Originally Posted by
Lizard
Well done to holders and good to see an NZ company make it from start-up to profitable business!
However, while it seems like the risk around investing in ATM has reduced, if I was holding, I'd be considering taking some profits.
While a maiden profit is a great result, it is difficult to see the kind of significant growth in NPAT for 2012 that would justify a PE of 55. And while it appears the market has room to expand, it is likely to require a significant amount of capital to achieve growth, unless they use the royalty approach.
I guess the reality is that at least half the value in the shares is coming from the intellectual property assets rather than the operating business. A much more tricky area to value and requires a bit more knowledge and time. However, unless the IP is sold to a larger entity via takeover or royalty, it is going to require ongoing capital to extract value from it, which would tend to mean ongoing dilution.
Can't rule out a sudden takeover announcement - still small enough that someone might offer a premium to get the IP - but, personally, I don't generally invest on speculative binary outcomes, as I find it too hit and miss.