PNV - Polynovo Limited

[Greynomad99]

I’ve been watching PNV recently because it has fallen to a point that could be a turning point. For those not into charting don’t bother reading on as it is largely musing about what various theories suggest for PNV’s short term outlook.

Is it a buy for me? Not yet as it has been in a technical weekly downtrend since the start of this year and while downtrends don’t last forever, they suggest further falls are more likely than the alternative. Price needs to break above the downtrend line on the chart to change this outlook.

There is a strong level of resistance at $2.04 that price recently bounced off. If price moves back down to break this level, further falls could be expected. The next stop down (and one that has some analysis that suggests it is the bottom) is $1.75. This level is a 161.8% Fibonacci retracement of what I see as possibly Wave B (Elliott Wave Theory).

One worrying aspect of the chart (were I a holder) would be that price has made a lower weekly peak followed by a lower trough this week. These are only small moves but a sign of weakness nevertheless.

There are suggestions that the $2.04 low will hold in that the blue dashed line is a line of support that has held under price for 3 years. The probability that this support will be broken isn’t good (except for those who bought on the bounce). Interestingly, if price did fall through $2.04 with any volume then that would give a target of $1.76 for a short term fall.

The red dashed horizontal lines are calculated levels of natural support and resistance.

Summary: PNV’s current fall may have ended but support for that view is not as strong as a further fall to $1.75

And remember, the above is just theory, not a prediction of an outcome – just an educated guess based on chart patterns.

 

[Greynomad99]

Continuing on from my comments above I also commented on PNV's outlook 6 months ago. I keep these posts so as to see how my analyis pans out in reality. These historical posts for all stocks commented on over the past 3 months appear in alpha order but can be resorted in date order (to find my latest musings) by clicking at the top of the date column. PNV's thread is here: https://sharecharting.com.au/stock-commentary-blog/263-pnv-29-january-2021
As for my January analysis it was non-commital but suggested price could fall and a buy would have been high risk. Price fell back a little and then rose. As the preceding fall fell short of ocnfirming a technical downtrend, by definition, price remained in a technical uptrend, and once it made a higher high it would have been a buy signal. A buy then however would have been just as price reached the downtrend line on today's chart (which wasn't yet showing in the price action) and fell strongly. That fall broke a support level and made a lower target of $1.78 - which is the same as the targets in my post above, making said target more likely (but never guaranteed). You may not some slight differences in the two charts as the price channel lower boundary and the blue dashed support line have both be redrawn based on the intervening 6 months data.
The mid-April false buy signal reminds me to never accept an optomistic outlook as gospel and always have your stop loss in place.
Would I have bought on that April move up? Probably not because my Elliott Wave analysis (the 1 to 5 red numbers on the recent chart) would have meant price was falling out of Wave 5 at that time - which isn't a place to buy. Elliott Wave might suggest that price could rise from a point between current price and my lower target of around $1.70. If so it could be expected (according to theory) to rise back up to about $3.50 before collapsing significantly. That said, the Elliott Wave structure is not compelling with PNV as the wave counts are unclear.

 

[Knobby22]

Breakeven (excluding non cash expenses)- Worth reading whole report.

New factory commissioned.
Warehouses located around the world to service promptly medical needs. located in US, New Zealand, Australia Singapore Belgium England.
Hernia product now in preclinical trials. New products to be released (for small wounds).
Flinders University Leg Ulcer trial recruitment continuing.

From report:

The company is pleased to report we have reached breakeven/profit, excluding non-cash expenses.
This significant milestone has been achieved with strong sales growth and significant investment in sales personnel.
Audited results were a net loss after income tax of $4.61m (2020 $4.19m) but this includes $2.63m in share-based payments expense ($2.63m), unrealised foreign exchange losses ($1.12m), and depreciation & amortisation ($1.12m).
Total revenue of $29.34m includes: • NovoSorb BTM of $25.51m up 33.8% on the prior year
• Revenue from the BARDA clinical trial program of $3.65m up 18.1% on the prior year
• As at 30 June 2021, the Company held $7.69m in cash and short-term investments. COVID had a significant impact on hospital trauma, burn and elective surgery activity. Notwithstanding limited hospital access, lockdowns, and travel restrictions, we adapted our business and had continued material sales growth globally and notably in the US with BTM sales up by 49% in $US and distributor sales up by 53.1%.

 

[galumay]

The company is pleased to report we have reached breakeven/profit, excluding non-cash expenses.

Here we go again, so the actual loss is up slightly from last FY, but by some bull**** accounting they are claiming to be profitable in their presentation?

As you note, Loss was actually $4.6m up from a loss of $4.2m last FY.

Its poor corporate behaviour, especially with a large graphic in the presso promoting the "Profit*".

Its why I always open the Financial Report first, skip the commentary and go straight to the Income Statement, Balance Sheet, and Cash Flow Statement, then back to the commentary and finally to the Presentation. (if I am still interested!)

 

[Knobby22]

I did make it clear.
I am expectimg the growth will increase as covid restrictions worldwide ease and more elective surgery can take place.

Now the factory is commissioned and warehousing complete thete should be no other constraints.

 

[galumay]

I wasn't having a go at you Knobby22, just quoting the point from the presso. I realise you made it clearer than the company did!

 

[Knobby22]

My pick for the month.
Overshot.
Agm at the end of October will rekindle enthusiasm.

