CT1 0.00% 1.8¢ constellation technologies limited

agx up 12% on 10x volume - must read short summary

  1. ds
    7,131 Posts.
    Rather than hype it - here is a summary of why you should look into holding this company.

    Underlying Earnings have been increasing for the last 4yrs.
    Cash generation of 4-8m per year.
    Writes off all R&D instead of capitalising.
    Benefiting from PAN shut down.
    Milton Pharmacuticals turning flat or profitable.
    Top 20 shareholders have increased their total stake every year for the past 4 years.
    Huge sales growth potential from existing product lines.
    Now we get to why people are actually buying it.

    Thrombowview - Deep vein thrombosis and Pulmonary Embolism diagnostic tool currently in Phase 1b trials with all good news so far. Theoretical values for this product range between $2-$11.50 if successful.

    Research - Southern Cross Equities and Burdett Buckeridge and Young with others like Hartley's reccomending it.

    What to watch for given today was up so much on massive volume.

    1. Distribution agreement into the US for Agen products
    2. More results from Thrombowview
    3. diagnosis of a PE (this may not be possible - I am not a medical expert)
    4. A deal with a distributor for Thrombowview.
    5. Result due by end of Sept.

    possible share effects -

    1. 5-10c worth
    2. 5-10c worth
    3. huge - this would effectively leapfrom Phase 2 trial results - probably worth 50c-$1.00
    4. moderate or huge depending on deal - need to see the agreement
    5. Mild - expect a flat result as they sacrificed a couple of months sales into the US to change distributors and given they are writing off R&D the net profit could be tiny or a loss - look at the EBITDA number to see how much the underlying business is making and check cash balance - given they would have spend at least 5m on Thrombowview they should have less cash but they got $2m from the govt so anything above $4-$5m would be a good result.

    So why buy now? Well if you can get hold of either research piece mentioned above you will see that the underlying business is valued at between 47c-77c depending on discount factors and other variables. THIS excludes Thromboview. With Thrombowview at about a 20% probability of success you come up with 70c - $1.50 again depending on variables - obviously this means at 100% success we are talking $3-$6.
    Note all research I have read assumes they only get 10% of the US DVT diagnostic market - they havent even included Japan, Eurpope - ROW or a higher %age or other applications. If they can sell it in the US why wouldn't they everywhere else? So my bullish assumption is $5-$15.

    Basically you are buying a compnay at underlying fair value in a bull market for small/mid caps with a massive volume upmoving day and zero news out yet.

    As for technicals - please feel free to comment tech traders - I would like to see if anyone thinks a volume breakout of multiyear highs is a bearish signal!

    Good luck - I hope you found this summary helpful and it would be exiting for a long winded person like myself to get more than single line replies.
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Last trade - 11.47am 15/04/2021 (20 minute delay) ?
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