Marcus Today Stock Market Insights – ISX & PNV
Some recent success stories in Small Caps
Two recent successes in iSignthis Ltd (ISX) and PolyNovo (PNV).
Results this week have galvanised ISX – a know-your-customer (KYC) provider of ID authentication – and it hit new all-time highs of 121.5c. The recent deal it has done with Visa has been the power behind the rally. We first recommended this one at 37c back in early May, as a way to benefit from the Buy-Now-Pay-Later (BNPL) boom. Legislation and regulatory authorities are clamping down and all the BNPL providers need to ensure adequate ID checks. ISX seemed to be a big part of the puzzle and we recommended for its exposure to the sector. We have been taking profits along the way and recently exited in the Small Cap Portfolio. Other subscribers have continued to hold for a 3 bagger.
Another great success has been our recommendation for PolyNovo (PNV). This is an emerging biotech company which uses a product called NovoSorb to build a scaffold around skin trauma to aid recovery and rehabilitation. Revenues have been increasing and the company has been expanding from its US focus to Europe and Asia. We have held this one in the Small Cap portfolio for a little longer and entered at 50c. Again, we have taken profits along the way with a final sale of the position at 201c. A 4 bagger.
In both these cases, we continue to be bullish on the stories. There is good growth ahead for both but we decided that the valuations had departed from reality. Both have market caps of over $1.2bn and, as yet, very low revenue. It was purely on the valuation case that we took the profits. It is not every day that you pick a 3 or 4 bagger.
The trick now is to find two more.