re: australian stock report
Many members would have noticed that there has been one stock in our speculative portfolio that’s been an underperformer. There are some very good reasons for us to believe this might turn into an outperformer sooner rather than later.
The stock, Premier Bionics (PBI), is focused on the global medical devices and diagnostics markets, estimated to be worth around US$170 billion per year.
Source : Australian Stock Report http://www.australianstockreport.com.au/dsp_report_dailysample_view.cfm?CFID=213770&CFTOKEN=26504623
The company has two wholly-owned subsidiaries: Medic Vision, which provides consultancy implementation and maintenance of virtual reality simulators designed for use in medical training. The other is Pulmosonix, which develops technology to enable non-invasive monitoring of lung inflation for the treatment for those suffering respiratory distress.
Vision for the future
Medic Vision is active in three regions, UK/Ireland, Asia (China, Hong Kong and surrounding countries) and Australia. The potential of Medic Vision to be a global force for medical and surgical training is substantial. The company works in a unique space where there is an exponential demand for technology to provide better training and monitoring of medical practitioners.
Medic Vision is experiencing a significant uptake of its products and services in China, where there is a huge appetite for western medical education. Medic Vision is completing its first “skills centre” in China and has equipped the centre with state of the art simulators and telemedicine technology. Many more skills centers are planned.
Marching through March
While it has been quiet recently for Premier’s share price, it has been far from quiet in terms of announcements relating to new contracts and grants. March was an especially busy month for PBI with the following items released to the market
3 March: Medic Vision completes its operating theatre integration project at Hervey Bay Hospital. This takes to 15 the number of operating theatres across Australasia in which the technology has been implemented. CEO Ross Horley notes that there is a growing trend for hospitals to upgrade the technology in their theatres.
14 March: Half-yearly results showed revenues rose 363% and losses narrowed, and the company had $2.5 million in cash. Also, the company said it’s in sales negotiations with a number of parties in Asia, UK, and China.
24 March: Medic Vision announces that it has secured a new operating theatre systems integration project with a major Brisbane hospital.
31 March: Medic Vision announces the signing of a contract between the University of Melbourne and CSIRO to develop a temporal bond drilling simulator for commercial deployment. The simulator will enable ear nose and throat surgeons to train for assisted hearing surgery such as cochlear implants.
4 April: Pulmosonix announces that it has been awarded an AusIndustry grant of $561,000 to fund the second phase development of the PulmoScreen project. The grant provides 50% of the required funding to take the project through to clinical trials through to April 2007. At this stage, PulmoScreen would then be potentially commercially viable in a market of over $60 billion world wide.
Like the singer says…
The market capitalisation of PBI is currently around $13 million, so it only a minnow; but to quote a one of the great folk singers of our time, “from little things, big things grow”. Compared to other medical device and education based companies, PBI appears to very undervalued. As such, it remains a key holding in our speculative portfolio.
Looking forward, we are expecting the positive news flow to continue, with the company in a number of negotiations over key contracts.
High hopes
The company aims to be cash flow positive within the next 12 months, subject to the existing development roll-out. This is based on receiving grant funding for 50% of our development costs, which they rate as highly probable. So, this is that exciting time for a company, when it goes from chewing up the cash and launching the business, to standing on its own two feet and seeing some money come back from those activities.
We are most encouraged by the recent price action, which has seen the stock rally on excellent volume. The market depth now also looks most constructive for further gains. So, those members who have been holding the stock since our initial entry late last year should be well served by continuing to hold this stock.
Newer members should consider adding Premier Bionics to their portfolios as well, with a long-term speculative focus.
PBI
premier bionics limited
