Wow, this keeps getting higher and higher. I would love to hear some thoughts on why this is the case?

It is obvious that I am bullish on NAN ( although, I understand it's expensive from the traditional valuation metrics and there is a short term hit to revenue ( i.e not loss of revenue - just delayed ) However, for me, It is just hard to find any reasonable argument for this high short. I am putting it out there to all who follow this stock to put their thoughts and happy to be schooled here - I better lose my ego than $.

I'd love to hear the short case on Nanosonics too, but my guess is also that it's based on valuation.

If you're like John Hempton, and betting on companies that you think will go to zero, then ok, it makes sense. But betting on a falling price just because you think the stock is overvalued by 30% (or whatever it is) just seems risky..

I'm not too worried about short sellers. They get it wrong just as often as people on the long side of the trade do.

Hi All

Always able to have a go at a bear case. I would make 3 points,

Firstly, valuation, I (admittedly aged) had a valuation of $4 on an assumption of world domination for trophon. still seems reasonable although cost of capital is rising so maybe valuation should be a bit lower. so very solid value in the mid to low $3's?

secondly, IMO the second product was quite disappointing. I have heard murmurs that this product was not the first plan and a fill in post something untoward happening with the first choice, obviously no confirmation. remember the long delays......

lastly the continual changes to the US distribution I find confusing, although bull and bear cases can be made, adds uncertainty

the shorts coming now appears late to the show imo

I have met the Irish chap in charge a few times and found him quite frank, which is good

Overall I think it is mainly a case of small health being overvalued and rebasing

hope this opinion is of some help

not held

There's the general aversion to high PEs in an inflationary environment. Also given the sudden uptick could it be that a short attack is in the offing? Even if it was I probably wouldn't do anything differently, although a short attack might be a good opportunity to buy lower if it appeared to be without merit.

@Solvetheriddle, thanks mate. Always appreciate hearing a bear case. I think all your points are valid, too.

Another point - is it possible that sentiment is also pretty poor re: NAN? Yes, as investors we are constantly reminded to focus on the company, not the share price. We know this is a physiological battle at the best of times and the majority of us use Strawman to discuss some of these battles with like-minded investors - ie keep your eyes on the long term prize, the ability of a business to generate FCF and subsequently provide shareholders with market beating returns. The interesting thing with NAN is there might be a lot of complacency, particularly from long term holders. We often talk about how long investors are prepared to wait to 'be right'. Here we have a business that is impressive in many areas and continues to grow steadily -- yes they aren't perfect, and the point above about their second product possibly being disappointing is a fair one. But the reality is this is a business which has seen its share price rise pretty rapidly, only to fall to 2019 levels. Some of that period was arguably one of the best 'bull runs' we have witnessed over the past two decades -- yet for long term holders it might feel a little like groundhog day. Is it possible sentiment and complacency are more powerful here than we suspect?

Thinking out loud.

Some more digging into this.

Shareholders at 18th August 2021

Seems Like Mitsubishi UFJ Financial Group (MUFG) has borrowed ~20m shares from First Sentier Investor Holdings and Morgan Stanley to sell between 8th Feb to 24th Feb based on http://www.aspecthuntley.com.au/docserver/02494296.pdf?fileid=02494296&datedir=20220301&edt=MjAyMi0wMy0wMisyMzozNzoxMis0ODArMTA3NjU2OSthbmRyZXd3ZXN0K3JlZGlyZWN0K2h0dHA6Ly93d3cuYXNwZWN0aHVudGxleS5jb20uYXUvaW1hZ2VzaWduYWwvZXJyb3JwYWdlcy9wZGZ0aW1lb3V0Lmh0bWwraHR0cDovL3d3dy5hc3BlY3RodW50bGV5LmNvbS5hdS9pbWFnZXNpZ25hbC9lcnJvcnBhZ2VzL3BkZmRlbGF5ZWQuanNw

I have gone back and checked Top 20 shareholders reports - there isn't much change ( in fact they have got more than what they had in 2018). Assuming none of top 20 will sell down their position significantly if Nanosonic reports a OK report.

Shorters will have to find a way to buy 37m shares. So there is a higher probability of a future short squeeze here in my opinion

Yes, the margin will be higher. On a call, it was mentioned that Nanosonics will make US$1500 - US$2000 per unit.

in the last half, they sold 1200 units in North America.

if we assume numbers remain the same in the new sales structure - last half would have an increase of US$1.8m - US$2.4m ( so mid figure is US$2.1m so $2.8m AUD)

If we annualize it becomes ~5.6m Australian $

Even if we don't count growth in trophon units as well as completely ignore margin in consumable... figure comes to AU$ 5.6m ( Which is more than enough to compensate for extra investment)

*US$1500- US$2000 more per unit

@Valueinvestor0909

Hope you dont mind me asking? where can I find info on shoting of company stocks?

Thanks

shortman.com.au is my goto site for that information.