Venture exchange high-flier Zecotek Photonics (TSXV:ZMS) has received a lot of attention for its lawsuit against giants Philips and Saint-Gobain of late, but one fund manager says the case is just one part of the company’s larger value proposition.
Bob McWhirter, President & Portfolio Manager at Selective Asset Management, was on BNN’s Market Call Tonight on Friday to talk about Canadian equities and tech stocks.
McWhirter, who says his fund owns Zecotek “in a big way” says that while success in its outstanding lawsuit would be great news for Zecotek shareholders, those same investors should not forget that the legal actions are just one part of the company’s business.
The fund manager reminds that Zecotek makes crystals for positron emission tomography (PET) scanners, and has recently signed a deal with Japanese heavyweight Hamamatsu. That company, which is one of the world’s leading suppliers to the photonics industry, placed an order for $500,000 worth of Lutetium Fine Silicate (LFS) scintillation crystals from Zecotek late last month.
McWhirter says another part of Zecotek’s business concerns its ongoing relationship with CERN, also known as the European Organization for Nuclear Research, who came to Zecotek to supply crystals to be used in new experiments clarifying the existence of the Higgs Boson.
“We think there is a good opportunity for Zecotek, one with their lawsuit, but as importantly with their underlying business and the potential of the unique characteristics of their crystals, said McWhirter.
In February of last year, Zecotek filed a lawsuit in the United States District Court of Ohio against Philips and Saint-Gobain, alleging that Saint-Gobain’s LYSO crystals infringe Zecotek’s patent, and that Philips infringes by using those crystals in the PET scanners it sells. The case has just completed its “Markman Hearing”, an important pretrial procedure that aims to determine the use of relevant key words in a patent claim. McWhirter says he expects to hear more about the results of that hearing by the end of August.
At press time, shares of Zecotek were up 8.5% to $.64.
Disclosure: Zecotek is an annual sponsor of Cantech Letter.