From the research I have done so far, it looks like an extremely...

From the research I have done so far, it looks like an extremely risky investment with significant upside and downside risks. Generally I would stay away from investments that carry such a high level of risk. However, in this case there are a few comforting points.

1. Management has an excellent track record - they havent stuffed anything up so far so it is more likely than not that they will keep making good decisions. In my experience, management that brings bad news, keeps on bringing more bad news (one can get trapped into thinking that the next news will be positive because of such a bad base) e.g. Mr Hjorth at Vocus. Likewise, management that gives good news keeps on giving good news. e.g. A2m, NST. These companies look like they have had such a long winning streak that the next step is down but more often than not, they keep going up and their decisions end up having positive impacts.

2. Large institutional backing (especially with recent capital raise).

3. Large market cap. This can be slightly misleading when penny stocks get pumped but NPAT of near $50 million doesnt lie. This is not a 'speculative' company (although PE seems very high). I find it far more difficult to justify APT market cap because they are yet to turn a profit. Not only is APX turning a profit but they have steadilty grown their revenue, EBIT and NPAT for many years and there is a positive pattern in these numbers.

Current SP is dirt cheap if Appen can establish themselves as the global leader in data labelling (this will mean they have the greatest economies of scale and no one can compete with them because of this). On the flip side, if a competitor can get things done more economically, the SP could easily go 10 times lower.

I have seen you at the CSL forums as well. CSL is one of only 3 global players in immunoglobin therapy. That's what we need from APX - become one of only a few large companies that does data labelling etc.