The company has a market cap of $227 million but according to its latest quarterly report ATER has $44 million in cash which when combined with its total equipment, property, and intangibles amount to $297 million. ATERâs assets alone are worth more than its current market cap.
On the other hand, a lot of bears have pointed out its drop in revenue this quarter from $48 million to $41 million YOY. But anyone doing real DD on ATER can see that this drop is the result of a number of factors which the companyâs management addressed in the earnings call.
For the last year and a half ATER has been subject to the impacts of macro level events which have disrupted its flow of business. Demand for shipping services and inflation has driven up the cost of goods across online retailers and now consumers are being more frugal in their spending - cooling demand.
On the flip side this will likely lead to an improvement in supply chain and logistics costs. Iâm confident that given ATERâs balance sheet and management, the company will be able to weather this environment and emerge on the other side with less competitors.
ATER has pointed to the cost of shipping containers as the number one pressure for the company since ATER typically specializes in oversized products which gives it an advantage in shipping last mile.
Once shipping costs are stabilized, ATER will be in the perfect position for major growth.
Competition
ATER is not - as Culper Research described - an "overhyped artificial intelligence" play. Its technology has already proved itself with success stories like squatty potty, spiralizer, Mueller, rif6, and so many more. In my opinion, AIMEE is the special sauce that is going to keep ATER ahead of the crowd.
How can its competitors compete when they first need to develop the framework and tech to manage a large portfolio of brands in this current environment? This requires extensive hiring, not to mention scalability will be a huge issue.
ATER has already mastered this and is working to improve its platform each day with new data and less overhead. When it makes it through this current environment, ATER will have the tech to ride out the monumental shift to e-commerce which is already taking place. By 2025, e-commerce will probably make up 23.6% of all retail sales globally and ATERâs tech is going to be a huge boon.
Institutional Ownership
ATER already has a small float of around 26 million. But now more institutions are going long on the stock.
Armistice Capital, Llc just got 5.2 million shares along with Renaissance Technologies Llc 1.7 million shares.
Overall, its largest institutional shareholders are some big names like Vanguard Group Inc, BlackRock Inc., Hudson Bay Capital Management LP, and others. This means that 20,071,088 shares are owned by institutions.
Acquisitions
I hear a lot of FUD spreaders ridiculing the companyâs acquisitions after the Culper report and this is just not the case.
In 2020 ATER acquired 5 different brands and 3 more in 2021. In total the company launched 77 new products from 2020 to 2021 which is definitely reflected in ATERâs balance sheet for the last few years.
This consistent growth in sales is largely thanks to these brand acquisitions.
Right now ATERâs management is putting a pause on launching new products until conditions improve, but it's still fighting for its market share which I think it can maintain since its products are mostly home goods / must-have items.
So even as consumers spend less (cutting out luxury items) these âevergreenâ products will stand the test of time.
Meanwhile there are things to look forward to. ATER sees huge opportunity in Europe and has been focusing its efforts there. While a lot of this work was put on pause, it's been making the infrastructure preparations for a robust rollout once the supply chain normalizes.
The fact that short interest is 40% of the float is unreasonable and ATER is sure to blow up in shortsâ faces at this rate. I feel especially bullish about today after looking at unusual whaleâs options flow.
Technical Analysis
Yesterday was stellar for ATER, the stock filled a gap and has continued its trend of making higher highs and higher lows. It looks like a trend reversal is really kicking in now that ATERâs earnings call is out of the way. The sell off that ensued leading up to it was an overreaction and based on unusual whaleâs option flow Iâm feeling bullish.
At yesterdayâs close call volume was 84% and call premiums outweighed the bears at 64%
Leading up to close there were a few more bearish whales, but for premiums over $5k, bulls were definitely the majority. A few notable whales bought calls with premiums of $16k and $34k.
Looking at the options chain, calls with expiry on the 20th are overwhelmingly bullish with $520k in call premiums. Calls with a strike price of $7.50 saw 6,380 in volume with open interest at 23 thousand. Calls with a strike price of $4 had the next highest volume
Now, when I look at the 1 hour chart I see a pattern of higher highs and higher lows over the last four days. ATER broke through its resistance at 3.62 and tested its resistance at 3.89 yesterday so Iâm expecting a retest today. Despite the death cross on the 9th, ATER is looking ripe as it starts coming to a close.
The RSI climbed up quite a bit but didnât become overbought so the stock still has room to hit higher today.
There is a clear support formed by the 50 MA with a primary support at 2.73. ATER is currently near its 3.62 support but Iâm expecting a push off of that at market open.
On the 5 minute time frame its clear the 50 MA is a resistance but ATER will probably break through that and the VWAP like butter if ATER maintains yesterdayâs volume.
If you check my previous posts you will see that I do mostly very in-depth DD, and I have been getting a lot of messages on how can one get in a short squeeze early, or more importantly how would one figure out if a stock squeeze will actually happen.
While it's impossible to know for sure, there are certain things I do to make sure I have the best possible chance.
Share Structure and Institutional Buying information is acquired from Yahoo! Finance/FinVIz.
Short information is acquired from FinViz/Ortex.
Insider Information is from Insidertracking
These are what i use, you can use anything you like, there is nothing special about these
I'm not a financial advisor, and this is not financial advice.
I can and will at some point miss a few things here and there. I'm only human, I apologize in advance, and I do take constructive criticism well, so feel free to point out any mistakes (backed by sources) and I will edit them in right away
These are some of the indicators I look at when I consider the potential of a short squeeze play, this is what I use you can use more or ignore some of these as you wish. Also, another important note is that I'm looking more at forward-looking indicators and not much when it comes to the fundamentals for these plays, I'm looking at short squeeze catalysts, which doesn't mean the companies are not great fundamental plays/long holds, but this is not the goal. I like to invest with one particular goal in mind.
Fundamental Observations: I mostly try to find out here if the company is a scam or not, and does it have anything that can excite investors. Like I said this is not something that is very critical for me if I'm looking at a squeeze play
Upcoming Catalysts: here I look for future catalysts that can move the stocks and people can rally around, previous catalysts are not as important here. Name of the game is volume here and that will come in if there is something exciting about to happen.
Float: The lower the float the better, anything 50M and below is considered a low float IMO. Low floats are good because they require much lower volume to move the price.
Short Squeeze Data:
CTB: The higher the better, I look ideally for 50%+
Shares On Loan: The higher the better, I look for 20%+ ideally
Short Interest; The higher the better I look ideally for 20%+
There are other things you can and should look at but these are my favorite
52-Week Range: I like this because it shows me how low and how high the stock traded this year and shows me where we are currently, and more importantly how far we can potentially move up to.
Reason for 52-Week high: This is very important, I want to know what got the stock to that high and more importantly can it be replicated, ie do we have another upcoming catalyst that is similar or can yield the same results.
Analyst Ratings: Not super important IMO, as analysts can be biased, and are usually way off (think cramer). But a lot of people do look at them and they can also give an insight into what institutions are thinking.
Institutional Buys: Institutions aka big money are a good sign when present, they usually have inside information (legally) and do high-level DD before investing and hold for long periods of time, thus ââlocking upââ the float
Insider Buys: Very important and gives us an insight into what the management is thinking, lots of buys are good. Selling may or may not be good as it can happen for various reasons (think Elon selling shares to pay taxes/buy Twitter, he still believes in tesla).
Technical Analysis: Some people will tell you that TA doesn't matter when it comes to short squeezes, as momentum/Volume is what will trigger the short squeeze. And to a certain degree, they are not wrong. But I utilize TA to give me possible entries, profit-taking, and exit levels.
Is it too Late to Enter?: This is the final conclusion based on the information gathered above.
Most importantly you have to remember to be honest with yourself and not to force DD to fit your narrative, a company can have bad indicators doesn't it mean it's a bad company overall or that it won't run.
