MoneyTalks: Could this ASX medtech stock become the next Cochlear?
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MoneyTalks is Stockhead’s regular recap of the ASX stocks and sectors that fund managers and analysts are looking at right now.
Today we hear from Hugh Pilgrim at Mac Equity Partners.
Speaking with Stockhead from Perth last week, Pilgrim tipped three stocks one of which was a medtech tipped as “one of the next Aussie success stories”, similar to Cochlear.
In relation to this company, which makes portable brain scanners which can detect stroke and other brain injuries, Pilgrim declared: “We feel that EMvision is going to be one of those Aussie success stories similar to Cochlear (ASX:COH), Resmed (ASX:RMD) and Nanosonics (ASX:NAN).”
Its chief Ron Weinberger is an alumni of the latter.
“Ron is well known for taking Nanosonics from a micro cap to quite a large medtech company and we feel like he’s going to do a very similar job with EMvision,” Pilgrim said.
“The thematic is growing as well – stroke is the second-largest killer in Australia at the moment – and as we have an ageing population rapid diagnosis is important, not just in Australia but all the world.”
Last October the company carried out a pilot clinical trial showing up to 96 per cent accuracy in diagnosing two different types of stroke and last week entered a trading halt pending an announcement it would share in a $40 million grant won by the Australian Stroke Alliance.
While FDA approval currently eludes it, Pilgrim says this is not far off. The company has consulted with the FDA and received feedback about what must happen to obtain approval.
“That’s what the next set of trials will be (about) – essentially taking the FDA feedback and deliver the result needed for FDA approval. They’re hoping to kick off those trials in the second half of the year sometime,” he said.
Similar to EMvision, King Island has gone on a run in recent months, particularly since it won a $10 million loan from the Tasmanian government.
As its name implies, its project is on King Island off the coast of Tasmania and is prospective for tungsten mineral scheelite.
Pilgrim said tungsten is a good place to be in right now.
“We’ve always like the space and the macro setting in the sense that like rare earths, tungsten is a critical metal and has been for a long time,” he said.
“US, Europe, Russia, Japan classify it as one of the most important elements and all have strategic stockpiles.”
Another advantage for the company is that its project has previously been an operating mine but was closed in 1992 – which means it knows what it’s working with.
Pilgrim also pointed out that all environmental approvals were completed, offtake agreements mean that 70 per cent of the product was forward sold and if the Tasmanian government loan wasn’t enough, Canberra may come to the table too.
“The AFR reported it’s up for a $15m grant from the federal government out of the manufacturing initiative,” he told Stockhead.
“So (we’re) hoping potentially they may receive that which would go a long way in getting the mine re-started.”
This company has feet in multiple commodities including gold, manganese and copper.
But Pilgrim is most bullish about the latter of these.
“(The) copper price has gone from $2.50 per pound to $4.20 in last six months and that’s off the back of Biden’s Green New Deal – (a) $1 trillion investment into renewable energy space,” he told Stockhead.
“Which is going to require a lot of copper and there has been a lack of investment in copper exploration in the last 10 years due to the depressed copper price.
“The copper price has run on strength and we think the funds will start flowing into the copper explorers like it did with gold.”
“It’s a known geological setting for VMS style copper deposits and we feel they’re potentially on the road to a major discovery,” he declared.
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