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Two Penny stocks you may consider buying at an early stage for higher returns

Team Veye | 20 Apr 2018 ASX - PIQ, XTD
Two Penny stocks you may consider buying at an early stage for higher returns

Proteomics International Laboratories Ltd (ASX:PIQ)

The company declared its H1 FY2018 results on 16th Feb’18 highlighting a weak performance across key metrics. The company announced that its Revenue during the period stood at $449,000 down 17%, Loss from ordinary activities after Tax attributable stood at $1.3m up 39%. The decrease in revenue reflected resources being diverted to the pending launch of the PromarkerD diagnostic test allied with normal variation in the timing of analytical services contracts. Operating expenditure was in-line with budget and consistent with FY17, with additional one-off due diligence expenses incurred in relation to securing the strategic alliance with CPR Pharma Services. On 5th Mar’18, the company announced completing investment in CPR Pharma Services followed by another major announcement on 7th Mar’18 around the much awaited launch of PromarkerD in Dominican Republic. PromarkerD is the world leading predictive diagnostic test for diabetic kidney disease, launched in Dominican Republic. In clinical studies the PromarkerD test predicted 86% of previously disease-free patients who went on to develop chronic kidney disease within four years. In Mar’17, Frost & Sullivan identified PromarkerD as the world's leading test for diabetic kidney disease. The Company expected to be in a position to update the market on further licensing deals in the near future. On 14th Mar’18, Proteomics secured underwriting – PIQ Options exercised to raise $3.4 million. On 19th Apr’18, yesterday, European PromarkerD patent granted for diabetic kidney disease covering 400 million people. The European patent complements those already granted in the USA, Australia, Singapore, Russia, China and Japan. Patents remain pending in other major global jurisdictions for both diabetic and other forms of kidney disease (Data Source – Company Reports).

 

Financials

The company’s EBITD margin stands at -107.70. The Debt-to-Equity ratio is 240.26 against a sector average of only 14.18. The stock has a Market cap of 13.63m & a Share Volume of 66.48m. The stock price of the company after gaining 62% between Nov’17 and Jan’18 has slipped 38% until now but it definitely seems to have the upside potential on the back of patents it has on its Promarker D predictive diagnostic test.  (Data Source – Reuters.com).

 

Veye’s Take    

We give a “Speculative Buy” to “Proteomics International Laboratories Ltd” at the current price of $0.21

 

 

XTD Ltd (ASX:XTD)

The company declared its H1 FY2018 results on 28th Feb’18 highlighting a weak performance across key metrics. The company announced that its revenues for H1FY2018 were down 8% on the corresponding FY2017 period. Cash and cash equivalents as at 31st Dec’17 were $2,338,399, up from $1,830,292 at 30th Jun’17. Overall 2017 saw a downturn of 5% in advertising revenue on Rail formats as reported by APN Outdoor in their annual report released on 19 February 2018. Industry body, the OMA is predicting growth in the Australian market of 6% in the calendar year 2018. Subsequent to executing a renewal of its contract with APN Outdoor in Jun’17, XTD has successfully completed a migration of content delivery technology across our network to align our screens to the Scala platform used by APN Outdoor. This ensures more timely and responsive distribution of content to the national XTrackTV network reaching millions of Australian commuters every day. XTD’s relationship with APN Outdoor will continue to address this rapidly growing market sector. On 8th Mar’18, announced the proposed share acquisition of the 63% interest in technology company Contact Light Pty Ltd (Acquisition). Following completion of the Acquisition, Contact Light will become a wholly-owned subsidiary of XTD. The Acquisition follows a strategic review that XTD’s Board has been undertaking since Nov’17, focusing on operations, personnel and potential future revenue streams. The acquisition of Contact Light will dramatically strengthen XTD's market positioning by adding Contact Light's world-first suite of technologies and Smart Cities innovation to the Company’s market leading cross-track digital media systems for transit environments, which are operating in Melbourne and Brisbane. XTD plans to rapidly accelerate the commercialisation of Contact Light’s opportunities in the complementary areas of advertising and Smart Cities solutions once the Acquisition is completed. On 19th Apr’18, Smart Cities software developer Contact Light signed a collaboration agreement with global technology company IBM. Contact Light is the technology subsidiary of digital transit media company XTD Ltd. Under the agreement, IBM and Contact Light will collaborate to create and market solutions which combine IBM Cloud and various Software as a Service (SaaS) offerings together with Contact Light’s Smart Cities digital solutions. But the Contact Light acquisition is subject to shareholder approval, which will be sought at a general meeting in late May’18 (Data Source – Company Reports).

 

Financials

The company’s EBITD margin stands at -62.78. The Debt-to-Equity ratio is 0.00 against a sector average of only 30.80. The stock has a Market cap of 4m & a Share Volume of 147.99m. The stock price of the company has gained 44% in just one day after signing of a collaboration agreement between Contact Light Smart Cities and IBM but the future of XTD Ltd completely depends on the shareholder approval around the acquisition of Contact Light due to be taken in late May’18(Data Source – Reuters.com).

 

Veye’s Take    

We give a “Speculative Buy” to “XTD Ltd” at the current price of $0.039

Disclaimer

Veye Pty Ltd (ABN 58 623 120 865) authorised representative (AR No. 001261006) of Vested Equities Pty Ltd which holds an Australian Financial Services License (AFSL No. 478987). Veye is authorised to share only generic financial views through its website, reports and newsletters without taking into consideration your personal financial needs or investment objectives. Although Veye takes the utmost care to ensure the accuracy of the content and that the information is gathered and processed from reliable resources, it is recommended you seek professional advice from your financial advisor or stockbroker before acting on any of our recommendations. Veye Pty Ltd advises it’s users to pursue investing as a long-term goal. Stocks are subject to real time changes therefore all the information we share represents our views at the date of publishing and we request our readers not to interpret our reports as direct recommendations. Past performance is no indication of potential future performance. The securities and financial products we study and share information on in Veye Reports may have a product disclosure statement or other offer document associated with them. You should obtain a copy of these documents before making any decision about acquiring the security or product. You can refer to our Terms & Conditions and Financial Services Guide for more information. Veye Pty Ltd confirms that the employees and/or associates of Veye Pty Ltd do not hold positions in any of the financial products covered on the website on the date of publishing this report (as mentioned on the website www.veye.com.au).