Portfolio Update: Small Cap Stocks
In my summary of the last quarter I mentioned I was avoiding small cap stocks. I thought it prudent to update that is no longer the case.
I see a number of opportunities for some companies that are worth holding at the moment - although my positions remain smaller than normal. All these companies are in the new technology / biotech industries while I continue to be bearish on any small cap resource stocks. All three companies mentioned below are also in a strong cash position given their relative market capitalisation which puts them in a strong position to withstand global issues and any short-term set backs.
Tissue Therapies
I have mentioned Tissue Therapies (TIS) a number of times on this site and their revolutionary wound healing product (VitroGrow). The companies most recent announcement highlights that they expect a commercial partnership deal by the end of this month.
The company has previously made forward looking timelines for reaching a commercialisation deal -- all which have come and gone. In this instance however, the company appears more confident than ever. They have also had a string of good news; Successful FDA Classification of VitroGrow and continued excellent EU Clinical Trial Results. In order to meet their target of initial sales in H1 next calendar year a commercial deal needs to be signed.
Brain Resource
BRC have secured funding on very good terms (bonds that convert $at 0.40 / share, while current price is $0.25) with a well funded partner. In a further sign of the strong relationship, BRC has formed a joint venture that will be jointly funded to exploit the ADHD market opportunities identified by the company. The blue sky potential for BRC is many multiples of the current market cap, providing this a good speculative buying opportunity for the medium term.
Anteo Diagnositics
I have been following and trading ADO for almost 12 months, but haven't written a detailed post on the potential. I plan on rectifying that at some point, however the company also appears poised to sign a company making deal in the near term. The potential target market (IVD) is valued at $10b per annum, so any deal will transform this ~$50m company.
While it's difficult to say when exactly a large commercial deal will be signed, the company's recent presentation mentions IVD companies are undertaking real time stability testing. This indicates the companies believe the product will be deployed across their product range, but are ensuring the shelf life will be suitable. Accordingly, it appears just a matter of time before a deal is secured.
Other
There's another exciting company I'm currently researching that services the medical industry. I hope to publish a detailed post in the coming week once I've had a chance to collate my notes.