PNV (ASX) Short Activity in PNV

Originally posted by UncleFesta: ↑

Fellow Polynovians. Some seem somewhat concerned about the recent share price pull back. Fair enough. I thought I’d share my view on where we are at. The context of course is that my thinking tends to be longer term than most.

Firstly, It’s OK to have a pullback in price. No price only ever goes in one direction, and I think the recent pullback is just a better buying opportunity. Exactly 12 months ago we sat at $2.24 – It’s worth noting that the business is a far cry from where it was a year ago and market access is much improved compared to a year ago. Additionally, the ridiculous price that we fell to was I think most would agree, was dishonest. Those who follow the business and not the share price were aware of this and were not only not frightened into selling their shares, but wisely picked some up.

Our products maintain massive value benefits over the incumbents, the main one being integra. We are a larger company now with a far wider reach. As we grow, the reasonable expectations around our company performance are that our sales and growth will be more stable and less lumpy. This intrinsically leads to higher valuations, since it can be more reliably modelled and therefore the risk discount is reduced.

We are progressing several new developments (as are third parties underpinned by our technology), all of which are exciting and represent massive TAM opportunities. SynPath of course is market ready and given results to date, its reasonable to expect strong growth in this product, with accelerated growth once the results of the trial are presented.

It is easy to lose sight of the size of the market opportunity that we are currently selling into with NovoSorb. We are not just targeting burns like we were a couple of years ago. With all the new indications the product is being used for, the TAM for NovoSorb is massive. I’m very confident that we will win our fair share; and eventually the Lions share; and the Lions share makes for a massive and highly profitable business on its own. The rest of the developments can simmer away on the backburner toward commercialisation without much thought. We’ve got enough growth opportunity to keep us busy growing quickly and profitably for a long, long time to come.

It’s also worth remembering at this juncture that the cost profile of our product(s) not only assists in our ability to attack the TAM; but we will be able to grow the TAM in leaps and bounds by entering markets for which price has traditionally been a significant barrier. We will have gown and altered the markets for the betterment of humankind. It feels good to think that in one miniscule way, I am a part of that.

We have just engaged the services of a highly experience and highly successful new CEO, and not to labour the point, but we are already growing very quickly; and the fact that it appears that our new CEO is keen to step growth up is very exciting.

Our strategy to date has sought rapid organic growth. Our new CEO, along with our chairman have hinted at even more aggressive strategies. These may include entering large markets which were considered too challenging prior to the arrival of a CEO with experience in these markets; or through strategic acquisitions which are now openly on the table. Ultimately, I expect a combination of all these strategies will be executed. I’m good either way, though I do lean toward making strategic acquisitions to accelerate growth and solidify our presence and profile quicker. Strategic being the key.

Now, to the shorts. Over the past 12 months, the shorts had piled in, particularly after the Q1 22 results came in well below expectation. The poor quarter also hit the valuations the brokers were setting which of course had a negative impact on price and assisted the shorts. That result gave the shorts the confidence to attempt to drive us out the ASX200 in order to cash out with huge pay days. They succeeded, though they closed out far fewer than they would have predicted, and it cost them a lot more due to DW and others buying prior to the rebalance.

Since that quarter however, we have had two record quarters back-to-back; and it’s reasonable to assume another record sales quarter will be delivered in Q4 22. IMO we will end up with somewhere in the vicinity of a 58% to 60% YOY growth rate. Now anyone that thinks that such grow isn’t impressive (particularly given the bad quarter) needs to have their head read.

The short sellers still need to buy the stock back

The company will not stop growing.

If the results next week show Q on Q growth, average and sophisticated investors alike may buy in to the Polynovo story, as might new funds. I would also expect brokers to announce significant revaluations and target prices. All of this will put pressure on those holding short positions. It might lead to a squeeze and rush or an orderly exit with a steady rise in price?. Who knows, though My preference would of course be for the shorts to get burned such that they would look elsewhere in the future.

Ultimately, my modelling considers the stock great value at current prices. I can’t imagine that anyone’s valuation could have modelled anything but strong growth; and therefore, it stands to reason that if I’m wrong… its only a timing issue relative to other people’s assumptions.
With a relaxed mind, genuine confidence and patience.

Fes

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thanks fez, enjoyed your post allot. I don't post but read Pnv hotcopper everyday for years now. PNV is my biggest holding in 15 stocks. i did manage top up at 87c and looking forward to Friday.

No.	Vol.	Price($)
13	33082	$2.07

No.

Vol.

Price($)

33082

$2.07

Price($)	Vol.	No.
$2.08	22478	22

Price($)

Vol.

No.

$2.08

22478

No.	Vol.	Price($)
14	33176	2.070
20	48264	2.060
14	93857	2.050
10	74912	2.040
10	166785	2.030

No.

Vol.

Price($)

33176

2.070

48264

2.060

93857

2.050

74912

2.040

166785

2.030

Price($)	Vol.	No.
2.080	16035	18
2.090	76894	29
2.100	50330	24
2.110	73875	22
2.120	146177	9

Price($)

Vol.

No.

2.080

16035

2.090

76894

2.100

50330

2.110

73875

2.120

146177

(20min delay)
Last $2.07		Change -0.020(0.96%)		Mkt cap ! $1.442B

Open	High	Low	Value	Volume
$2.10	$2.14	$2.07	$474.6K	226.2K


Last $2.07		Change -0.020 ( 0.85 %)
Open	High	Low	Volume
$2.11	$2.14	$2.07	76018
Last updated 12.05pm 06/05/2024 ?

thanks fez, enjoyed your post allot. I don't post but read...

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