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Solid update today. Regardless of Covid related supplier delays, the news that graft trial early results are very positive and that they see a much broader market for patches such that a separate FDA application is now planned, is really encouraging. Plenty can be read between the lines there.
Good to see financing in place officially as well as acquisition of H2Green via the cheap option. Now time for the company to get down to business and get the deal done with SGN and whatever else they have lined up for the coming year. I’m looking forward to seeing what develops and backed it up with another decent top up to my holding here at 23p yesterday.
I would have thought the RF Semis and mmWave chips that CML designs would be in huge demand given there is a major problem in the chip supply chain. There should be big demand for their designs but will CML be finding difficulty in sourcing the raw materials they need themselves? I don’t know but my feeling is that CML should be cashing in from this supply chain crisis further downstream.
There is a general meeting next Thursday to vote through the 50p capital return so I would hope to hear an update on trading at the same time. There was one the same week last year.
The sale of Hyperstone to Swissbit has now completed for $49M (£36M) cash. Probably another £7M-£9M in bank already? Freehold land valued years ago at £15M, probably worth way more now? Yet the market cap of CML is £63M, therefore probably below current tangible net asset value.
Here is what the company said two months ago upon announcing the sale of Hyperstone:
"The Disposal [of Hyperstone] reflects a strategic decision made by the Board to refocus the Group exclusively on the global Communications market. The Board believes the communications sector represents a large and high growth market opportunity for CML, which has been significantly enhanced through the acquisition of PRFI Limited in March 2020. The Disposal further enables CML to direct its efforts, including research and development spend, on capturing the exciting growth opportunities within the wireless communication markets, leveraging its standing as a key supplier to many of the world's Tier 1 equipment manufacturers...............The proceeds from the Disposal will provide the Group with the financial flexibility to maximise its future growth potential."
How can Mr Market effectively attribute no value to this established and, according to CML's directors, potentially high growth business? The market is giving stratospheric values to loss making start-ups yet nothing to this business that continues to generate profits, cash and dividends, and is backed by tangible assets. Once the recent bumps in the road caused to CML by Covid and the US/China trade spat are behind them, CML's share price must surely re-rate significantly? I am betting on it and have bought a good pile of them over the last two months.
From what I can gather, Medibrane is a private Israeli company but it has been twice invested in by a VC company for a minority interest. The direct investment is by another Israeli company called STI Laser which is involved in lasering of metal parts of medical devices. Seems to have business worldwide. STI Laser itself was last year acquired by Resonetics Inc, a US company in the medical devices space. Resonetics, in turn, was acquired in 2017 by Regatta Medical, an investor in medical companies set up in 2017 as a partnership between Robert Hance and GTCR which is an investor in various sectors.
The CEO (Robert Hance) of Regatta Medical is a veteran in cardiovascular areas, who spent many years at Abbott but also a short spell at the FDA.
Regatta/Resonetics seems to have a wide range of investments and potential areas of business being sought by them. Perhaps Medibrane can leverage its relatively new network to widen interest in the benefits and uses of Elasteon? The RNS CEO comment seemed to envisage such an aim.
I get the impression Israel is a leading centre in medical developments and I am not certain if Aortech have done deals there before rather than the US.
Excellent update out. Plenty for the market to absorb. Good to see:
- well managed cash burn, demonstrating the value of the established licence income stream
- new key employee supported by government grant
- establishment of two new clean rooms for trial manufacturing of grafts and patches
- industry advances and recognition in polymer heart valve development which is Aortech’s ultimate holy grail
The market hasn’t a clue about the potential value underlying this company!
Heavy activity this AM. Up 21%.
Miton have been selling down recently so maybe that last flurry of 50k’s was them clearing out? MM’s busy on the bid since then.
Try these:
- Stupidly oversold, RSI under 10!!
- Final results and update expected mid-July, so one or two buying ahead of that after a spell of barely no trades in the stock for a month.
- Possibly expect updated research from the new broker, Shore Capital, who took over Stockdale Securities recently?
