Member Info for Testudo

Take a look at Polarean Imaging (POLX). Recent fund raise has obliterated its share price but it now has a long-term cash runway. It’s already met the upper end of its sales target for 2024 and we’re not even halfway through Q3.

Its technology is world-class and unique. It has the necessary FDA approvals and major medical institutions are buyung its machines. The UK regulator has yet to approve it, but *when* it does POLX can benefit from the govt’s manifesto commitment to buy 1,000 new MRI machines for the NHS. All points in one direction for me.

Big red candles are never pretty. But - and I do stress this is on balance the more unlikely outcome, today’s trading could yet prove to be a springboard for a big jump in price this week.

For that to happen, we must gap up tomorrow, without trading below, probably, 1.735p all day. With that picture, price can reach for the stars, since the sell-side liquidity has been taken today (although I would have preferred a rejection of those levels when it was).

MACD on the 1D chart is tightly coiled, so it could go either way, but for a month now daily RSI hasn’t gone slow the mid-40s for more than a single day, so that demonstrates the buying pressure.

All that said, another day of weakness like today’s sets us up for some rough to,es, possibly with 1.35p revisited. Bargain buying to be had there if so…

Today has again been positive for chart structure. More higher highs and higher lows on the daily candle. I'd have preferred it if we'd nudged above resistance at the close, but intraday we've broken through prior resistance of 1.9p and closed just below it. That's a level that proved altogether insurmountable on five prior trading days (19th, 25th June; 17th, 18th, 23rd July). We have now broken through it twice in two days, with higher lows too, suggesting it's now more fluid. Momentum is broadly with us, and a weekly close above that 1.9p resistance would be very bullish.

If that is achieved then I'd anticipate that 1.85p might prove the low of the day on Monday, potentially also forming the low of the week if we are really going to rocket. Interestingly, and as predicted after less than two hours' trading on Monday (see my post in this thread of 22 July 09.49am), 1.65p has proved to have been the low of this week so far. There remains one day to go, natch, and it could go horribly wrong from here (and if they do then it could bode ill for the next few weeks), but as things stand I think I can afford myself a pat on the back for that call.

Year-end 2023 cash was £6.2m. Another £9.9m was added with the raise. Even allowing for the 2023 cash-burn rate of £10.4m p.a. (which seems the bear case, given recent sales activity) then POLX currently has an enterprise value of £13.2m.

If cash burn has been slowed to, say, £5.2m p.a., then the current EV is £8m. At a time when the government has pledged to purchase a thousand new MRI machines for the NHS. With firm NHS orders, further expansion can be debt funded, obviating any more dilutive raises.

It is quite strongly possible that POLX is the most undervalued stock on the entire global market.

It is. I suspect this is down to the positive surprise in the results. But it was all foretold in the charts, as I’ve been pointing out. It’s sort of been the entire point of this thread.

This is a technical analysis thread, pyjama.

All post-raise gaps have now been filled. Last Friday saw price cover the hole on the 15m chart between 1.68p and 1.7p. There was a very healthy confirmation of that level this morning when stops below were cleared, producing a nice rejection of 1.65p. And it’s very good that this level has been taken at the start of the week, which should hopefully be enough to form the bottom of the wick on that 1W candle.

This should mean that price can concentrate on the upside from here. Last week’s highs of 1.91p should be quite easily taken (more buy-stop liquidity there) and with the downtrend line from mid-June to the first week of July already broken, a platform for filling the gap above to 2.61p has now been built. That is heavy resistance, but I think price could reach 7.2p before it suffers any more big falls again, and even if that were to happen, I’d consider that only temporary as part of the long-term upside structure now in play.

The 4H and 1D charts are looking really promising. The downtrend that formed from the frothy post-raise high at the end of w/b 17th June broke last Thursday. The first retest held but there was a second at a lower level this Monday. That served to launch the price to the 1.8p it got up to today. My view is it’s got further to run.

It’s not yet reached the 50DMA but if it can confidently break through that, then the next target, as I’ve previously point out, is the gap close at 2.61p. I’m backing that to happen when the 100DMA reaches the same level. That will prove very tough resistance indeed if it reaches that level at that time. But, who knows?, we’re forming a nice cup and handle here, so there’s a chance we could push on through. Even if it does break down at that level and we head back down to the levels we’re at now, then a new thrust from there could be extremely bullish indeed.

I’m loving the technicals in this stock, and with the fundamentals as positive as they are, there’s every reason to believe the next positive news can push us a long way back towards where we were last autumn.

The Economist has caught on…

the Pentagon established a Cable Security Fleet in 2021, in which American-flagged and crewed cable-ship operators received a $5m annual stipend in exchange for being on 24 hours’ notice in a crisis and being ready to serve in wartime.

https://www.economist.com/international/2024/07/11/how-china-and-russia-could-hobble-the-internet

I posted the following analysis of this on the basis of the Labour manifesto pledge to this end…

Testudo

Posted in: POLX

Posts: 46

Price: 2.00

Strong Buy

RE: Labour manifesto20 Jun 2024 11:17

Just want to get this to the top of the board because it seems there's quite a bit of scepticism that POLX can ramp up its sales volume quickly. The next govt of the UK, which is projected to win by an historic landslide (whether you like that or not) has made a *manifesto commitment* to double the number of CT scanners held by the NHS.

