Stock market

Is it time to do a 360-degree U-turn and buy that penny stock?

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With a stock market value of less than £100m and a share price of less than £1, angle (LSE:AGL) meets the definition of a penny stock.

Last time I wrote about the company, I said that taking the position would be “based onAn ideaInstead of a proper understanding of what the company does and its prospects.

It describes itself as a “The world’s leading liquid biopsy company with circulating tumor cell solutions“His technical reports make for a lot of reading and to be honest I don’t understand them, which is why I said I don’t want to buy any of his stock.

It was on January 19. Since then, the share price has risen 12%. However, despite this good run, they are down 70% from May 2019.

Two-faced

But is my point of view justified, or am I a hypocrite?

For example, I own shares in it. Lloyds Bank. And yet I can’t say on my heart that I fully understand how financial institutions work and the industry they operate in.

Yes, I know what a bank does and how it makes money. But I have no clue when it comes to the intricacies of this field. I don’t know what the CRD IV models are. Nor do I understand countercyclical capital buffers. As far as Pillar 2A requirements are concerned…

So my reasons for not investing in angle are probably wrong.

I know the company is testing a cancer diagnostic tool. In January, it announced that preliminary results showed that in 70% of patients, its technology found cancerous changes in cells that could not be identified by DNA in the same blood.

And the more successful it is at detecting cancer — and the more lives it saves — the more money it will make.

Simple and worthy.

The key question

But should I invest?

Well, in April, signed a contract with the company Astra Zeneca Developing a new approach for tumor detection. It costs a relatively modest £150k. But the company must be good at what it does if Britain’s most valuable listed company wants to partner with it.

This was followed, in May, by another £550k deal with AstraZeneca. Both groups are looking for ways to identify prostate cancer at an early stage.

If successful, these projects could lead to further cooperation or, perhaps, takeovers.

There is nothing special about the financial history of the company. At 30 June 2023, it made a loss of £113m. Revenue is expected to be £2.2m for 2023. This company is about the future.

Encouragingly, it has enough cash to see it through at least as early as 2025. Although with a market cap of £55m, it doesn’t have the financial strength to withstand the impending shock to its business.

And when it comes to medical research, there are no guarantees. It is very expensive and failure is common. However, if successful, the rewards are great.

But despite these risks, I’m going to put the company on my watchlist when I next invest. This looks like a company that is going places.


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