Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
You have to love small-cap stocks, they move 20% on absolutely nothing, happy adding shares at this level ahead of the anticipated trading update.
...interesting to see the shares trading above their 200dMA for the first time in over a year, along with other builders. Positive momentum on the back of less dire UK economic data suggests we could be in for a significant relief rally in this market segment, especially given how depressed valuations have become in anticipation of downturn and recession in the UK. Hedge funds in particular have had a field day being short here, however, the risk/reward now looks largely skewed to the upside. I'm adding a few more here on the recent chart break-out. GLA.
https://www.reuters.com/markets/us/tax-loss-selling-battered-us-stocks-could-spur-january-snap-back-2022-12-08/
I think the year-end tax selling in the US had a lot to do with the overly depressed price in the ADRs, I'm encouraged by the bounce back or snap back price action and wouldn't be surprised to see the ADRs recover back to the $4-$5 range in pretty short order. Absolutely no reason for the shares to be so depressed, especially given the hugely positive data coming from their real world evidence studies and the anticipation of the FDA de-novo marketing authorisation, as you say SB. I have been buying steadily for months as calling the bottom in these things is nay on impossible. Think this is a major comeback stock for 2023!
Good spot SB, I noted the same from the AGM results and my read is that these may be votes of frustration at the apparent inaction and follow-through from the cornerstone investors. With any luck, they will take note of the dissent among some shareholders and work a little more proactively with the company to take on the market critics. I have no doubt they will be there to help with any material funding needs going forwards, however, it would be encouraging to us to see them and their peers taking a more active role in the discounted valuation the shares are trading at vs the opportunity ahead! As for the giving back of the recent gains, no news is usually bad news in small-cap world and the daily volumes have been small, to say the least. I look forward to life beyond FDA marketing authorisation, hopefully, this arrives in Q1 (as indicated) and then on to ramping sales and testing across the many health systems they're now plugged into. The shares should arguably be back in the £2-£3 range but this may well require some market leadership and commitment from Mount Sinai, C.Mills and friends. I still like the risk/reward and as a patient investor, I'm happy to own the shares here and will look to add more in the new year when the news flow picks up.
September test number was 527, more than double that of last year and accelerating now that the VA and Medicare are online. Think we’re in for a period of rapid growth and accelerating adoption, likely assisted by repeat testing from the early adopters to help monitor the effects of prescribed medication, etc. Shares should easily be way above IPO price of 121p back in 2018, plenty of upside surprise in the pipe, not least final FDA approval.
Think there’s very little chance of that, EKF arguably has its best days ahead, looking forward to the fermentation/enzyme business kicking off soon, which should help drive the shares on to fresh/new highs, patience required but the pay-off opportunity is very much there!
fwiw, think it makes sense for covid winners (post covid losers) like SourceBio to go private, just look at Abingdon Health and Novacyt. Renalytix has everything to play for and a very bright future ahead, capital markets with half an ounce of optimism would do well to get on board, but I understand the disappointment. Who could have predicted this level of collapse in confidence across markets and anything future growth focussed? Baby and bathwater spring to mind, however, patience is of course needed, something the market has forgotten how to utilise. Ho hum. I have added a little more here, am in for the long haul.
Well said SB, completely agree and no surprise the shares have re-traced 50% of the rally from the lows, let's see if they can form a base around here to build a recovery. I would like to see some of the UK holders averaging down and indeed some new good-sized buyers, but they may want to see the FDA sign off first, even though the Medicare news in any normal market would see the shares moving in a very positive direction. I have added 10k shares between yesterday and today, got easily hit on the bid-side so all purchases shown as sales, happy to add here and watch for further developments.
think the update is much more significant than the market is appreciating, the pathway to significant revenue just got significantly wider and the fact they already have their application for Local Determination Coverage (LCD) in for Medicare is more than encouraging. This will likely attract institutional investors who can appreciate the deeply discounted valuation vs the opportunity ahead, the company will obviously need to raise further capital in order to ramp the business and that in itself will appeal to deeper pockets, as the risk/return profile is very attractive down here. The shares should arguably be well above their IPO price of 121p from 2018, the market just needs to regain some perspective here and appreciate what's been built, achieved and in such a short timeframe, rather than focussing solely on the cash-burn. I have been adding more into the retrenchment this morning, looks great value for a mid to long term hold.