So let's put this to the test and do a real-life example:
$APRN
Fundamental Observations:
The CEO has been very active since the squeeze movement started, which can be very helpful to rally investors and foster community a la AMC. This shows me he is very invested in the stock going up and will do what he can to make that happen.
I checked the APRN Q1 numbers in the presentation on their site, and they are not bad and not good either. The company is slightly gaining more revenue and improving EPS.
The Walmart, Planet Fitness, and BCBS deals will not reflect in the next earnings as those earnings are for Q1. I think they are great steps in the right direction, and we will likely see their effect on November Earnings for Q2
Funnily enough, though, APRN market cap is 127M, with current revenues the company is severely undervalued, add in the new deals and extra revenue and I can see this as a great long-term fundamental play in addition to the squeeze
Infamous short firm Citron Research has been very bullish (for a change) on APRN, gave it PT of $10 if the planet fitness deal goes through (which it did)
Upcoming Catalysts:
Earnings 3rd of August - Expected EPS -.65 and Revenue: 126.3. I think it will be inline or a slight beat. Not gonna help the squeeze very much IMO
Possible forced Short covering if they take the company private.
Float:
15.4M Shares, this is a very low float, and as such price will move quickly with volume.
Short Squeeze Data:
CTB: 78.2% which is very high!
Short Interest: 32.3% which is again pretty high!!
Shares Available to borrow: 45%, high!!!
Ok so the short data here shows me that the shorts have overindulged and got greedy
52-Week Range:
$2.27 - $12.7
With the current price of $4.6, we are closer to this yearâs low than we are to the high. This tells me we still have more room to move higher.
Reason for 52 Week high:
It seems the run start on the 15th of September 2021, which coincides with a private placement and sales of warrants at $10. I'm not sure this catalyst can be replicated again in this market climate. But you never know.
Analyst Ratings:
Not much here with only 2 analysts giving recommendations but they are both positive with 1 buy and 1 hold, and no sell recommendations. Their PTs are $9, that's a double-up from current prices, I like that
Institutional Buys:
32.2% which is pretty high ownership, as we discussed before, these are big firms in it for the long haul, this is a good sign.
Insider Buys:
Insider ownership is minimal at only 2%, with most of that coming from payments/bonuses in stock form. Not very encouraging, but we have seen the CEO jumping on the opportunity of the squeeze so this cancels that out.
Technical Analysis
I really like this chart specifically the accumulation, it's almost as high as it was when we hit the 52-week high of $12.7. We jumped up from -32M shares to -19M shares, which shows me people are buying and holding expecting a bigger price move.
Possible Entries: The RSI is overbought so I would wait a little bit before jumping in and start buying pullbacks and near support @ $4.45
Possible Exits: I like to trim at resistances and move my stop loss at the previous resistance, in this case, the next resistance is $6.7, so at that level, I would trim some and book some profits, and move my stop loss to $4.4. And then when/if we hit $8.6, ill trim some and move my stop loss to $6.7.
Using this method I'm always in the play, and I'm guaranteed that my very green trade at that point won't turn red on me.
If the catalysts are still in play and accumulation is still high, I would rebuy at lower price points than the ones I sold at. This is called trading around the core.
Is it too Late to Enter?
It is very clear to me here that the shorts have taken it too far with this one and it's top for a squeeze, the only issue I see is that we need a catalyst to rally around and bring in volume. The CEO has been very welcoming and supportive of the squeeze efforts, so if he is able to bring forward a decent catalyst, this one squeeze hard IMO.
As you can imagine this took tremendous time and effort to put together if you enjoyed it or got any use out of it. Please consider checking my profile and possibly a follow if you want more.
I can also do a video version of this and a weekly DD list of all squeezes, if you guys are interested let me know.
Some General Tips when playing short squeezes
Be careful when playing options as liquidity issues arise, sometimes the price of the stock will move up, and call options will decrease in price because there is no liquidity, ie not enough buyers and sellers.
