 62.5p – are going to take off, if someone doesn't gobble up the company in the interim.

Next up are those lights, in the form of Nanoco, which has been a star, at least when it comes to this column's tipping prowess. The shares were about 70p when they were featured in the last "gambles" column. They've more than doubled since, at one point hitting 200p, although they're trading at 161.75p now. The big news, and the reason for the froth in the shares, was a licensing deal the company signed with Dow Chemical, which will manufacture and sell Nanoco's cadmium-free quantum dots.

I've been waiting for something like this for some time, because it will be a game changer for the company. Quantum dots have huge potential. They are minute particles whose uses include the lighting of visual displays and lighting generally. Being free of cadmium, a nasty heavy metal pollutant, is their chief virtue, and they could also have biomedical applications.

Dow's backing is a big win. So, time to take profits? If you were in at the beginning (and this column has been saying buy for years) you could do worse. But Canaccord, the broker, thinks the shares could go as high as 275p. I'd stick with it. They're still worth buying.

The final member of the trio of tips is GW Pharmaceuticals, which has so far been the real disappointment. The shares were just under £1 when we looked at them. They've since been gradually declining, and are now at 60.75p.

GW is a pharmaceutical company which makes use of the cannabis plant. It grows the stuff, quite legally, somewhere in southern England. Its Sativex drug is intended to treat some of the effects of multiple sclerosis.

The problem the company has had is getting paid for it, especially in Germany, Europe's biggest pharma market, but also elsewhere on the continent. As a result, the shares have been disappointing.

There are still reasons for optimism. The company has taken a listing on Nasdaq, which should provide visibility and attract investors from the world's biggest pharma market. And there is promise that Sativex may find an unexpected use in the treatment of cancer pain.

The shares have hinted at a revival recently, although they are not out of the woods yet, but if the phase three US clinical trials come good, watch them take off.

GW has so far been a disappointment but the potential is still there. It has received a US patent for its spray drug delivery device, while Britain has eased some restrictions on prescribing Sativex. So all is not lost.

If you'd backed all three, you would still be showing a profit. That's largely thanks to Nanoco. Next time around I would hope that both GW and Probability have picked up the slack. Fundamentally, despite GW's travails, I still like all three, and think they will pay off in the medium term, if not before.

Alan Bennett has criticised the “repellent” reality shows which dominate our screens
tvBut he does like Stewart Lee
Life and Style
The Google Doodle celebrating the start of the first day of autumn, 2014.
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
David Moyes and Louis van Gaal
Life and Style
Vote with your wallet: the app can help shoppers feel more informed about items on sale
lifeNew app reveals political leanings of food companies
Former Governor of Alaska Sarah Palin, left, with her daughter, Bristol
newsShe's 'proud' of eldest daughter, who 'punched host in the face'
New Zealand fly-half Aaron Cruden pictured in The Zookeeper's Son on a late-night drinking session
Arts and Entertainment
Salmond told a Scottish television chat show in 2001that he would also sit in front of a mirror and say things like,
tvCelebrity Trekkies from Alex Salmond to Barack Obama
Life and Style
Carol O'Brien, whose son Rob suffered many years of depression
healthOne mother's story of how London charity Maytree helped her son with his depression
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
The cover of Dark Side of the Moon
musicCan 'The Endless River' carry on the tradition? See for yourself
Life and Style
food + drink
Rob Merrick's Lobby Journalists were playing Ed Balls' Labour Party MPs. The match is an annual event which takes place ahead of the opening of the party conference
newsRob Merrick insistes 'Ed will be hurting much more than me'
A cabin crew member photographed the devastation after one flight
A new app has been launched that enables people to have a cuddle from a stranger
voicesMaybe the new app will make it more normal to reach out to strangers
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Quantitative Risk Manager

Up to £80000: Saxton Leigh: My client, a large commodities broker, is looking ...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits