This ASX Stock is Almost at Our BUY Price
After surging to almost $1.50, one of our long term portfolio companies, MyFiziq Ltd (ASX: MYQ), has just dipped close to our most recent entry price.
We believe the current MYQ share price provides an attractive entry point for new investors given that in the last four weeks MYQ has:
- Completed a $5M capital raise at $1.20 per share;
- Signed a US$3.58M annual revenue binding term sheet;
- Signed a US investment bank for a NASDAQ listing in 2021.
We increased our position in MYQ at around these share price levels last month.
MYQ has developed a patented application that allows an individual to accurately track the dimensions of their body directly from a smartphone.
Health organisations and insurance companies have adopted MYQ’s tech as a means to help their clients and customers achieve optimum health targets.
We took a position and have followed MYQ since April this year when it was just 11.5c. We then doubled down at 83c and the company soared as high as $1.49.
Following the completion of a capital raise from sophisticated investors of $5M at $1.20 per share, the company is now turning its focus on its proposed NASDAQ listing.
MYQ has engaged US based investment bank Ladenburg Thalmann & Co. Inc. as lead underwriter to its proposed NASDAQ IPO.
In the much bigger US market, that is more familiar with the potential upside of healthtech companies, MYQ’s ASX shareholders that invest now could be rewarded once the US listing is completed.
MYQ has also signed a number of recent deals which should push the company into profitability in the coming months.
MYQ requires 140,000 users paying US$1.50 per month to break even. A quick scan of their most recent deals shows this to be well within reach:
- Nexus-Vita - Initial Target users of 100,000, minimum annual revenue to MYQ of US$3.58M from date of commercial launch (due Jan 2021);
- Jayex Healthcare (ASX: JHL) - Initial target of 1,000,000 users - starts Q1 of 2021;
- Biomorphik - Initial user target of 100,000 - release date Q4 2020.
Plus numerous other deals expected to grow MYQ’s user base throughout 2021.
This all complements MYQ’s launched partnerships with Evolt and Bearn (400,000 initial user target) - which has MYQ technology available on both the Apple App Store and Google Play Store.
What is going on in the broader health tech space?
Teledoc is merging with Livongo Health in an $18.5BN deal that will create a leader in consumer-centred virtual health care. Meanwhile Google and Fitbit combined to monetise health data, when Google purchased the original wearable giant for $2BN.
Amazon has also moved into 3D body scans and announced Halo, a fitness band and app that scans your body and voice, and even IBM and Samsung are getting in on the health tech trend.
This is a sign that this kind of technology and data has created serious interest with big tech companies and investors, including Robinhood investors who have been driving the growth of NASDAQ listed health and tech stocks.
We are holding MYQ long term because we see additional upside in the company, particularly as COVID continues to highlight the benefits of technology, including health-tech in what has now been dubbed “the new normal”.
MYQ’s current market cap could prove to be just the beginning – especially ahead of a NASDAQ listing and wider exposure to US investors.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
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