 

[qldfrog]

good bones !
popping up frequently in my systems..I let them decide but sounds a fair go

 

[UMike]

I’ve been watching PNV recently because it has fallen to a point that could be a turning point. ........
There is a strong level of resistance at $2.04 that price recently bounced off. If price moves back down to break this level, further falls could be expected. The next stop down (and one that has some analysis that suggests it is the bottom) is $1.75. This level is a 161.8% Fibonacci retracement of what I see as possibly Wave B (Elliott Wave Theory).
......
There are suggestions that the $2.04 low will hold in that the blue dashed line is a line of support that has held under price for 3 years. The probability that this support will be broken isn’t good (except for those who bought on the bounce). Interestingly, if price did fall through $2.04 with any volume then that would give a target of $1.76 for a short term fall.

Steadily moving down and now through the $1.7 mark. with a 1-3 buy sell ratio.

Got the Falling Knife look about it.

 

[Miner]

Is this just a begining of a great fall ?

5th Nov - MD resigned (or sacked) - Read this line - excellent opportunity (Ha Ha) or face-saving

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02448246-3A580388?access_token=83ff96335c2d45a094df02a206a39ff4

29 Sept gave a rosy picture on trading update - Envious (I tried to smell fish but all appeared to be cleaned)

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02444440-3A579765?access_token=83ff96335c2d45a094df02a206a39ff4

5 Sept - was the beginning of stress - the Ace of the pack of cards the COO, left the company in doldrum

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02419952-3A575539?access_token=83ff96335c2d45a094df02a206a39ff4

I will be eyeing on the conference paper to be officially released tomorrow 9th Nov - who wrote that originally however and who amended

https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02447987-3A580347?access_token=83ff96335c2d45a094df02a206a39ff4

 

[UMike]

Hope fully nearing the end of a down trend.
Would like to think $1.4 is support.
But is a long term turnaround story.

 

[Knobby22]

Hope fully nearing the end of a down trend.
Would like to think $1.4 is support.
But is a long term turnaround story.

My pick this year as Covid will be over, heaps of operations required, people back in hospital, new CEO, expect 100% growth or I will be very disappointed. Out of favour. In favour last year (+ issues with the new hernia treatment sticking) which is why I didn't pick it.
Waiting to lose my bet with Gulamay though.

 

[UMike]

Yea....Will need to go up 100% to make up for my 40% first lot deficit.
Hoping health stocks do get a lift this year.

 

[Knobby22]

That's better. Nice 25% rise today at this time.

Record US Sales December and Q2 PNV today announced selected unaudited trading results for the half year ended 31 December 2021.
US Market US sales for December (ex Barda) were a record A$3.40m / US$2.43m up 76% on Same Time Last Year of A$1.93m
US$1.45m. Monthly US sales for December significantly exceeded US$2m for first time. With the excellent US sales results for October and November the US Q2 results were a record A$8.06m / US$ 5.86m up 105% on STLY of A$3.92m
US$2.89m. Quarterly US sales for Q2 significantly exceeded US$5m for the first time. YTD sales in the US are AU$14.20m
US$10.38m up 58% STLY. There is some strong quarter on quarter momentum with Q2 US sales A$8.06m / US$5.86m up 31% on Q1 A$6.14m / US$4.52m.

There were 16 new accounts added in Q1 and a further 19 added in Q2 bringing total US accounts to 154. There is an intention to increase the size of the US sales team, and a further 10 reps are being recruited to expand coverage across key cities and regions

 

[finicky]

Don't follow it but will go back over the thread.
Early to be sure, but at least on the Daily chart PNV has broken above its downtrend resistance on strong volume. We can also see the two momentum indicators have been signalling with positive divergence of their lows to the decine in price.

2 Year Daily

 

[Dona Ferentes]

The Chairman of PolyNovo, David Williams said:

"While US sales are very encouraging, there is more to achieve as we still have new sales staff being onboarded and more staff to be employed. In addition, we are retraining existing staff to follow surgeon leads using the product in new indications. While the US is the engine room of our growth in the immediate future, there are many opportunities in the rest of the world where we are just starting out."

It sounds very old-school, Dependent on calibre of the sales staff to get out there and pitch/ sell. And to get the attention of end-users.

 

[UMike]

Record sales.
Lets hope this is the turn around story of this falling knife.

https://cdn-api.markitdigital.com/apiman-gateway/CommSec/commsec-node-api/1.0/event/document/1410-02507444-2926SA22JBPMGPQBJDN2CU644T/pdf?access_token=0007IaNeGCcxkbHN0r76OWkM09Lg

 

[debtfree]

Going by the weekly chart PNV is certainly heading in the right direction at the moment.
Downtrend broken, MAs have crossed over, Volatility to the upside is happening, stronger than the XAO for the last 2 months. Will it continue ... only time will tell.

 

[Dona Ferentes]

PNV has announced the appointment of Johnson & Johnson senior leader Swami Raote as its next CEO. This follows the resignation of former managing director Paul Brennan from the top job in November last year.

"I am very excited about the potential of PolyNovo’s technology and its ability to impact patient outcomes across world. In my 30-plus years in healthcare, I have never seen such an impressive technology combined with very attractive financial metrics,” he said in a statement to the ASX.

“PolyNovo has all the elements needed to build a truly global and very large Australian life sciences multinational along the lines of a number of other Australian success stories. It was this potential that brought me out of retirement.”

Mr Raote, who is 58, had spent 30-years working across the Johnson & Johnson business, and most recently was worldwide president for its Vision Care business, which employs 5600 people in 120 countries.

PNV has been a target of short sellers, with shorts making up more than 11 per cent of the float in May and June, but this has dropped back to around 8 per cent recently.

The company has a $1 billion market capitalisation

 

[bk1]

Can it keep above $1.60 this time?