Small Cap Favourites: Ellex Medical Lasers Limited
Ellex is up around 18% in two weeks since publishing our Hot Note to Invast clients on 1 July.* The stock is one of our favourite small cap businesses and Invast has been following it since late 2013 when we first launched in the Australian market. The share price has tripled since we last came across the business and spoke to the company CEO about future growth plans.* Only Invast clients get Hot Notes (immediate trading recommendations).
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In our Hot Note published on 1 July we said “…Since then, ELX shares have risen from about $0.30 to slightly over $1.00. They have recently pulled back to the mid $0.90 range and we see this as another buying opportunity. ELX is an Australian success story out of South Australia. It has a proven track record, commercial sales and an impressive executive team on board.
It operates in the ophthalmic space and we at Invast are a firm believer that general eye disease will only increase in prevalence over the next few decades as smart phones and LCD screens attract more and more attention in everyday life. The business is capitalised at around the $100m mark. That might seem high for local investors, but compared to similar valuations for European and US stocks First half revenue was almost $35m. Based on this, the stock is trading at a fraction of what international peers would. The potential is real, it will take time to rerate but we continue to stay at firm believer. Buy sub $1…”
We continue to watch the stock closely and will update Invast clients on trading levels in the coming weeks. Recent news around Chinese FDA approval for ophthalmic laser treatments means we might need to review our revenue and earnings assumption numbers (with upside potential).
Invast is very well placed to bring you some huge opportunities in the coming months. Execution costs for ASX stocks are 0.06% (6 basis points) above minimum charge, which means for a trade with a notional exposure of AUD 10,000, the applicable commission is only AUD 6.00.
To be onboard with the full set of benefits, you need to become an Invast client.
Chief Market Analyst
Peter Esho is a member of Invast’s Investment Committee and Chief Market Analyst at Invast Financial Services in Australia. The Invast’s Investment Committee constructs professionally constructed global thematic portfolios of Direct Market Access (DMA) CFDs over highly liquid global shares and ETFs through its new PortfolioInvestor platform. Since 1960, the Invast Group has grown to become one of the largest and most successful global brokerage firms, offering state-of-the-art trading technology and unparalleled service catering to all levels of traders.
Invast Financial Services Pty Ltd (ABN 48 162 400 035) is regulated by the Australian Securities and Investments Commission and holds an AFS Licence 438283 which authorises it to carry on a financial services business in Australia.