The White Whale of the ASX
Fair to say its not an easy book to read. In my youth, I tackled some of the classics, mainly because I had to, I did English Literature at school back in 1980 and Melville’s classic was always one that proved just too hard to get into. I have watched the film and know the story but finding Moby is not an easy task. Similarly finding a ten bagger is not an easy task either. I feel like Captain Ahab currently, striding the ocean of ASX stocks and looking for that elusive White Whale. Like Ahab I know its out there and I know where to look but still its not easy. The search will continue.
My current thinking is to find a $40-50m market cap company that is on the cusp of a game changing year. Going from $50m to $500m seems far more likely that going from $1bn to $10bn in market cap. Course there is always APT and the US version Tesla.
I got an email from a subscriber suggesting Clinuvel (ASX: CUV) as one potential ten bagger.
CUV has an approved treatment for a rare metabolic disorder causing lifelong light intolerance. SCENESSE is the headline product from CUV. Not a fan of anything that cures a rare disorder from a market point of view anyway.
The normal MO is to focus on one drug treatment and use that as a springboard to leverage its use in other diseases and advance other drugs from the building blocks of the initial focus. This certainly seems to be CUV’s game plan. But it takes time. It took ten years to get to where they are today.
- The first product line to be released in 2021 offers polychromatic protection for extreme conditions, targeting populations at risk of solar and high energy visible (HEV) light insult.
- The second product line aims to provide DNA protection and repair in individuals at risk of solar damage and specific high-risk populations. Awareness of the healthcare risk is relatively high among these users.
The company is the first to admit that whilst orphan drug markets are exciting and make a real difference to lives, they do not provide visibility (money really) due to the small size of the market. The company is hoping the next phase of growth will be more relevant to a bigger market.
The ‘DNA Repair Program’ is key to this as its addressable market is almost all fair-skinned people.
Here is the company timeline for 2021.
- Strong balance sheet
- Proven management and model of product development
- Approved treatment generating cash.
- Pipeline of new treatments and a focus on larger addressable markets.
It is not Moby Dick I am afraid, but none the less 2021 could be a good year as the company leverages SCENESSE. Certainly, a speculative buy. $1bn market cap, so not huge. Seems to be out and about talking itself up, part of reaching a wider audience.
Here is the Stock Box
Last year we caught both Tesserent Ltd (ASX: TNT) (up 839%) and WhiteHawk (ASX: WHK) (up 141%) well with strong multi bag gains. When you ask the question on what are the sexy sectors, Cyber and AI come up.
Here is the ocean to hunt for the White Whale in these sectors.
- 5G Networks (ASX: 5GN)
- Nan Nan Resources Enterprise (ASX: AR9)
- Camden Property Trist (ASX: CPT)
- Elsight (ASX: ELS)
- Future First Technologies (ASX: FFT)
- Family Zone Cyber Safety Ltd (ASX: FZO)
- Houston We Have (ASX: HWH)
- Pros Holdings (ASX: PRO)
- Senetas Corp (ASX: SEN)
- Sovereign Cloud Holdings (ASX: SOV)
- Sparton Corp (ASX: SPA)
- Tesserent Ltd (ASX: TNT)
- Vordere PLC (ASX: VOR)
- WhiteHawk Ltd (ASX: WHK)
- Alcidion Group Ltd (ASX: ALC)
- Bill Identity Ltd (ASX: BID)
- Brainchip Holdings (ASX: BRN)
- Bigtincan Holdings (ASX: BTH)
- Crowd Media Holdings Ltd (ASX: CM8)
- Fargo Enterprises (ASX: FGO)
- Gooroo Ventures (ASX: GOO)
- Livetiles Ltd (ASX: LVT)
- Mach7 Technologies Ltd (ASX: M7T)
- Medibio Ltd (ASX: MEB)
- Pleasure Group Limited (ASX: PX1)
- West Red Lake Gold Mines Inc (ASX: RLG)
- Spectur Ltd (ASX: SP3)
- Volpara Health Technologies (ASX: VHT)
- Weebit Nano Ltd (ASX: WBT)
There are other oceans. The hunt continues.
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