🚂 All aboard! Happy new year 🎉. Lets hope 2021 is a shit ton better than 2020. Here’s to a year of mad gains and everything up… which according to some market experts is exactly what we can expect thanks to the COVID-19 vaccines.
In today’s edition:
🔮 The best stock analysis from around the web
☀️ Summer stock analysis of Novonix
🎉 New stocks for the new year
💡 Bits and pieces
Only interesting finance news:
Apple purges apps in China: Apple has removed almost 50,000 apps from the Chinese app store following demands from the Chinese government, including some big name titles like NBA 2K20.
Anti-drone guns: Aussie manufacturer Droneshield (ASX:DRN) has been getting more big orders for their drone disabling gun.
A brain for your computer: Strategic Elements (ASX:SOR) are testing their printable brain-like computing structures, which could revolutionise storage and processing in computing.
A way forward: The UK has approved a second Covid vaccine as the US falls well short of its “warp speed” rollout.
BNPL that actually makes money: Credit Intelligence (ASX:CI1) is both profitable and potentially undervalued according to some investors
Real Estate Overrated? Elon Musk starts selling off his properties after pledging to own no house.
🔮 Web Stock Analysis
The top (more interesting as judged by our co-editors) stock analysis from around the web:
What happens next: A compilation of trends for 2021 based on 35+ research reports by Spacecadet ventures
Zip payments analysis: Equity mates summer series podcast on Zip (ASX: Z1P)
Surely our last mention of Douugh… Equity mates summer series podcast on Douugh (ASX: DOU)
Renewable energy company update: Talga ASX Raised $25 Million, With Another $10 Million Coming Soon youtube analysis by David Quan
The most undervalued company on the ASX? A redditor’s view on CardieX (ASX: CDX)
Integrated Research Limited (ASX: IRI): A discussion regarding the company and their product
Boomer Stock: General Electric (NYSE: GE) Investment Thesis
📈 SUMMER STOCKS
We look into some ASX-listed companies as chosen by our readers. This week is Novonix (ASX: NVX). Reply email with any asx ticker of your choice to vote for the next company we review.
🚨 Always remember the information contained in this newsletter is general and for education and entertainment purposes only. We’re not financial advisors and don’t know your personal financial situation. You should always do your own research and if necessary, consult a licensed financial advisor before making any investment decisions.
🔋 Novonix (ASX: NVX)
High level summary
Novonix is a developer and supplier of high-performance materials, equipment and services for the global lithium-ion battery industry with operations in the USA and Canada. Their strategy is to become a major supplier of electric vehicles components.
Industry
The supply of components for lithium batteries is an established market, however Novonix is attempting to capture the relatively underdeveloped segment of Chinese synthetic battery materials, most notably their US-developed artificial graphite.
They are operating with very favourable macroeconomic tailwinds due to the upcoming widespread adoption of electric vehicles, with demand for battery materials forecast to grow over 700% in the next 10 years.
Business plan:
Novonix is currently gearing up to transition from the R&D heavy stage of their product development to becoming a fully-fledged supplier of cutting edge battery components. Over the next 5 years the goal is to significantly increase the supply of their components by 15 times, and secure more supply deals with major manufacturers such as Sanyo.
Financial health
Current Ratio - 10.33: Implies company has enough short-term assets to cover its short-term liabilities
Long-term assets also substantially higher than long-term liabilities
As it stands, the company has enough funding available for another 3.5 years at their current burn rate.
Valuation
Target price of 1.09 from Morgans Financial as at June 14, 2020
Trading at a EV/Revenue ratio of 91.14 and P/R ttm ratio of 100.03 (yahoo finance), very high but not unanticipated considering the company is an early stage high growth small cap
Overall thoughts:
This is a company right in early stages of product development. They are playing in a market that is expecting unprecedented growth and do appear to be a credible early stage player within this industry. It’s very speculative at this stage, however once the product fully goes to market, revenue and valuation could increase substantially.
Beast research you need to read/watch to understand this company
Morgans research report on Novonix from mid-2020: Novonix - Fully charged for now
Discussion forum on Novonix and what investors think of announcements: Novonix Strawman Discussion
Seeking Alpha Report (you may have to pay money to access this…): Novonix Is Set For Explosive Growth With Or Without Tesla
All of David Quan’s videos on Novonix are worth a watch: Here, here, here and here.
Why Novonix doesn’t need Tesla to succeed: Stock Factory video on the company
Novonix Investor Information Centre: The go-to place for announcements and customer presentations
Simply Wall Street: Novonix (ASX: NVX)
Other financial information: Yahoo finance
⭐ UNDER REVIEW
📈 New year, new stocks
Reflecting back upon the year of the retail trader, here’s the latest update on co-editor James’ watch-list companies, as well as a couple of new ones for 2021.
What are these companies?
These are just cool businesses doing interesting things that James is tightly monitoring a.k.a. this watch-list is James’ de-facto Hype Train portfolio.
They’ve done pretty well so far and he’s still bullish on all of them. That said, some are significantly less attractive (more expensive because their price has increased substantially..) since they were first added to the watch-list.
Performance since first mention (October 6th)
🏦8common (ASX: 8CO) +15% 🚀
🔋Novonix (ASX: NVX) +0%
🏘️Opendoor (NYSE: IPOB) +39% 🚀
💻Upwork (NASDAQ: UPWK) +83% 🚀
👻Snap (NYSE: SNAP) +87% 🚀
👔Slack (NYSE: WORK) +48%
🎮Flow blockchain – privately listed but as of latest valuation up 280% 🚀…
and from 6th November, Bitcoin +85% 🚀
But what about new stocks for a new year?
To shake things up a little bit going into 2021, James is adding 2 new companies to his watch-list:
⌚CardieX (ASX: CDX)
What they do: CardieX is a health-tech company currently focused on hypertension and cardiovascular disease. They have recently entered the tele-monitoring and wearable healthcare market with a consumer product upcoming.
Why they’re on my watchlist: This one is super speculative, I just believe in the CEO, Craig Cooper. He has (1) a stellar background having previously founded billion-dollar companies and (2) has a significant amount of equity in CardieX to incentivise him to do well. This reddit post and accompanying comments sums up the bull and bear case investment thesis pretty well.
👚Stitchfix (NASDAQ: SFIX):
What they do: Stitchfix is a online service that utilises data science and machine learning to recommend personalised clothing items based on size, budget and style.
Why they’re on my watchlist: A couple of things going for it. Firstly, they’re founder-led by Katrina Lake. Secondly, from my understanding of data science, the type of information they would be collecting from customers is pretty damn valuable. This said, they have had a recent run-up despite lots of people being pretty bearish on the company.
Bottom Line: A quick update on an impressive stock selection (so far…). This list is not a recommendation of companies to invest in, but purely a snapshot of our co-editor’s watch-list going into 2021.
🎉 WEEKLY VIBE
Thank you and have a great week.
p.s. pls reply to this email with a ticker for us to include in our summer stock analysis segment next week. Whatever ticker gets the most mentions will be included.
Email us at thehypetrainaus@gmail.com if you have any hot tips for an article or just want someone to talk to.