Covalon Technology Limited (COV)

[zenvesting]

Yes, they increased their SG&A costs quite a bit, with the larger increases in the sales department. The gross margins are still healthy at 59% and they should be able to return to profitability if they if they can continue to grow their sales.

I admit my thesis has changed here a bit over the past two years, as I expected the company to be more profitable than it has been, but I still think it's a great value relative to the other publicly traded advanced wound care companies......and I think their R&D could produce something really interesting here.

A review of their employees on LinkedIn shows that they have hired several new PhD Chemists and Biomaterials Scientists over that past year. I am particularly compelled that they attracted a new PhD Polymer Chemist a few months ago from The Centre for Commercialization of Regenerative Medicine (CCRM) in Canada: http://ccrm.ca/industry-consortium

Why would someone leave a job at an industry consortium like that, with so many compelling academic and industry partners, to go to work for a little company valued at less than $20 million dollars?

This is going to take some patience, but I believe things are going the right direction, and there could be a very big reward here eventually for the patient and attentive investor.