SHARE PUNT OF THE WEEK

PRICE: 12.75p

WHAT IS IT?

Iofina partners with oil and gas companies in North America and extracts iodine from the waste brine water found in oil fields. This may sound boring, but iodine is a versatile chemical used in products such as LCD displays, cosmetics, and pharmaceuticals. It is even used to treat radiation poisoning.

WHAT’S THE LATEST?

The company has exceeded firsthalf production guidance, having produced 235.5 metric tonnes of iodine from its plants in Oklahoma, and expects 2018 production to increase by 40pc.

WHO BACKS IT?

It is backed by Stena Investments, which holds a stake in the firm of almost 8pc. In June 2016, Stena provided Iofina with a £7.4m loan facility to give it breathing room while its board implemented growth plans.

WHY SHOULD YOU INVEST?

The price for large volumes of iodine has gone up by 25pc since the beginning of the year, to £18 per kg, and is set to go even higher. A fall in supply from Chile and strengthening demand for both iodine and its by-products is helping to drive prices up. If the outlook for supply and demand continues to tighten, Iofina believes prices could reach £19 per kg next year.

...AND WHY YOU SHOULDN’T

As with all commodity stocks, it is difficult to predict what will happen to the price with a high degree of certainty. Before you invest, think about whether you would be willing to ride out some potential volatility on the way to making a profit.