Compumedics waking up a year later

When I first started getting into stocks around mid-2017, it was a hobby. My focus was biotech, financial services, mining/resources and maybe ETFs.

Reasons:

1. I am a fitness/health enthusiast and knew what consumers wanted/needed. I also know of the issues in the 21st century where people are over-worked, stressed and just not at their peak. I look to companies who would better lifestyles of people.

2. Financial services like auditing, consulting and corporate advisory are always needed by big corporates and smaller but expanding businesses. Advice isn't free and certainly a necessity. Financial planners were also starting to emerge and more people are looking to better their financial position without hacking their heads in the process.

3. Although renewable/"clean" energy was being transitioned in, traditional crude and fuel were still in use for older vehicles needed  in business activities. Gold is (still the most) useful in electronics, jewelry, dentistry, aerospace etc. I have a focus on companies producing these materials and whilst remaining sustainable (growth and environment wise).

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Back in May 2017, Compumedics (CMP.AX) had just achieved their first magnetoencephalography (MEG) contract to the Barrow Neurological Institute. (MEG is a neuroimaging technique for mapping brain activity by recording magnetic fields produced by electrical currents occurring naturally in the brain, using very sensitive magnetometers. This was huge as BNI is the world's largest neurological disease treatment and research institution, the contract would be opening up doors to the brain imaging market. Then in June, it announced its orders its distributors in China, worth approximately $3million. This reaffirms its position in China and increased demand in sleep diagnostics and brain research. Compumedics' equipments are installed at 7 out of the top ten hospitals in China and I have no doubt they will be installed in more soon.

*this was when I acquired CMP's shares

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For most of the year til late May 2018, there hasn't been much news and the low volatility may have pull the shares to the 40-50 cents range from a high of 60 cents. When CMP announced a trading halt on the 28th of May, I just knew, it was another deal. In hindsight, I do wish I acquired more shares when it was at its 40 cents range.

On Thursday (31/05/2018), it became public that the Somfit deal with China was solid.

CMP is to enter a joint venture with China-based premium health check organization. And to receive $11.3 million and an anticipated $133 million from the purchase of 1 million Somfit devices from Health 100. I jump out of my chair and hit my funny bone. 

When its shares was going sideways for the past year or so, I'll admit that I had the inkling to sell as there were better opportunities but on the other hand, there were also the what-ifs. What if they have another breakthrough? (they did) What if they expanded more? (they did) What if the pullback was just an illusion to something better?

I am no expert (yet) but I can say that if financial analysis is done and you know it in your gut that your judgement is right, don't allow any "slow-down" or quant readings affect it.


Disclosure: I am long on CMP.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it . I have no business relationship with any company whose stock is mentioned in this article.