PNV - Banter and General Comments, page-7480

I have an issue with Polynovo being classed as a Biotech.

In my view, Biotechs are those companies trying to develop, and find a market for, some new medical intervention. I'm sure you could all name 5 of them. I previously was in one (BLT) that at one point made me rich then at another took all that back! I no longer invest in these as preservation of capital is my number one investing guideline. Polynovo's product is not even biological! [I am aware that PNV does have products being developed that might fit this category, but right now they are a very small part of the company.]

Polynovo is in my view better classed as an industrial. It already has a product that it sells into a ready marketplace. Pretty simple really. Many companies do exactly that. Tesla does exactly that.

So to buy and sell PNV on the basis of what is happening to Biotech's generally seems absurd to me.

To make an investment decision on Polynovo I feel it is important to look at the factors that affect any industrial. I could make my own list here, but Googled a generic one to remove any biased listing I might create.


So lets look at Polynovo in that light:

1. Sales have been increasing at an accelerating rate for the five years the company has been selling BTM. Profitability in terms of the product is phenomenal with margins of ~95%. All company profitability is invested in continuing growth.

2. The company now has five years of operation with a pretty steady growth and development record.

3. Equipment required to manufacture the product is relatively new and has capacity for greater production.

4. The technology is cutting edge and with patents etc it is difficult to imagine "obsolescence" in the next 10 or 20 years.

5. Competition is actually Nil. Products that currently service the market are already demonstrated to be inferior in technology and significantly more expensive.

6. The industry BTM is being sold into tends to be quite slow in uptake of new products but then quite loyal once products are accepted.

7. Just one product at present - which is currently occupying only a very small portion of the TAM. Profits from that product are being used to develop further products.


Looking at Polynovo in the light of a growing industrial, it looks like a strong buy in my view. I just cannot find any better in fact.

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