PolyNovo has popped, RMA Global hasn’t, this investor is still buying
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Melbourne investor David Williams is backing his judgement with two ASX horses, one of which hasn’t “popped” yet and the other has.
He sits on the boards of wound dresser and breast implant maker PolyNovo (ASX:PNV) and real estate agent listing site RMA Global (ASX:RMY), and has been buying into each.
“I think both of them are going to be great success stories for Australia,” he told Stockhead.
“The beautiful thing about tech and about pharma is they’re significantly scalable with very little capital and [these ones] earn US dollars.”
Mr Williams bought $212,600 worth of stock in RMA Global last week and a total $533,620 since the start of January, on his personal account.
Together with his Kidder Williams company holding he has influence over 31 per cent of the company.
RMA sells website listings to real estate agents as a way for them to sell their own brand.
It started in Australia and has expanded into New Zealand and the US, a market Mr Williams says is more exciting as the fees are larger and American agents are more used to building an individual profile.
But the market doesn’t share his enthusiasm, with RMA shares wallowing around 20c.
“For me it’s a bit like some of the other tech stocks, Redbubble (ASX:RBL), Afterpay (ASX:APT). They all languished for a while, but when people saw they had traction… it pops.”
“RMA hasn’t popped yet, there are some people who think it’ll never pop, but I do.”
In February the company said it had 13,200 agents in the US and 30,500 out of the about 35,000 active agents in Australia.
The company expects to launch a subscription model and start earning US revenues in the next few months.
It made $3.6m in half year revenue come the end of December, but fell into a $3m loss compared to a small profit in the 2017 half year.
Mr Williams bought $58,000 worth of stock in PolyNovo two weeks ago.
He controls 2.5 per cent of that company.
The company makes biodegradable wound dressings and a high-tech implant for women who have had a mastectomy, the idea being to create a ‘scaffold’ around which the body can grow its own cells and potentially grow its own new breast shape.
PolyNovo doubled its revenue from the all-important US market in the half year to December 31, from $2.5m to $4.8m, with three customers from that country making up 10 per cent of all sales revenue.
It cut $1m from the half year loss, which hit $2.1m, and total revenue from around the world was $5.7m.
“PNV’s been a ball-tearer,” Mr Williams said.
“A lot of the major surgeons are saying [NovoSorb is] changing the way wounds are handled, in the US, and that is permeating the conferences now,” and it’s been taken up by some major hospitals.
He says it’s got an “incredible” market cap — $489m — for a company that made just $3.8m in commercial product sales in the half (the rest came from a clinical trial tie-up with the US Biomedical Advanced Research and Development Authority).