Hi
@Daning, ladies, gentlemen and any imaginary genders I may have missed,
Firstly Daning; you seem to post a lot here. I note that in your post
23990730 you welcomed the appointment of Peter Lewis when you stated:
'Very good news!! Proven track record has Peter.....fantastic appointment.' That was on the 11/4/17.
When you made that post, the share price was floundering at a mere 4.1 cents. What can I say? Fantastic board appointments are indeed known to change trends on the charts. PSY now appears to be in a healthy uptrend.
Trend is your friend. This has busted through the ~12.5 ceiling that was tested mid last year. Prior to that it had peaked at 23cents in Sept 2015. The year before that it had hit an all time high of 52cents. See the chart for yourself at
https://www.barchart.com/stocks/quotes/PSY.AX.
The five year chart in particular is a beauty. From a TA perspective, we had a break out when we closed above the long term ~12.5cent resistance. 23 cents is the next stop. This reality makes it prime material for Pump&Dump specialists, who would ordinarily be strategically be offloading as the price nears expected resistance levels. But this doesn't bear the typical hallmarks of a P&D. The share price has held up well.
All genuine trend reversals on the chart require some rationale and fundamental logic. Some may detonate a reversal or breakout with a dodgy whistle for the sake of setting a trend motion, but even if it was truly a dirty whistle that has drawn good attention to a good stock, I am not disturbed. I got set here months ago, based on my own evaluation and not a PPP report.
The PSY that was overbought in 2014, and peaked at 52cents is a much different company today. Management got a complete reworking early last year.
It would be an understatement to say that it is a now a whole lot better.
Hydrix has on-going projects and is competitively quoting and pricing others. I have had conversations with a North American company that have engaged Hydrix for D&Q- they only had good things to say. It is fantastic that we actually have an Australian company that is both competitive and profitable in doing engineering and manufacturing of products for overseas customers.
Even better is the fact that Peter Lewis is on board. For those that don't know, PSY had been interacting with Hydrix for a long while while developing prototypes etc. Peter Lewis was working for Hydrix prior to moving over to PSY. It seems he was noted by the PSY board to be a mover and shaker and got offered a job change. Circumstances in PSY's favour meant that Hydrix became available as a TO target. Peter Lewis of course new Hydrix extremely well and knew its strategic value for PSY. Then shortly after that Hydrix was taken over by PSY for an absolute bargain. The intention of the acquisition was brought to the attention of the market 5 September 2017. The acquisition was completed on the 13th November 2017.
I could write a lengthy article about Hydrix but their welcome page on their website sums it up well:
'
Since our formation in 2002, Hydrix has cultivated an impressive engineering team extremely well-versed in the execution of demanding research and development projects. The resultant close-knit development environment at Hydrix provides a highly-optimised value chain, enabling clients to bring the right product to market and to do so fast.
This has resulted in the successful delivery of 200+ projects to more than 80 Clients, with a greater than 90% rate of repeat business.'
The acquisition of Hydrix means that PSY no longer has to engage with Hydrix as a contractor to develop their spectrometers and other prototype equipment that led to the hype and yippetty yah driving PSY up to 52cents in 2014. Now Peter can crack the whip and make the Hydrix team give priority to existing PSY projects if that is indeed the pathway to accelerate growth for the company.
No doubt many existing shareholders will be eager to feed off any snippets of hope that will give them reason to reach and exceed all time highs of 52cents. I think I read somewhere here that PPP dangled the block-chain carrot. That is a LONG bow to draw: something was said to the effect that
block chain applications needs sensors to gather info and PSY is in the right space.
I too can be guilty of getting over excited, I'd love to see PSY hit the stratosphere, but trying to build hype by linking PSY to block-chain borders on criminal. It is somewhat like telling people that because Apple is selling a lot of computers, we can therefore conclude that electricians will make a killing selling power points: after all, everyone needs one to plug it in LOL.
Don't get me wrong; I am aware of the uniqueness of PSY's sensors; they can suit applications like no other sensor. But that doesn't mean that that they will capitalise in applications where a unique sensor isn't required.
As an investor that has been burnt in the past, rather than look at a stock imagining what can make the price go higher. I spend a lot of time analysing what exactly could drive it lower. To me, PSY has got a strong floor underneath it now that it is coupled with Hydrix.
What, aside from potential short term manipulation, can drive PSY lower? What fundamental concerns do we have? Hydrix is robust. There may be cashflow issues that typically accompany fast growing businesses (perhaps the reason why Hydrix could be bought for a steal in the first place). But unlike 90% of stocks on the ASX, PSY is not just a decorated story, it now has a real business, daily engaging with real clients. Astute and dubious punters may also deduce that this ought to put to rest negative speculation surrounding the spectrometer hype: a world class company like Hydrix isn't acquired for the illusionary purpose of making pigs appear to fly.
I don't see any downward pressure on the fundamentals.
Hydrix is well established and well diversified. They have a good customer base and have good credibility. PSY has exciting technology. The recent Defense Dept grant is not something that is usually granted to 'fly by nighters'.
Now, getting back to the quote from Daning, Peter Lewis is a sharp operator and thrives on driving hard business hard. He is a rarity amongst ASX directors. I have spoken to him numerous times. Once I forgot I was on WA time and got him at dinner on EST. He still took the call and conversed for quite a while before politely letting out that he was at a restaurant and perhaps it would better to chat later.
In conclusion, I feel that the TA support of ~13 on the chart is justified by the fundamentals of PSY. The Hydrix acquisition has de-risked PSY. Hydrix has grown amazingly since its inception in 2002. Its growth continues to remain scaleable. A lot of the old PSY battle weary shareholders have opted out. There is fresh optimistic blood on the share register. The long awaited PSY prototypes are complete and PSY is speaking with potential clients. All signs indicate that PSY is kicking goals and if there is a Peter Lewis productivity chart available, I expect he is continuing in an unbroken uptrend.
I don't promise that we will hit next TA short term target of 23cents, but with due consideration, I do not see this as an unreasonable outcome.
Kind regards,
CT
PS Do your own research. A good start would be Peter R Lewis' linkedin profile as well as both the Hydrix and Panorama websites.
