Stock Quickie – MSB:ASX

Mesoblast – MSB:ASX

How did we get here?

Was mentioned on Buy Hold Sell: 5 of the best performing growth stocks (Livewire Markets – Youtube) and I thought I’d take my own look.

What do they do?

The world’s biggest pure play stem cell developer. Makes off the shelf stem-cell products for different uses. Currently have a number of products in phase 3 trials. 

Weighing machine

Not profitable, except for 2016, with RoE of fluctuating between -20% to 11% in the past 5 years. Usually has nil debt, but this has risen to about 17% in the last two years. Growth has been negligible, with regular capital raisings (~10%p.a.) to keep them moving while they seek approvals. Good insider ownership (13%, $250M in shares), they definitely have skin in the game. I’d classify this as a “risky company”.

The company is largely just burning cash, and ticking things over as they seek approvals:

Voting machine

They are a pretty standard biotech, with PB trading at the Australian industry average (3.6x).  

Other options

CSL,OCC

Worth looking further?

They are still in stage 3 trials. It could be years before treatments are available on the market and the company is making money. Hold off until business future is more certain.