16-May-2024. Not a valuation. A Price Target.

$2.60 was the average of member valuation estimates yesterday, and I'm adding 10% to that because I'm choosing to be a bit more bullish than average. So that's $2.86.

I added them to my SMSF at $2.17 yesterday and they closed at $2.16.

Price Target of $2.86 within 2 years and 4 months, so by September 2026.

Well run company producing quality products that are needed and add a lot of value, solving needs, improving outcomes for patients, now profitable, cashflow positive, growing all important metrics at a good rate.

I believe that becoming profitable is an important inflection point and that PNV's full year report in August is going to underline that to the market, and they just might get a positive re-rate off that.

I can easily look past their flamboyant and outspoken Chairman, who probably does more good than harm to be honest, so I don't have any issues with DW, and what I see, bearing in mind that this company is well outside my circle of competence, is a company that has a lot going for it; it's substantially de-risked - the risks are really only around the rate of growth, and the levels of profitability they can achieve - and over what timeframe.

I think it highly unlikely that some other company is going to invent alternative products that are going to be far superior to PolyNovo's and take away their market - I mean that COULD happen, but it could not happen overnight. Things don't move super-fast in health care - that much I do know. Adoption of new products and procedures takes time, and PNV are getting that traction now - they've been in the market long enough that they are being accepted and their products are being used - and that starts slow but does pick up speed, like a snowball, but it starts slow, and that's a competitive advantage that PNV already have over any new entrant to the market. So - while I don't know much, I think I'll be able to tell if PNV start losing market share to a competitor (or two) in future years.

'Nuff said. My Investment Thesis is neatly summarised in this document: PNV-Macquarie-Australia-Conference---Presentation.PDF [08-May-2024]