Perennial’s Emilie O’Neill is backing small ASX diagnostics company Genetic Signatures as it seeks US FDA approval.
Emilie O’Neill is the co-head of environmental, social, governance and an equities analyst at Perennial Value Management’s small-cap Better Future fund.So far, for companies where the share price has been extremely weak, the market is rewarding those that have reported an in-line or better than feared result.Companies that have avoided a disaster have seen some share price support, which makes sense, particularly given the depressed valuations appear to be pricing in a doomsday scenario.
While COVID testing has eased, the company now has the majority of its revenue from tests other than COVID. This is likely to grow after it was successful in winning a tender for Public Health Wales for its enteric kit that is used for gastrointestinal illnesses. It has also well advanced in the process to obtain US FDA approval for the product which, if obtained, will allow Genetic Signatures to sell into the substantial US market.
Typically, ESG funds have been underweight resources and overweight technology and healthcare, all of which were headwinds in 2022. In saying that, long-term performance of sustainable funds and sustainable indices have held up well. We believe that businesses focused on ESG and sustainability are likely to be better run in general.Tailwinds for sustainable investment include the shift in consumer preference towards environmentally or socially friendly products and services.
There are also examples of growth companies that have held up over the recent downturn including Calix, an industrial solutions business solving global sustainability challenges. The company recently announced the filing of a patent covering a new and significant application of its core technology for the production of zero carbon dioxide emissions iron and steel referred to as ZESTY .