According to the Royal College of Radiologists, that is long overdue. This from June 2022 (https://committees.parliament.uk/writtenevidence/109148/pdf/):

"Figures from the OECD in 2021 did find that the UK as a whole has fewer scanners than the majority of comparable OECD countries at 8.8 CT scanners per million population compared to an OECD average of 25.9 and 7.4 MRI scanners per million population compared to an OECD average of 16.9."

In June 2022 there were basically 1,000 CT & MRI scanners in the UK, being (8.8+7.4)x67 = 1,085. So the next govt is going on a buying spree. And POLX, a British company, has the world's leading respiratory-condition scanner, at a time when research shows the UK is lagging 20yrs behind the rest of Europe in combatting cancer (https://www.telegraph.co.uk/news/2024/06/19/uk-cancer-care-is-20-years-behind-europe/).

If the MHRA (https://www.gov.uk/guidance/regulating-medical-devices-in-the-uk) can fast-track POLX's scanners on the basis that the FDA has done so and US medical universities and institutions are buying them as the best-in-class equipment, then this is a ridiculously huge, new, domestic market it can tap into instantly.

Lung cancer is comfortably the biggest cancer killer in the UK (https://www.cancerresearchuk.org/health-professional/cancer-statistics/mortality/common-cancers-compared#heading-Zero), but if only 5% of the new scanners are commissioned from POLX, then that's 50 sold here, in this country, straight off the bat.

When the market prices in that upside risk, hold onto your hats.

So we are now above the mini downtrend that began to form with the swing high last Friday. On the hourly chart, the sell-off yesterday retested and rejected the upper trendline. A green candle close on the daily today would be bullish (even more so if we’re green on the weekly at c1.67p.)

There’s even some room for it to fall before invalidating the new trend, which is building a very exciting-looking cup-and-handle formation. The next resistance from here is the 50 DMA at 1.925p. Above that, the swing high at 2.3p and beyond that, the 100 DMA at 2.86p. I have a hunch that we will hit that 100 DMA when it has fallen to the level of the swing low that is the lower point of the pre-raise gap at 2.81p, which would mean ranging for a while, probably until a news announcement.

But RSI on the daily is in the mid-range and the MACD is quite tightly coiled. Weekly RSI is massively oversold, and MACD is also very tight there, so, when it comes, a move one way or the other could prove quite explosive indeed.

With the PM today saying that permission had been given for Ukraine to use Storm Shadow on military targets inside Russia, it seems inevitable to me that Putin will order some form of asymmetric-warfare escalation against the UK. He's already had ransomware gangs attack the NHS. Among the next targets up the escalatory ladder would be undersea cables. TGP should get on to the MoD and get those retainers in place.

Anyone who bought at 1.4p today has got themselves a bargain. That was at a £16.9m market cap with >£10m of that held in cash. (I topped up at 1.5p.) This share can quadruple in fairly short order on big news.

I have a feeling this share may just have posted its low. This could be the last chance ever to top up at sub-1.50p.

GLA and DYOR.

tbf, i don't like you writing about ****nal either. envy of greatness is not a good look for you, hd.

I thought it was at 6pm, no???

Wildly guessing here, I dunno, but given how the outgoing CEO/exec director, soon to be NED has recently spent a quarter of a million of his own money to own >2pc of the entire company, I expect at least one of them cares about the shareholders. 🙄

Alongside the technical picture, it's also worth noting the fundamentals that, according to the annual report, "prudent financial management allowed us to finish 2023 with a higher-than-anticipated cash balance of US$6.2 million."

The recent raise added $12.6m to that. Even assuming the 2023 cash-burn rate of around $10m p.a., that should indicate that there's around $13m still in the bank at the end of H1 2024, which is pretty conservative. This means that the current $24.72m market cap allows for only c$10-12m of value in the company's assets, patents, relationships, ongoing sales negotiations and growth prospects. All this while the UK govt alone has made a manifesto pledge to purchase c1,000 CAT and MRI machines, and the FDA has already fully approved its machines and XENOVIEW, with several academic and medical institutions already confirmed buyers of both the machines and the gas.

This seems a preposterously low EV at 1.6p per share, even allowing for the prospect of future dilutive fundraises. An upwards rerating will only be a matter of time, even if it does drop to 1.4 or less in the meantime (which would constitute bargain-buying territory for my money).

As I mentioned at 2pm last Tuesday, a push above 1.9p was critical for the next up-leg or there would be further downside. It did fail from there and fell 10%.

We should get a decisive break up or down this week, perhaps even today, with 1.4 or even 1.14p the medium-term downside targets (i for one would be buying more there) and 3.4p up above.

I favour a move up as things stand. We are potentially building a bug cup-and-handle formation and the recent consolidation has put us in a pennant pattern that is due to break soon.

I am encouraged by the shift in sentiment on this board away from wild speculation about imminent 10p targets, being replaced by doomers wanting their money back. Other small caps have also recently begun to break out.

DYOR and GLA.

Very interesting, Harry. What's left to go, and at what price?