Polarean Imaging (LSE: POLX) shares have been getting quite a bit of attention from investors recently. Last week for example, they were among the top 10 most bought shares on Hargreaves Lansdown’s investment platform.
Should I follow the crowd and buy the shares for my own portfolio? Let’s take a look at the investment case.
An introduction to Polarean Imaging
Polarean is a US-based company that operates in the medical imaging research space. As an innovative company, it’s focused on solutions that help with the diagnosis of lung disease.
It specialises in the use of hyperpolarized xenon gas (129Xe) as an imaging agent. Its technology is designed to provide a novel, non-invasive approach to diagnostics and enable MRI systems to achieve an improved level of pulmonary function imaging.
Founded in 2016, Polarean listed on the London Stock Exchange’s Alternative Investment Market (AIM) in 2018 via an Initial Public Offering (IPO). Currently, it has a market-cap of around £120m, meaning it’s a small company.
The company is led by CEO Richard Hullihen, who has more than 30 years’ experience in the medical imaging industry.
Growth potential
Looking at Polarean Imaging today, there are a couple of things that stand out to me. The first is that in late December, the company’s key product, XENOVIEW, was approved by the US Food and Drug Administration (FDA).
XENOVIEW is designed for use with MRI systems for the evaluation of lung ventilation in adults and paediatric patients aged 12 years and older. It can provide pulmonologists, surgeons and other respiratory specialists with ventilation maps of patients’ lungs.
FDA approval is a huge achievement for the company. And it could lead to much higher revenues.
It’s worth noting that at present, the one broker covering the stock expects revenue to hit $9.8m in 2023 versus $1.5m in $2022. That’s a substantial increase.
The second thing that stands out to me is that there are some major name investors on board here. Currently, Amati Global Investors, Chelverton Asset Management (which has a great track record with UK growth stocks), and Aviva are some of the biggest shareholders.
This is all very encouraging and leads me to believe there could be significant investment potential here.
A speculative growth stock
Having said that, this stock is speculative in nature. Polarean is not expected to be profitable anytime soon. For 2023, the company is expected to post a net loss of $14.3m. Generally speaking, unprofitable companies are risky investments. One reason for this is that they are hard to value accurately.
Meanwhile, the company may need to raise capital at some point. Earlier in the year, management said the group had enough cash to last until 2024. However, it is burning through its cash pile. So I would not rule out a capital raising in the not-too-distant future. This could put pressure on the share price.
The size of the company also adds risk to the investment case. Typically, the share prices of companies this size are volatile in nature.
My move now
Given the lack of profits, I’m going to leave Polarean Imaging shares on my watchlist for now. The company does appear to have a lot going for it. However, right now, the shares are just a bit too speculative for my liking.
The post Hargreaves Lansdown investors are buying Polarean Imaging shares. Should I buy too? appeared first on The Motley Fool UK.
Is Polarean Imaging Plc a top choice for growing wealth now?
Before deciding, we think this pick is another must-see.
Discover ‘One Top Growth Stock from The Motley Fool’ absolutely FREE.
Last year, this extraordinary company grew revenues by more than £217 million. And for 5 years, revenues have grown at a compounded rate of nearly 60%. That’s more-than double Google and Amazon! Earnings have exploded 3,000%.
And it’s happening in an unusual way most people never see.
As The Financial Times reports:
“On an average day, redacted readers buy roughly 43,500 items – from luxury dog beds to remote-controlled golf trolleys – after clicking on links in articles.”
When they do, this company collects some of the cash – adding up to humongous profits. Its global audience reaches some 506 million people – across 250 coveted online brands. While past performance doesn’t guarantee future results, we think the outlook could be spectacular.
So please, don’t leave without seeing, ‘One Top Growth Stock from The Motley Fool’.
Claim your FREE report now
setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()
More reading
If I invest £1,000 in Rolls-Royce shares now, what could my return be this year?
Yields of 6.2% and 5.7%! Should I buy these dirt-cheap FTSE 100 dividend shares for 2023?
Tesco shares lost 24% last year. Should I buy in January?
3 catalysts for Lloyds shares to rip higher in 2023
How to invest £3,000 in high-yield stocks to earn a second income
Edward Sheldon has positions in Hargreaves Lansdown Plc. The Motley Fool UK has recommended Hargreaves Lansdown Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.