ZOM - With the Crickets Chirping at Zomedica HQ Why Buy the Stock?
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It has been three weeks since I last wrote about Zomedica (NYSEAMERICAN:ZOM) at the beginning of September. At the time, I argued that the company had to execute better for ZOM stock to move higher.
Since then, the only news out of the company was a Sep. 13 announcement that it had replaced outgoing director Christopher Wolfenberg with Sean Whelan. The newly appointed Whelan had previously been the CEO of a leading provider of contract physical therapy, Encore Rehabilitation Services. Before that, he had been a long-time CFO.
There is no question Zomedica needs all the help it can get to deliver on diagnostic platform Truforma’s potential. However, investors are looking for meaningful news that can move the stock. Unfortunately, a director appointment isn’t going to cut it — even if its a director who appreciates what Truforma can do for vets and pet owners alike.
I’m sure investors also appreciate what Truforma can do for the company. However, as the crickets seem to chirp at ZOM headquarters, the patience of many shareholders must be wearing thin.
ZOM Stock: More Engagement Is Needed
I’m a big believer in “Everyday Investing.” I first wrote about the concept for InvestorPlace back in 2012. The premise? Invest in what you know — an idea I borrowed from notable investor Peter Lynch. I noted back then:
“Lynch believed consumers held an advantage over the professional investor because they spend so much time in the real world observing these companies.”
With Zomedica’s Truforma product, ZOM stock has the opportunity to engage investors who happen to be dog or cat owners, or even employees or owners of veterinary clinics. Truforma’s full complement of assays might not be available just yet, but that doesn’t mean Zomedica can’t get out ahead of the story.
Zomedica has a webinar posted on the home page of its website, right above its “latest news.” The webinar caters to vets and other industry professionals. Unless I’m missing something about disseminating this kind of information to non-professionals, I don’t know why the webinar doesn’t have a press release associated with it — and every other webinar the company puts out, for that matter.
The company’s “Investor Information” page offers email alerts and RSS feed signups. By doing this, when real news is lacking (as it has been in September), investors can still remain engaged. However, Zomedica has practically been radio silent.
My point? At 51 cents, ZOM can’t afford to sit back and let investors come to it. Rather, the company has to go to the investors itself.
The Bottom Line on ZOM Stock
On the surface, Zomedica appears to be a business-to-business operation. It sells Truforma to vet clinics. Those vets then use it to provide patients with point-of-care diagnostics. That’s a value-added proposition.
Yet, Zomedica doesn’t really seem to be engaging the end-user — or perhaps more specifically, the ultimate decision-maker (i.e., pet owner) in the investment process. I mean, who is going to be more interested in a potential ZOM stock investment? Some 29-year-old investment analyst who has never owned a pet before or the “parents” of five or six cats and dogs?
I’m not suggesting that ZOM stop everything on the sales front just to engage retail investors, but there’s a right way and a wrong way to handle investor relations.
To me, the company is way too passive about the Truforma story. It should do more to draw in pet owners because their demographic screams disposable income and potential investment dollars.
The bottom line? If I’m a ZOM stock shareholder, the fact I’m hearing so little from the company is a significant cause for concern. Are things “quiet on the western front” because big things are coming? Or are the crickets chirping because Zomedica carries nothing but blanks?
I suspect we’ll find out in October.
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On the date of publication, Will Ashworth did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Will Ashworth has written about investments full-time since 2008. Publications where he’s appeared include InvestorPlace, The Motley Fool Canada, Investopedia, Kiplinger, and several others in both the U.S. and Canada. He particularly enjoys creating model portfolios that stand the test of time. He lives in Halifax, Nova Scotia.?
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