Considerable potential

Angle said there was an increase in research use, with many leading cancer centres “evaluating and adopting Parsortix into their research and clinical studies“. Currently, this provides Angle’s revenue, which is relatively low — just £219,000 for the six months ended 31 October — but the commercialisation opportunity is far more substantial.

To this end, the company has initiated two 200 patient studies in Europe and the US for its first clinical application — the detection of ovarian cancer. In a separate release, it reported a positive interim evaluation of the first 50 patients in both studies and said headline data from the full studies is expected to be available in Q2 this year.

There are no concerns about Angle’s immediate funding needs, as it raised £10.2m at 64.5p a share last May and today reported cash on the balance sheet of £9.7m at 31 October.

Speculative proposition

The company’s market cap is £39m at its current share price of 52p, compared with a high of over 100p a couple of years ago. This is a speculative investment proposition, so the shares could easily double on sentiment alone, but such a rise could also be justified by fundamentals in due course.

But, of course, any setback in commercialising its technology could lead the shares to plummet. Angle estimates that the market value available to it, if its ovarian cancer test were fully adopted, would be in excess of £300m a year.

With the company also working to address breast cancer and prostrate cancer, there’s clearly considerable potential. But, at this stage of its development, it can only be rated as a ‘speculative buy’.

Advanced retreats

Another pioneering — and currently loss-making — small cap in the cancer field is Advanced Oncotherapy (LSE: AVO). It’s valued about the same as Angle by the market, having a market cap of £41m at a share price of 57p.

Advanced Oncotherapy saw its shares crash 20% on Tuesday after it revealed that it had been informed the day before that Chinese company Sinophi Healthcare “wished to terminate” an order for Advanced Oncotherapy’s LIGHT proton therapy machines.

However, Sinophi had already indicated this in an update on its website as long ago as 26 November, citing “delays in the proton therapy machine delivery schedules”. Furthermore, Sinophi suggested that Advanced Oncotherapy didn’t have “a working prototype capable of commercialization” and that its technology was “still in the research and development stage”.

Serious concern

If correct, this has to be a serious concern for investors, not only because the technology is less developed than imagined, but also because an empty order book isn’t going to help Advanced Oncotherapy in negotiations with potential lenders for funds it desperately needs. It’s also going to need cash for legal costs, because it believes Sinophi has “no legal basis” for terminating the orders and will “take appropriate action”.

For these reasons, I believe Advanced Oncotherapy is best avoided by investors.

The post Could this small cap double after posting a £2.7m LOSS? appeared first on The Motley Fool UK.

National Grid

Jonathan Dawson joined National Grid as a non-executive director in March 2013. During the summer of that year, he and chairman Peter Gershon made a number of sizeable share purchases. However, no National Grid director has made a significant purchase in the two years since — until last week, that is.

With the company’s shares trading not far off their 52-week low, Mr Dawson decided the time was ripe to splash out £85,200 to buy 10,000 shares at 852p for his wife. Mr Dawson is also a non-exec at Jardine Lloyd Thompson, but has bought no further shares in that company since a modest purchase soon after his appointment in 2012.

National Grid is a solid, defensive business; and you can currently buy the shares at around the same price Mr Dawson paid. The stock appears decent value at this level. The trailing price-to-earnings (P/E) ratio of 14.7 is broadly in line with the FTSE 100’s 14.9, but the dividend yield of 5% is well above the index’s 3.6%.

British American Tobacco

Dimitri Panayotopoulos was appointed a non-executive director of British American Tobacco in February this year. By 21 May, he had accumulated 3,300 shares for an average buy price of 3,633p at a total cost of almost £120,000. Mr Panayotopoulos’s timing wasn’t perfect, because the shares have fallen somewhat since — which has been a cue for more directors to buy.

In the past week, finance director Ben Stevens has purchased a modest £18,278 worth of shares at 3,410p; Cristina Dall’Aglio, a person connected with Human Resources boss Giovanni Giordano (an executive just below Main Board level) has bought £68,380 worth of shares at 3,419p; and non-executive director Savio Kwan, who was appointed in January 2014, has chosen to make his first share purchase: 3,000 at 3,405p for a total outlay of over £120,000.

British American Tobacco is another solid, defensive business; and the shares appear reasonably priced at under 3,420p. The P/E of 16.4 is at a bit of a premium to the FTSE 100, but the yield of 4.3% is comfortably higher than that offered by the index.

Advanced Oncotherapy

Moving from tobacco to the treatment of cancer, and from mature megacaps to speculative smaller stocks, we come to Advanced Oncotherapy.

Advanced Oncotherapy’s team is based at CERN in Geneva and is developing a proprietary proton accelerator called Linac Image Guided Hadron Technology for cancer treatment. The shares of this AIM-listed company, which released its annual results on 3 June, have risen 137% since the start of the year to 9.5p, valuing the business at £128m.

On the day of the results, non-executive director Michael Bradfield pulled £147,150 from his wallet to buy 1,500,000 shares at 9.81p. And, before the end of the week, chief executive Sanjeev Pandya and finance director Nicolas Serandour chipped in with modest purchases of about £20,000 each at 9p a share.

What Advanced Oncotherapy is doing is thoroughly admirable from a human welfare perspective, and the directors are evidently confident of the investment case, too. However, it’s difficult to value the business at this stage of its development: the company is currently loss-making, the prospect of a first unit in Harley Street is over a year away, and first patient treatment is not expected until 2017. For me, Advanced Oncotherapy is one to watch for the time being.

The post Should You Follow Director Buying At National Grid plc, British American Tobacco plc And Advanced Oncotherapy PLC? appeared first on The Motley Fool UK.