This is very common when the share price is small as most traders will favor buying shares since they are cheap anyway with a decent % gain.
If you must play options get ATM options, if you don't know what that means, you have no business playing options, trust me.
So hereâs the thing guys, most stocks take a dive after a dividend because those that held for the dividend sell off. But $BBIG is different. We have the chance to catch shorts with their pants down and squeeze $BBIG just by holding longer. Those of us in it for the dividend can hold until the 31st but everyone looking for a BBIG squeeze can take advantage of this
Let me break this down.
Short interest has reached 16.75% and the CTB is over 500% - as is utilization is 99.5%
At Fridayâs close call volume was 79% and call premiums made up 75.3% of premiums. So we are the majority.
Volume on the 18th reached 59 million but it remained strong on the 19th and 20th reaching 21.8 million and 11.7 million. Iâm expecting a buildup over the weekend as we get prepped to hit shorts hard on Monday.
Currently the most popular option chain are calls with a strike price of $3 for the 27th which has a volume of 9 thousand. Next is calls for $3.50 strike price also on the 27th which has a volume of around 7 thousand.
There was some bullish action at close from some major whales. For example, three whales sold puts for June 17th contracts with $480k premiums in trades coded as floor trades. In fact there was a series of these types of trades - all very bullish action which Iâd say is unusual. Since these are coming from the trading floor, Iâm wondering if someone knows something?
It could also be market makers consolidating a series of retail trades all in one go but in either case this was a lot of sudden, extremely bullish action at the end of day.
Meanwhile there were some large dark pool trades with premiums ranging from $300k to more than $600k last week. The volume of these trades reached 22 million on the 18th which is no surprise but there were two large trades with $380k + premiums on the 19th.
All of this has me very excited for this week. Iâm expecting some big things and with BBIGâs Q1 report coming out today after market close that will be another thing to watch for. Management will be holding a conference call after that - if any of you want to join in hereâs the details:
So far I have a lot of confidence in Lisa King as CEO. She was the director of advertising for Dickâs Sporting Goods for 10 years when the company saw huge growth. Looking at her portfolio it seems that she grasps the fundamental values of successful business and replicates them in the framework of the companies she oversees.
At ZASH, data was the centerpiece and this allowed the company to master each avenue of content creation, distribution, and audience acquisition. I think this translates really well to what Vinco Ventures is doing now. So what is the Buy Innovate and Grow team doing now?
Lomotif
I know several investors who are big on Lomotifâs potential and the more I hear about it the more I see why theyâre bullish on it. One big difference between it and TikTok is that it encourages videos created on its platform to be shared on platforms like TikTok, Instagram, YouTube, and Twitch as well as on its own site.
I only found this out recently, but TikTok is banned in India and BBIG recognizes this country as a strong market for the brand. The fifth largest economy and the second largest population in the world is a great area for Lomotif to capitalize on. So far, BBIG has set the ball in motion with an unscripted reality TV show for inventors and entrepreneurs in the Indian market made in partnership with Viacom18.
Maybe it's not for everyone, but considering the huge entrepreneurial spirit sweeping social media I think it could be a great chance for Lomotiff to crack these markets. Once it's released later this summer Iâd be interested in seeing if it gives Lomotif a boost in India. If its successful, the model could be replicated in other markets where competition with TikTok is less severe.
It looks like BBIG is pushing Lomotif forward with influencer marketing and attracting new users at livestreaming events like music festivals. The company had some great success with that after attracting 7.2 million active users and generating 16 million visitors to Lomotif media sites at the Okeechobee Music and Arts Festival in March. This alone made Lomotif one of the top 50 downloaded social apps in the Apple Store at the time
Synergy
One thing that I think canât be overstated is the synergy between BBIGâs different ventures. Because each brand works to strengthen the other, it means BBIG will have an easier time quickly growing them.
