Perimeter, PayPal, Porsche - In the fast lane with high-speed innovations

Perimeter - Imaging Technology for cancer surgeons brings safety

While a major public health insurer in Germany made headlines this week by integrating a fax interface into its digital app, other countries are further ahead in digitization in the healthcare industry.

Canadian MedTech company Perimeter Medical AI, for example. Their mission: to transform cancer surgery with ultra-high resolution, advanced imaging tools in real-time. So far, here is how it works in oncology: a surgeon operating on a cancerous tumor from a patient sends a sample of the tumor to a lab for further analysis. The lab is located outside the hospital, and therefore it takes between two and seven days to determine the type of cancer accurately. This situation is unpleasant for both the patient and the doctor - up to seven days of worry and uncertainty as to whether cancer may have spread further in the body. In the laboratory, the pathologist looks for cancer cells at the edge of the tissue. If he finds cancer at the edge of the sample, the likelihood of cancer recurrence in that patient dramatically increases.

Breast cancer surgery in which the breast is to be preserved doubles the risk for patients that cancer will recur. Previously, the doctor would then operate again a little later. Perimeter technology allows surgeons to see the edge of the tumor in real-time in the operating room to remove additional tissue immediately if they wish - greater safety for the patient, the physician, and right on site.

With Perimeter Medical Imaging, the physician always has the power of interpretation. Positioning is thus clearly a clinical decision support tool. CEO Jeremy Sobotta comments, "having this information in the operating room allows us to avoid the need for a second surgery. That is what the real value is. It is the time in which we have that information." Technology, he said, empowers physicians to provide the best possible care to patients and gives them the ability to make decisions right on the spot using valid data.

Does that even compute in a world of government payment, diagnosis-related groups and per-surgery reimbursements? Sobotta has an answer for that, too: "You effectively have a CAD 4,000 cost per patient and potentially avoidable reoperation costs. Almost certainly, physicians using this technology can expect a reduction in reoperation rates of at least 50%. So we have cut the cost in half from CAD 4,000 to CAD 2,000, creating a value of CAD 2,000. For payers, it is an elegant 50/50 split. They pay Perimeter CAD 1,000 per procedure. So CAD 1,000 to Perimeter and CAD 1,000 to payers is a pretty elegant kind of 50/50 split from a value-added perspective."

What is interesting about Perimeter is the Company is just beginning to commercialize its artificial intelligence-enabled product. This is an opportunity for investors to support a company's growth from the start and benefit from this groundbreaking technology.

PayPal - Lots of cash makes the Company attractive

Artificial Intelligence has found its way into the financial sector. We all know the situation: someone orders a money tree table lamp fresh from Wuhan in a dropshipping store, pays with PayPal and what happens? The deal falls through because the buyer's account is not funded. Annoying. False credit and debit card rejections cost real money. A 2020 study found that merchants in Germany, France, the UK and the US lost about USD 20.3 billion in 2019 due to incorrect card rejections. More than 60% of that amount - USD 12.7 billion - went to competing websites. The rest, USD 7.6 billion, was simply lost.

To combat payment fraud, PayPal has developed Fraud Protection. An "adaptive machine learning solution that helps merchants protect themselves from fraud." PayPal affirms that the solution's strength in detecting fraud comes from the Company's vast data assets.

Unfortunately, despite the innovations coming out of Silicon Valley, PayPal's stock price has nearly halved. In 2022 alone, the payment service provider's stock has fallen more than 44% due to disappointing forecasts. Inflation and the looming rise in interest rates drove investors to value stocks in recent weeks.

But a look at PayPal's balance sheet offers hope. The Company had debt of about USD 9 billion, but also cash, cash equivalents and investments of USD 16.3 billion. So the Company has plenty of cash. In addition, PayPal ended last year on a positive note, as it generated USD 1.8 billion in operating cash flow in the fourth quarter of 2021. This figure represents a 31% YOY increase.

Also, in Q4 2021, PayPal reported a free cash flow of USD 1.6 billion, a 38% YOY increase. As a payment option for small and large merchants worldwide, PayPal is here to stay. Now let's hope that the platform giant has consolidated in terms of its share price.

Porsche - Back to the family

There is no talk of high-speed speed in the planned Porsche IPO. On Tuesday of this week, Volkswagen confirmed long-circulated talks with its majority shareholder Porsche SE about an IPO of its sports car brand, Porsche AG. Porsche SE is a listed holding company and used to own the manufacturer of the same name. But it lost direct control in the 2008 short squeeze.

Porsche SE has made it clear that it wants the brand back. Back to the family, in other words. Because in the SE, the Porsche-Piëch family holds the absolute majority of the votes (53.3%). An undertaking that depends on the approval of the members of the various supervisory boards of the different entities. According to analysts, the Stuttgart-based sports car manufacturer could be worth EUR 85 billion, which would make it one of the largest IPOs in Frankfurt in years. The IPO is shaping into a complex undertaking, as Porsche SE controls the Volkswagen Group itself.

According to information from Handelsblatt, Volkswagen is in advanced talks with its main shareholder to reach an agreement that would lay the groundwork for an IPO of Porsche with up to 49% of the total capital.

Porsche CEO Oliver Blume is optimistic despite the semiconductor crisis and the Corona pandemic: "We have become even more focused. For example, we paid close attention to our fixed costs from the beginning of the pandemic. That has allowed us to lower the break-even point further and put us in an even stronger financial position, with the clear goal of maintaining our ambitious 15% margin target for 2022."

Porsche's self-confidence is also growing with its success. Says Blume: "For me, it is less about self-confidence and more about entrepreneurship. We have been successful with this for years. We use components from the Volkswagen Group and vice versa. The important thing is that Porsche's success also benefits the Group as a whole."

Porsche enthusiasts are generally academics with a household income of around EUR 90,000, 85% men and 15% women. The typical Porsche owner is 40 years old and older. A brand-new Porsche 911 can be bought for a slim EUR 111,231.

If you want to invest in a beneficial product with an expandable future, you are in a good position with Perimeter Medical Imaging. Innovations in medicine always require scientific research to find their way into everyday clinical practice. Therefore, twice as safe. Platform giant PayPal seems to consolidate and offers the opportunity to buy up. Porsche steps on the gas and wants to go back to the family. The IPO seems to be less in the interest of the shareholders than in the self-interest of the majority shares to the brand.