Guy le Page
Director, RM Corporate Finance
Our Guy le Page reckons there are two bright spots on the horizon at the moment.
Uranium hit a 52-week high closing at US$54.38/lb, up 50 cents on the week, while lithium prices in China have stabilised and rebounded to above RMB200K/tonne in response to the improving demand outlook, restocking by downstream cathode producers and failed negotiations with spodumene producers which were unsuccessful in achieving lower prices.
Macquarie (May 2023) are confident of a rebound in lithium carbonate prices to RMB250-300K/t.
Cathode material production schedules in China also appear to be back on track according to Morgan Stanley in terms of monthly actual production/production schedules of cathode materials which were around ~50% of capacity in 1Q23, 50-60% in April, and forecast to be 70-80% in May and 100% in June when compared with average levels seen in 4Q22.
And despite gold on the retreat 1.8%, it’s still in and around that US$2,000/oz mark.
Staying on gold, Guy’s pick this week is West African gold developer Predictive Discovery (ASX: PDI) which he picked up back in January 2022, and like many gold explorers/developers, the share price has drifted back and is now sitting at 15 cents despite kicking some serious goals at its Bankan Project which has included in excess of 80,000m of RC and diamond drilling over the preceding 12 months.
At some stage, he reckons, we should see a rotation of funds out of lithium and rare earth plays back into small and mid-cap gold explorers/developers.
The company, led by former Centamin (LSE:CEY, TSX:CEE) CEO director Andrew Pardey, has just received commitments for a $40 million placement at 15 cents per share with the proceeds to be applied to its flagship Bankan Project.
Not a bad effort given the current sentiment towards the gold sector in general with the placement being undertaken at a modest 5% discount.
Gregg Taylor
Director of Equities and portfolio manager, Salter Brothers
Taylor is bullish on ASX-listed medtech players in the small cap space, particularly because they’re not getting a lot of love from investors, he says.
“A lot of investors are risk-adverse and focusing on the mainstream defensive assets so I think the current environment creates an exciting opportunity in the medical technology space within small caps,” Taylor remarked.
“There’s significant opportunity for investors with a medium to long-term view.”
He’s got his eye on Nova Eye Medical (ASX:EYE) (great ticker btw), which is tackling two of the biggest diseases leading to blindness – glaucoma and macular degeneration.
In late March Nova Eye Medical achieved US FDA clearance for its updated iTrack surgical device to treat glaucoma and now the company has officially launched the treatment in the USA.
Nuheara (ASX:NUH): The ~$20m market-capped Nuheara is a significant player in self-fitting hearing devices and has partnerships with HP, CVS (a leading US pharma group) and Best Buys and more.
Taylor noted NUH has US FDA approval, is manufacturing thousands of the devices and has partnerships with major distributors in the US market.
“They’ve got a strategic investor called Realtek who owns just on 20% of their company which is a massive Taiwanese semiconductor company,” he said.
“Nuheara use their semiconductors in their devices and they’ve been helping scale this opportunity.”
Taylor’s last med-tech tip comes in the form of health communication company MedAdvisor (ASX:MDR) which has a market cap of ~$130m and is a major player in both Australia and the US.
At a simple level, MedAdvisor’s local platform reminds patients (via mobile software application or text) to take their meds.
The company has deals with Chemist Warehouse, Amcal, Guardian, Terry White, Pharmasave and National Pharmacies.
“It’s all about digital medication management and decluttering the medical system and enabling scripts to be digitally received and then delivered,” he said.
Taylor said MDR have almost a monopoly with 70% market share in Australia and a very significant market share over in the US.
Tim Boreham
Stockhead resident Tim Boreham is also keen on health tech – one in particular, that should warm investors’ hearts.
EBR Systems (ASX:EBR) last week revealed its 183-patient pivotal study for its Wise device, as in ‘wireless stimulation endocardially’, which passed all key efficacy and safety hurdles.
Wise is an implantable cardiac system to provide left ventricle pacing stimulation, in conjunction with a co-implanted system that provides right ventricular stimulation.
“It is the most significant accomplishment in our company’s history and it puts us on the path to [US Food and Drug Administration] approval and commercialisation,” EBR chief John McCutcheon says.
Boreham’s diagnosis is that game-changing medical devices that help with heart disease – one of our biggest killers – are something worth looking into.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.