PEB - Pacific Edge Ltd

[Merc]

Long term Landlord here.
Bought our first rental property 30 years ago and added a few over the years.

Shares? Dad's interest, not mine.

Started getting interested a decade back when dad's health declined.... although reducing mortgages took precedence of course.

Knowing I'd inherit some eventually I figured out I needed to learn about them so did a lot of research and took a punt on PEB. Went into the red for years but added to them on and off.

The original 2 year Brightline test on property? Sorted out the long-term Landlords from the "Buy and Flipper traders."

Shares? I really hope that those who are trading are paying their tax.

Under current rules for those who dare to sell an investment in under 10 years... tax is payable on profit.

[Harrie]

Long term Landlord here.
Bought our first rental property 30 years ago and added a few over the years.

Shares? Dad's interest, not mine.

Started getting interested a decade back when dad's health declined.... although reducing mortgages took precedence of course.

Knowing I'd inherit some eventually I figured out I needed to learn about them so did a lot of research and took a punt on PEB. Went into the red for years but added to them on and off.

The original 2 year Brightline test on property? Sorted out the long-term Landlords from the "Buy and Flipper traders."

Shares? I really hope that those who are trading are paying their tax.

Under current rules for those who dare to sell an investment in under 10 years... tax is payable on profit.

So whats your point?

[Harrie]

I’m a beginner and starting to look at shares outside of ETFs.

I've been looking at Pacific Edge and from what I've read so far they seem pretty awesome, albeit without having much medical or scientific knowledge myself.
- urine tests with a high negative predictive value for bladder cancers
- potentially reducing the need for invasive procedures for patients and the load on medical infrastructure
- likely a high barrier of entry for possible alternatives, e.g. years of clinical studies
- limited competition? I haven’t searched much on that
- a potential market of $3.5 billion in the US and possible growth into other markets
- existing facilities to handle significant growth, up to processing 260k tests per year
- starting to pick up momentum in potential usage
- the upcoming ASX listing
- potentially going to have other products being commercialised e.g. cxcolorectal
- FY21 operating revenue increasing at a much higher % than operating expenses (I might be reading to much into that)

Sounds awesome.

However,
- the current share price of $1.47
- market capitalisation of $1.072 billion
- operating revenue of $7.7 million for FY21
- a lot of potentially

It makes me wonder how much of the potential growth is already priced in to the share price. As a beginner, based on gut feel more than anything else, I would guess a lot. So I’m wondering if and how people are modelling how much potential growth is already factored into the share price. I appreciate it is unlikely to be a simple answer and gradually I am going to try learn about techniques for this.

What you have written here are all good points and I have been thinking about the best way to answer them.
It really comes down to future earnings expectations. The more milestones PEB achieve, the greater the expectation that this trend will continue and could potentially lead to exponential growth (in the most optimistic of expectations).
There is no doubt that there is plenty of blue sky in the current SP, but then if you extrapolate the numbers based on the $7.3 billion dollar industry and assume that PEB has only a fraction of that market, the current SP doesnt look that overpriced. Read my post for more info. #19878

[DonkeyKong]

What you have written here are all good points and I have been thinking about the best way to answer them.
It really comes down to future earnings expectations. The more milestones PEB achieve, the greater the expectation that this trend will continue and could potentially lead to exponential growth (in the most optimistic of expectations).
There is no doubt that there is plenty of blue sky in the current SP, but then if you extrapolate the numbers based on the $7.3 billion dollar industry and assume that PEB has only a fraction of that market, the current SP doesnt look that overpriced. Read my post for more info. #19878

Cheers for taking the time to reply Harrie. That’s some really interesting analysis. Based on your wording, I assume you are considering a 40% margin as a conservative assumption? I wonder if it’s possible to get an idea on their margins from their presentations and reports. Very interesting.

[Shareguy]

Seems I was lucky in getting shares in the capital raise yesterday, time will tell. I decided to invest solely based on the potential going forward and believe the share price is “cheap”compared to the potential upside if it all go’s well. I agree it is a high risk stock, which is why I only purchased a small amount relative to my portfolio.

[Harrie]

Cheers for taking the time to reply Harrie. That’s some really interesting analysis. Based on your wording, I assume you are considering a 40% margin as a conservative assumption? I wonder if it’s possible to get an idea on their margins from their presentations and reports. Very interesting.

Yes 40% is probably on the conservative side but the more adoption of all the Cxbladder tests the higher the margin just simply because of economies to scale. Better margins make the future SP more compelling. I’m sure you realize that my analysis is based purely on potential. I used the current capacity of 260000 tests but the market is much bigger than that if it becomes the gold standard in the US and also world wide.
My other spec stock is Brainchip. Plenty of potential but who knows whether that will manifest into anything.

[Bjauck]

I sold 5000@ 1.75. 03/02/2014

Did you invest the proceeds into something fruitful?

[pierre]

PEB lists on the ASX on Monday. What are you picking that will do to the SP? Anyone want to hazard a guess at Monday's closing price?

[Greekwatchdog]

Why don't we ask Psychic....Come in Psychic..

[Ggcc]

PEB lists on the ASX on Monday. What are you picking that will do to the SP? Anyone want to hazard a guess at Monday's closing price?

Most likely short term rise and after that stability for a bit until figures are seen. No big shorters yet unless company under delivers