According to a recent survey in the Redeye investor community, the perceived knowledge of five companies in the area of Fight cancer is low, at the same time as expectations on catalyst news are high, especially regarding test results and strategic contracts/collaborations.
For the five participating companies, all active in the area of Immuno-oncology, the average number of investors stating their knowledge of a company is good or very good is a mere 16.6%, ranging from 10.4% for Sprint Bioscience to 21.4% for Immunicum:
|2. Bioinvent International||20.7%|
|3. WNT Research||19.2%|
|5. Sprint Bioscience||10.4%|
We can see a strong correlation between knowledge of a company and the tendency to recommend the company as an attractive investment case. Of the respondents with good or very good knowledge 65%, on average, would recommend a company compared to only 10% of those with none or some knowledge. To increase the level of knowledge among investors is thus key to create a positive sentiment around the company.
- Today, with as many as 150 Life Science companies on the Swedish stock exchanges there is a fierce competition for the attention of the investors. At the same time, there is a reluctance among traditional media to cover these companies, other than at times of major breakthroughs in terms of contracts or test results, comments Thomas Nyberg, responsible for Investor surveys at Redeye.
High expectations on test results and strategic contracts
Overall, there are high expectations among the Redeye members on test results and strategic collaborations for these companies. On the question “Which catalysts do you believe are very likely to come into effect for the company during the coming six months?” we see the following average expectations on the companies in this survey:
|1. Test results or product launches||73.4%|
|2. Strategic sales contracts and collaborations||49.9%|
|3. Patent approvals||32.5%|
|5. Major insider trades||17.4%|
- High expectations are both positive and negative. It creates share momentum at the same time as we see strong market reactions when expectations are not met or progress is delayed. To keep track of and manage expectations is thus vital for these companies to avoid negative and volatile sentiments, says Thomas Nyberg.
Company strengths and weaknesses
On the question ”Which of the following factors do you believe to be the company’s key strengths? the top three overall company qualities (of 17) are as follows:
|1. Credible long-term vision and strategy||36.1%|
|2. Innovative technology and/or product||33.6%|
|3. Trustworthy and competent management||29.0%|
|4. Strong product pipeline with attractive growth potential||27.6%|
|5. Products/services that are morally attractive||20.3%|
It is evident that the attractiveness of this group of companies is based on the combination of competent management and innovative products. Not surprisingly, the financial aspects are generally rated very low by the Redeye members. We can see slight differences depending on the type of investor. Younger investors (age 18-34) have a tendency to value aspects related to market position and business model, whereas the older investor segment (55+) place higher importance on the people running the company, and that they have a big ownership stake.
Facts about the survey
Survey duration: Nov 9, 2016 through Jan 4, 2017.
Participating companies: Bioinvent International, Cantargia, Immunicum, Sprint Bioscience and WNT Research.
Methodology: The survey was conducted electronically on the Redeye site and invitations to participate in the survey has also been sent via mail to Redeye members.
Number of responses: 596
Redeye är specialister på Life Science och Technology. Vi har en ledande marknadsposition inom aktieanalys, Corporate Finance och Corporate Broking. Våra klienter är snabbväxande framtidsföretag på den nordiska marknaden. Vår research utgår från en värdebaserad investeringsfilosofi och en unik ratingmodell. Redeye grundades 1999, är ett auktoriserat värdepappersbolag och står under Finansinspektionens tillsyn.
Redeye is the next generation equity research and investment banking company, specialized in Life Science and Technology. We are the leading providers of Corporate Broking and Corporate Finance in these sectors. Our clients are innovative growth companies in the Nordics and we use a unique Rating model built on a value based investment philosophy. Redeye was founded 1999 in Stockholm and is regulated by the Swedish Financial Authority (Finansinspektionen).