Year-end report from Phase Holographic

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The year-end report from Phase Holographic contained no surprises. Sales were only 11 % higher than last year, which still places break-even in a distant future. What makes the year promising is the fact that the company has strengthened the product verification, gross margin has gone up, and a sharp increase in number of scientific research projects reporting the use of the company’s HoloMonitor. From an investors perspective the past year has been fantastic. Last year the share closed at 24.30 SEK on the report date. This year it closed at 54 SEK – up 122 % the past year.

Product, gross margin and research

The company has worked on the verification of the product during the year. Their instruments can measure cells as they grow in an incubator. This means serious considerations on product Phase Holographicquality, as the environment is warm and very humid. Based on experiences from HoloMonitors in use alterations and improvements have been made.

Gross margin has raised to 52 % this year from 46 % last year. The company expects a gross margin next year of 60 % due to procurements of larger quantities of components.

The CEO writes in the report on the importance of becoming mainstream. Compared to traditional microscopes the HoloMonitor and the technology of the company is a new approach to study cells and their growth. Instead of killing the cells to see how they develop, now the researchers can study the cells while growing. As this approach becomes mainstream, demand for HoloMonitors will rise. The number of scientific articles featuring the HoloMonitor was 6 in 2014, 10 in 2015, 13 in 2016, and 16 by June 2017.

Investors’ perspective on Phase Holographic

From an investor point of view, the share price have had its ups and downs. The company was listed in January 2014 and had its first down period where it went from 10 SEK in January to 3 SEK in September.

By the end of the year, it was up again and the year ended at 8.50. The momentum continued and increased: In August 2015, it was 14 SEK and by the end of the year, it was above 40 SEK.

Then came an issue in January 2016, which made the share plunge 30 %. After the issue, the price have been 25 SEK (+/-) for more than a year. Not until April this year, the share has regained momentum.

Since last end-year report, the share is up 122 % to 54 SEK from 24.30. In the week following the report, it even added a little extra and closed at 55 SEK before the Mid-summer weekend.

The founder and CEO has made no secret of the plans for Phase Holographic: to sell the company at some point in the future. In this respect, the current trimming of HoloMonitor and the rising gross margins are important steps. As are the technology becoming mainstream.

Find the report here (in English).

Check out my growth share portfolio, the share price trigger list or my EGS (Evaluation of Growth Shares) Model.

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