Why Othocell (ASX:OCC) is a High Potential Buy
Jason McIntosh discusses why Orthocell is an ASX small cap with loads of potential. This interview appeared on Ausbiz financial news. on 3 February, 2021.
Host: Jason, tell us about Orthocell Ltd [ASX:OCC]
Jason: Orthocell is an interesting stock. It has a $90 million capitalised stock and isn’t in the All Ordinary, so I suspect most people wouldn't know about it. For most investors, it's not going to appear on their radar. But it’s got a fascinating story. Othocell is a regenerative medical company. They focused on collagen devices and cellular treatments. And in the US, they have just got FDA approval for their dental regenerative product. This product focuses on dental bone and tissue treatment.
Now, this is a big deal because it opens up the US market. They've already got approvals in Australian and the EU, so this is probably going to help them partner in terms of rolling that product out. Regenerative medicine is a huge market. The company says it's something like a $17 billion market. Orthocell is a small company and it's just getting underway.
I hadn't heard of Orthocell until recently. It only came to my attention via Motion Trader’s algorithmic scans. As you probably know, Motion Trader covers practically every ASX company, so it often finds stocks that few people know about. And as is so often the case, momentum uncovers some of the most interesting stories.
Have a look at the chart:
You’ll that see I’ve marked some key points on the chart. The blue circle is when the moving averages become positive. The upward break was then the trigger for the buy signal. Motion Trader’s strategy is to buy as prices are rising and then let profits run until the shares hit the trailing stop loss.
Getting back to the company...
They've got another product which is coming up to the approval space, which I really like. It's a
cellular treatment for tendon issues, so it's focusing on things like the shoulder, the elbow, hip, hamstring, and the achilles.
As a lot of people know, tendon issues are a real problem. The big thing with this treatment is that it's injectable, which means you might be able to avoid surgery. I think this is potentially a blue sky opportunity if they can get it approved, roll it out, and if it all works as advertised. The recreational and elite sports markets are huge, and if Othocell can make in-roads to that market, then the shares should have a lot of upside potential.