PEB - Pacific Edge Ltd

[Maxtrade]

Looks to me like selling by panic merchants with no eye for the big picture. Just because PEB raised $100m a month or so ago, there was no way that was going to turn the company's fortunes immediately.

We're dealing with an oil tanker here - not a jetboat - when it comes to speed of action. Long term PEB holders are only too well aware the health industry is notoriously slow to adapt to new technology (my local GP's practice has only this month got around to activating some key functions in the Manage My health App!). KP's support of the PEB technology is great but their frustrating slowness to integrate it into their systems is yet another example.

Once the reorganisation of our DHBs is in place next year, I believe PEB will (relatively) quickly achieve 100% coverage of its products in the NZ public heath system. What a great marketing story (and SP supporter) that will be, even if it's only a modest contributor to income.

Covid clearly isn't helping PEB's progress either, so I'm picking it might take another year or two before their investment in sales and marketing activity and employing more sales people really starts to bear fruit. The company's new MD starts soon and will bring a new focus on revenue generation too.

While PEB now has the cash it needs to continue on its growth path, the cost of doing so is an expense, so a break-even bottom line is still some time away. From that point onwards though, the growth will be exponential. That's when the patient investor will score a significant return.

Meantime, this week's panic sellers are creating some fabulous buying opportunities.

You hit the nail on the head. Totally agree. That's exactly what's happening. With all this new money in the market (plenty of inexperienced traders who have thrown their money at shares rather than have it idle in banks), see a bit a of a sell, get scared and follow the flock selling realising losses. Whereas such as Warren Buffet says when many see fear others see opportunity. 20% down off recent trending high 1.59. 10% discount to recent Cap Raise. Anyone on the sidelines looking to get into PEB would have timed it right if they waited until now.

I agree with you good buying opportunity taking advantage of the large volume seller needing to offload.

Anyway seems like the cavalry is starting to kick in and realise this, buyers accumulating support bouncing off todays dip 1.20-1.22 now.

1.20 was always going to be a key support level. Pretty hard to turn down PEB at 1.20 off recent trending direction. Probably be short lived? Back up into the 1.3's next week do you think (once sell off done). Who knows with the swings in the markets these days could even bounce back to 1.40 just as quick.

Also many will follow by cost averaging down at these levels if they participated in the Cap Raise at 1.35. Once they see the lower trough form, watch for cost averaging bids come through.

On uptrend watch for fear sellers then canceling sell orders at 1.25 deciding they don't want to actually realise a loss. Then pretty clear sailing with no heavy sell volume back up to where it was (once volume seller done which seems to be after 2 days of selling). Human traits similar to a flock of sheep on a sell off, think they are loosing money seeing share price drop, so sell, realise loss - actually loose the money.
Then those with more steady hands swoop up the discounted shares make on the subsequent rally. Then those shareholders that sold out of fear see the share price being higher than what they just sold off for and feel disgruntled. I made those mistakes when first starting out a few years back too.

[tango]

PEB excuse for limited sales was hospitals dealing with coronavirus. Given the latest wave of cases in Europe is expected to hit the USA soon and the added bonus of omicron joining the party PEB aren’t likely to pick up traction any time soon

[Harrie]

This result does not surprise me in the least. The market was unrealistically factoring in far better lab throughput than has been the reality. The disappointment has now been reflected in the current SP. I remember posting something when the SP was around $1.56 suggesting that to justify that price you would need to have the lab throughput at capacity of 260000 at $NZ$1000 per test, a margin of 30% and a earnings multiple of 20. That was never going to happen, not at least for a couple of years on the current trajectory. Add to this inexperienced sharesies investors and this is what you get.

I did not take up the recent share offer because I anticipated that the results ending 30 September were likely to disappoint. Total acceptance for a new diagnostic medical procedure never works that fast, and the health sector is riddled with vested interest when it comes to protecting income sources. The other aspect that worries me is blaming limited lab throughput on Covid. That's a contradiction. Isn't it safer to send out a urine collection bag with a paid return package directly to the Lab rather than going to the hospital or a clinic?

So now we are at the crossroads between potential and belief. On the negative side can PEB convince the AUA and Urologists that Cxbladder is the gold standard for testing for bladder cancer. If so how long is this going to take?
On the positive side we could find a health provider like Johns Hopkins come on board. There is also enough evidence around for clients to look for alternatives for cystoscopys and put pressure on practitioners recommending cystoscopys.

Looking on the positive side I see enough evidence that its just a matter of time before this diagnostic procedure becomes mainstream. With the NPV values they produce there is no current or likely competition, and for those reasons I am happy to hold and also add to my not insubstantial holding should the SP get down to the $1.10 to 1.15 level

[DonkeyKong]

This result does not surprise me in the least. The market was unrealistically factoring in far better lab throughput than has been the reality. The disappointment has now been reflected in the current SP. I remember posting something when the SP was around $1.56 suggesting that to justify that price you would need to have the lab throughput at capacity of 260000 at $NZ$1000 per test, a margin of 30% and a earnings multiple of 20. That was never going to happen, not at least for a couple of years on the current trajectory. Add to this inexperienced sharesies investors and this is what you get.