Haven't seen the actual note yet, but looks like Investec upgraded their view on Renalytix this morning and upped their price target to 302p. I think on the back of the extensive results update this morning this makes complete sense and the shares should arguably be trading well above their IPO price of 121p back in 2018. I look forward to the earnings call this afternoon and in the meantime, I have added a few more here.
Yes that's my read on it too, so the market opportunity should be a multiple of the 16k professionals. On top of this Trellus has the potential to open up a significant portion of the corporate employee health plan market, I very much like the point they made about the productivity drop off with sufferers of IBS, UC, IBD, etc and how this could be improved with Trellus's resilience health plan offering. However, they first need the commercial validation and success from the announced plans and channels with Mount Sinai and GI onDEMAND. Once they have this I'm sure Mount Sinai will be a significant door opener to other plans. I think Trellus has huge potential but the market won't see it until the numbers start rolling in, I get that. Happy to hold for the long term and have added more this week.
So the company announces four major channels, through which they’re now starting to roll-out and commercialise their resilience health service, and the market responds like this. The market really has lost its mind! Well let’s see where the shares are once the numbers start rolling in, I for one am adding to my position today, the Trellus Health team are on a roll!
Hard not to agree with the sentiment here, it has been very painful to watch the slow train wreck. I try to rationalise that the market is selling anything and everything that's in the early stages and pre-revenue, this is of course 180 degree turn from where the market was back in 2020/21 but that's just how it is, the list of casualties in the healthcare space is long and distinguished.
I have been adding recently as think the news flow will soon turn for the positive and the market seems to have forgotten just how far Renalytix has come since it listed back in 2018. They're now in actual roll-out mode, generating revenues, granted not as much as was expected at this stage, but KidneyIntelX is being taken up and with each test, another convert is added to the system, soon the network effect will kick in. They may also soon get the final clearance from the FDA, not that it's needed, but a nice to have, and this should have a very positive effect on changing the current negative sentiment. As would any news concerning deployment contracts with large Pharma companies, all pie in the sky, until it isn't.
I also notice that Polar Capital and Chelverton Asset Management have been buying recently, ok not huge but 500k shares is a good start and adds to Polar's longer term positions, whereas Chelverton have been building their position since March this year.
Looks like a Buy to me, or in my case an average down and pep up the position for the recovery.
Good volume going through today, think this will look like a very silly price this time next year when Verici are generating positive momentum with their revenues. Market has lost its mind about what's important and what true opportunity looks like. Company is ahead of plan on milestones and should start to see early revenue flows heading into next year, that's really quite soon.
Clarifying EKF's USD exposure, from slide 5 of their interim results presentation: the US makes up just over 45% of sales revenues, with Germany close to 40%, UK roughly 10% and Russia under 5%. The full presentation is on the company website, well worth the read.
Thanks SB, yes that's a good point about USD revenues, given the ongoing weakness in GBP this could add a few more % points to the bottom line in H2, unreal weakness in GBP, woeful.
Thanks SB. I'm optimistic on H2 revenues as we're beginning to see the revenue flows from the investment in Life Sciences/Enzyme business flow through and gain momentum, alongside wider growth across the business. I wouldn't be surprised to see H2 revs closer to £35m, in which case the mark-down on the back of FY results back in March should be unwound and the shares should frankly be at least around 50p in today's money. EKF has no debt, £19m of cash (after all the recent investment, ADL, Fermentation, etc), 3% dividend, FCF Yield of >5% and is in the process of returning to growth after managing the wind-down of the covid related business; not to mention they're doing a great job managing the current spike in inflation. I see this as a must have business and if the market doesn't afford it the appropriate multiples I'm sure the PE houses will. What's not to like?
Fantastic update and ongoing clinical validation results, in any normal market the shares would be up significantly, onwards to commercial roll-out and then let's see how far off the market is!
Look forward to the presentation this afternoon, Sara B is a class act.