Fundies are Loading Up

As has been discussed, CUV represents an incredibly compelling opportunity at these prices. A huge cash pile, and an EV to earnings you would expect for a challenged/declining business (not a cash printing growth stock with an enormous pipeline). There is probably not a single stock you could compare CUV to which would make it not look ridiculously undervalued, and if anyone can find a stock that doesn't make CUV look undervalued please tell me so that I can invest in it. This hidden gem is quickly being discovered though, with several fund managers recently mentioning it specifically as their top picks. With the company now buying back everything under $15 (and likely soon higher as we approach the AGM), and shorters in desperate need of liquidity to cover before the inevitable rerate, it will take very little buying from these fund managers to really send the price soaring high. Top 20 hold 80% of shares outstanding - there aren't a whole lot of shares for the shorters, buy back boy and any interested investors to get their hands on at all! Give us a catalyst or two and there won't be much holding prices back at all (and we know there are several catalysts quickly approaching, such as the game changing Vitiligo indication, amongst many other potential rerate catalysts).

I often tune into the webinars and read the reports of many top fund managers her in Australia and abroad. The most common theme is that due to their underperformance the past few years, both health care and small cap stocks represent an incredibly lucrative opportunity, and is therefore the focus for many fundies. They are also after businesses with strong balance sheets in the current rates environment, as well as profitable and growing companies. Clinuvel ticks all of their boxes, so the timing couldn't be any better really for Clinuvel to be moving into what is likely to be a highly active next few years leading up to becoming a household name by 2026.

Here are some examples of fund managers talking it up. I am sure there are many others as well doing so behind closed doors. As they expand their investor relations effort, interest should only increase. At these prices and with the current fundamentals, it really is a no brainer in my view.


Elston (on Livewire, April 2024)

2 undiscovered stocks (and how to analyse under-the-radar companies) - Buy Hold Sell | Livewire (livewiremarkets.com)






Jencay Capital (December 2024)