- Huge upside potential remains in place and the market has given the company zero credit given that, to date, there has been no change to expectations to timelines. Last update in May contained plenty of positives and indications the company is transitioning to the manufacturing and testing stages soon.
Any other views?
Share price into double figures now. It’s not often such a gift presents itself as this one did in the 5p area in late April and again in the first hour after the interims at 6p on 13th May....
The potential here is good and I don’t think people have given enough weight to the recent announcement that OfQual now offer the first “Teaching Online” qualification provided by WEY. That is official Government recognition of WEY’s qualities and potentially a new source of income - teaching the teachers. Online is not going away!
Good to see Tony Knowles adding a further 83k shares @9p to the 133k he bought two weeks ago @ 7.5p.
“InterHigh has helped to develop a new accredited qualification for teaching online.
The UK Government exam board regulator, Ofqual, has approved the new qualification accredited by the Awards for Training and Higher Education (ATHE) awarding body.
Available on the Ofqual register, the new qualification is designed to meet the increasing demand for alternative approaches to learning.”
https://interhigh.co.uk/new-online-teaching-qualification/
There is certainly one less major stale bull as several million were sold at 5p over the previous two weeks. I understand that it was a single institution so we might see an RNS at some point. It’s why I don’t want to entrust my money with small cap funds because they so often have to sell big at the wrong times due to their own liquidity issues.
Give it time, as investors slowly twig what potential is here and that the past problems, including sad death of CEO D Massie, are sorted out. It’s all about the online schools growing in UK now. Can they get it right? If so, it looks good.
Agreed cottoner, once Cantors came off the ask this morning at 5.25p, the hare was running.
Anyone left in this share? Given the recent move up from stupidly low levels, I am surprised no holders are posting their thoughts.
House Broker updated last week following the industry news that the US FDA has granted an IDE ("investigative device exemption") to a US based company for early trials on a polymer heart valve. This gives validation to AOR's polymer valve and triggers a slow realization to the heart valve majors that their industry is changing from the old animal tissue world that they have gorged on for the last few decades.
Could be a matter of time before the companies with these new developments get snapped up by competing majors as the R&D progresses.
Broker summary was:
"We view positively the news earlier this week that the FDA has granted Foldax Inc. investigative device exemption (IDE) approval for an Early Feasibility Study of its Tria surgical aortic heart valve to treat aortic valve disease. This is because it sets the path to commerciality for AorTech with its polymeric heart valve, which uses its patented Elast-Eon polymer. With milestones set to be achieved in both the heart valve and textiles projects in 2019 and 2020, we expect to see a significant increase in news flow. We retain our 400p TP and Buy rating."
Hope you are still holding Allie123..! 43.4p to mid-price 60p in a month and a half is not too shabby. The big test is not to follow the sellers who bank short term profits (and often losses) as they have no patience. This is a share for the long term with massive upside potential and I am holding on for that.
The house broker has 400p pencilled in (possibly for this year) for starters and so far the strategy of the company is on track with both the RUA and VFT partnerships working well.
Worth digging around here as there is a lot of data to absorb. It's a long term project. Nothing is guaranteed obviously.
Encouraging update indeed plus another US patent thrown in for good measure!Bill Brown is undoubtedly excited about the future here.
Should be a good move Allie123.
A lot of disappointed momentum followers seem to be bailing out through impatience with the company’s timelines. The market makers are dropping the price of fishing nets each day but still catching the booty!
I’m not sure it implies a 12 month target. It’s a target based on potential progress. What they have said is if good progress is made, their 400p target is likely to be conservative. I am not hanging anything on a time target. That’s not the point of it. It’s all down to what the company does. The broker has said it will update its outlook after the interims in December so I expect it will be advised by the company of the state of play of the projects at that time.
John389, two excerpts from broker note wrap-up: “Our 400p target price is based on the assumption that over the next 12 months the Medical Textiles division and the Heart Valve division will both make significant progress towards the potential £50m valuation of each that we have highlighted above.” “Obviously, both divisions are at a relatively early stage of development so there are risks as to, firstly, whether commercialisation will be achieved and, secondly, that this will occur in the timeframe we have anticipated.”