A week of mixed fortunes for two speculative investments

As I have mentioned in previous blogs, I have made two very speculative investments. One in a company called Angle and the other in Avanti Communications.

This week both reported news on progress.

On Monday, Angle informed the market that

"ANGLE plc (AIM: AGL), the specialist medtech company, is pleased to announce successful results from third party testing of its Parsortix non-invasive cancer diagnostic product on colorectal cancer patient blood."

This validation from the University of Surrey Oncology Group (Surrey) is another key milestone in their pursuit of selling their Parsortix device for research purposes and ultimately for clinical use.

The share price rose in response to the news and continued to rise over the next few days.

According to the milestone chart, next up should be validation from the Paterson Institute for Cancer Research with lung cancer patient blood.

Whilst this is a highly speculative investment, it does appear that things are progressing on track at the moment, and I'll continue to hold.

Preliminary results should be released this month.

If this device does turn out to be as effective and cost efficient as it appears to be then the future could be very promising indeed, not least for the patients that may ultimately benefit from its diagnostic capabilities.

On Wednesday (a day before they had recently announced a trading statement would be released), it was not such good news from Avanti Communications, although the initial pounding that the share price took was more than a bit harsh.

A revenue shortfall of £10m for their year ending the 30th June appears to be the main reason for the sell-off, but the company did become cash flow positive at the operating level in June and has signed contracts with major telecoms and media companies including Vodafone, Technicolor and CNN.

The main worry with Avanti is the large amount of debt that it carries, but the company "is conservatively financed, with a very long term repayment profile on its debts and remains in full compliance with all covenants."

I bought shares in Avanti around the £2.60 mark, and this investment has fluctuated between profit and loss since I have held them.

With this type of company (just like Angle) you have to accept that it's a highly speculative play, a long term game and that you could lose all or most of your money. The hope is that either or both might multi-bag.

As long as you don't bet the house on these type of investments then they can provide an exciting ride.

Some investors would argue that the preservation of capital is the most important dictum in investing and I'd agree. However, if you're a stock picker I'd strongly argue that it's the whole portfolio of shares that you look at and you shouldn't get too hung up about any individual stock losses.

I will remain a holder of both these two companies and would love to see both of them succeed over the long term. Firstly from a selfish point of view, but also both companies have already achieved significant milestones from humble beginnings which is testament to their innovation and entrepreneurship.

I wish both companies well, and will continue to monitor their news flow with interest.