Novacyt shares: insiders are buying
What I find interesting about this share price pullback is that a number of ‘insiders’ at Novacyt, including CEO Graham Mullis, have seen it as an opportunity to buy shares. This month, five directors have purchased stock. This suggests these insiders – who are likely to have an information advantage over the rest of us – expect the stock to keep rising. Insiders don’t spend their own money on company stock if they believe it’s going to go down.
Novacyt: can the share price rebound?
Novacyt posted a R&D update last week that was quite encouraging. The company said that, in the short term, its focus is to deliver strong organic revenue growth in the core business. It believes demand for its Covid-19 testing products will continue to grow “well into 2021” as testing continues.
Meanwhile, in the medium-term, Novacyt said it expects to leverage its reputation, market intelligence, and relationships developed during the pandemic to commercialise new products. It also plans to expand its presence in respiratory and transplant clinical diagnostics, to continue to meet significant unmet market needs. Novacyt added that it continues to invest in developing its IP portfolio to enhance and secure future value. It has submitted 15 new patents covering various aspects of its Covid-19 portfolio recently.
Blockbuster revenue growth
Turning to the financials, Novacyt is likely to post some blockbuster numbers this year. In the first half of FY 2020, sales were up 900% on the same period last year, to €72.4m. The company delivered EBITDA of €49.4m for the period, versus €153,000 the year before.
Looking ahead, Novacyt advised that revenue for the second half of the year is expected to be greater than the first half. It expects full-year revenues to exceed €150m and EBITDA to top €100m. And it believes this rate of financial performance will extend into the first half of 2021