I did not take up the recent share offer because I anticipated that the results ending 30 September were likely to disappoint. Total acceptance for a new diagnostic medical procedure never works that fast, and the health sector is riddled with vested interest when it comes to protecting income sources. The other aspect that worries me is blaming limited lab throughput on Covid. That's a contradiction. Isn't it safer to send out a urine collection bag with a paid return package directly to the Lab rather than going to the hospital or a clinic?

So now we are at the crossroads between potential and belief. On the negative side can PEB convince the AUA and Urologists that Cxbladder is the gold standard for testing for bladder cancer. If so how long is this going to take?
On the positive side we could find a health provider like Johns Hopkins come on board. There is also enough evidence around for clients to look for alternatives for cystoscopys and put pressure on practitioners recommending cystoscopys.

Looking on the positive side I see enough evidence that its just a matter of time before this diagnostic procedure becomes mainstream. With the NPV values they produce there is no current or likely competition, and for those reasons I am happy to hold and also add to my not insubstantial holding should the SP get down to the $1.10 to 1.15 level

Here’s the post you wrote https://www.sharetrader.co.nz/showth...ht=#post912429

To save others searching back.

[Retired Doc]

Very happy to hold and likely accumulate if SP drops further. Recent events reinforce the impression that many investors do not appreciate the significant influence of medical conservatism and self protection. The KP issue of apparent slow adoption reinforces my experience of form triumphing over function with the barrier to using an excellent test being created by the inability of the potential user to easily use it because of it’s not being integrated into admin systems. A parallel is my former practice changing to a computer system the clinical staff loathe cf the previous system. But head office loves the business information and that drove the change.

[artemis]

Very happy to hold and likely accumulate if SP drops further. Recent events reinforce the impression that many investors do not appreciate the significant influence of medical conservatism and self protection. The KP issue of apparent slow adoption reinforces my experience of form triumphing over function with the barrier to using an excellent test being created by the inability of the potential user to easily use it because of it’s not being integrated into admin systems. A parallel is my former practice changing to a computer system the clinical staff loathe cf the previous system. But head office loves the business information and that drove the change.

Also, the more individuals have the non invasive test, the more individuals will have the non invasive test. Because who are going to revert if it is not clinically imperative? And they have medical advisers, friends and relations ....

[psychic]

Very happy to hold and likely accumulate if SP drops further. Recent events reinforce the impression that many investors do not appreciate the significant influence of medical conservatism and self protection. The KP issue of apparent slow adoption reinforces my experience of form triumphing over function with the barrier to using an excellent test being created by the inability of the potential user to easily use it because of it’s not being integrated into admin systems. A parallel is my former practice changing to a computer system the clinical staff loathe cf the previous system. But head office loves the business information and that drove the change.

It is a valid issue but I would argue that this is not the main problem, yet.

The tests need more supporting evidence and will not be adopted until they do.
We only have PE's spin on it that there is adoption, but the numbers do not demonstrate this. Until the tests find a way into the clinical pathway they will continue to be investigational and supportive only.

They have the funding now to tread water for a few more years while thier evidence builds. And frankly, I think they will need all of that.
Still far too much blind hope priced into this.

[psychic]

I have argued before that the four big announcements that took the SP from the 10 cent days were misleading.

I see no more talk of United Healthcare and suggest they have been told to cease that. That was utter smoke and mirrors stuff.
CMS "approvals" have meant diddly so far
Kaiser "commercial agreements" are just that, and I really doubt the problem is just an administrative one.
The "in the AUA guidleines" statement is just more smoke and mirrors



Even in NZ, it is still not fully supported.

[Minerbarejet]

I have argued before that the four big announcements that took the SP from the 10 cent days were misleading.

I see no more talk of United Healthcare and suggest they have been told to cease that. That was utter smoke and mirrors stuff.
CMS "approvals" have meant diddly so far
Kaiser "commercial agreements" are just that, and I really doubt the problem is just an administrative one.
The "in the AUA guidleines" statement is just more smoke and mirrors



Even in NZ, it is still not fully supported.

Would suggest that most of the healthcare systems worldwide have a major problem confronting them with Covid 19 and mutations.

I dont think anyone could deny that its presence will have an effect on other other surgical procedures, tests, many of which will be delayed due to lack of resources.

When the Monitor penny finally drops that some tests can be taken care of remote from the rest of the medical world, then there should be a considerable uptake.

"Kinda busy at the moment, we will get back to you"

[psychic]

Would suggest that most of the healthcare systems worldwide have a major problem confronting them with Covid 19 and mutations.

I dont think anyone could deny that its presence will have an effect on other other surgical procedures, tests, many of which will be delayed due to lack of resources.

When the Monitor penny finally drops that some tests can be taken care of remote from the rest of the medical world, then there should be a considerable uptake.

"Kinda busy at the moment, we will get back to you"

On the contrary, this should have been an extraordinary time for Pacific Edge. If the results of an "at home" test could be sufficiently relied upon to defer cystos and a visit to the office during covid then all the tests should have flown.