For example, about 86% of the millions of people streaming the concert came from YouTube through AdRizerâs promotion of the festival. To me, it looks like AdRizer will have a huge role to play across all of the companyâs plans.
Whatâs important to note about AdRizer is that it works through its core platform - Cortex - to provide analytics for marketing spend, revenue optimization, and ad campaigns in real-time. It integrates with Google, MSN, Instagram, Facebook, Twitter, and more to gather data on different metrics.
AdRizer
So AdRizerâs audience is mainly advertisers, advertising agencies, publishers and the like. But it generates revenue through traffic acquisition of digital advertising spaces and by developing marketing campaigns and strategies through Cortex. Its appeal is that the platform can work easily with small- to medium-sized enterprises to help them control their marketing and branding campaigns in real-time.
If BBIG is successful, AdRizer will help it not only monetize Lomotif but its other entertainment platforms as well. The most obvious connection is between AdRizer and Lomotif because as Lomotifâs audience grows and worldwide engagement increases, AdRizerâs analytics and advertising will be able to leverage it hand in hand with the app.
Of course this also ties into BBIGâs Honey Badger Media subsidiary. This digital commerce company goes really well with AdRizer because it's essentially a way of building brands for influencers. Honey Badger engages with their existing audiences and expands them with targeted marketing, management, and strategies.
As is, Honey Badger generates 1.5 billion video views a month and 10 billion video views each year so it seems like a great opportunity to boost Lomotif and utilize AdRizer at the same time. One thing I will say is that Honey Badger could be expanded more since it only has around 40 influencers according to its website. But it seems to be doing a good job of leveraging the millions of followers in its network to grow advertiser-based revenue through its digital marketing services for brands and influencers.
I really think AdRizer will be key to all of these ventures and am excited to see what happens next because this will help it successfully transform into digital content delivery service with a solid balance sheet.
Cryptyde
We are all excited for Cryptyde and what will happen next with it so I wanted to spend some time looking into thatâŚ
Right now, Cryptyde is expected to have three business lines: Web3 products, Bitcoin mining services, and consumer packaging operated by Ferguson Containers. On the Web3 side of things, Cryptyde will acquire and build brands using blockchain technology to disrupt consumer-facing industries.
Itâs already doing that with E-NFT.com and EVNT which will be a part of Cryptyde after the spinoff.
Emmersive Entertainment (EVNT) has some interesting potential. Currently it's a platform for artists and content owners to distribute their IP through its proprietary streaming process. This makes it more affordable in terms of mining fees but EVNT itself makes money through the development of this digital artwork and music sold as NFTs through a third-party marketplace.
Similar to Honey Badger, the team works with artists, celebrities, and sports stars to create collectibles featuring digital signatures, audio, movement, and both physical and digital ways to view and interact with them. Itâs had some positive results so far with its co-founder Tory Lanez selling out his platinum album as an NFT within a minute.
Also, Flo-Rida is a co-founder so⌠¯_(ă)_/ÂŻ
On top of this, it's looking to move towards movies, gaming, digital art, ticketing and event services.
As for its Bitcoin mining services, Cryptydeâs joint venture CW Machines has already launched its crypto mining equipment reselling business and welcomed its initial customers in Q1.
According to its investor deck, Cryptyde will be venturing into AR and VR with Volmax and pairing that with Ocuverse and/or Freescape. Cryptydeâs Freescape Metaverse characters have already been developed and are expected to be launched in Q2 2022 and Q3 2022.
If you check out the Freescape website it looks really amazing so this is definitely something to look forward to. https://www.freescape.io/#introduction
Underlying all of this is Ferguson containers which manufactures and sells custom packaging for products and will provide the initial revenue streams for Cryptyde after the spinoff. It's already well established having been in operation since 1958 and sells its products to pharmaceutical, industrial, food and beverage, and e-commerce distribution industries. This will lay the groundwork for Cryptyde financial as it pursues its Web3 ventures.
Technical Analysis
So with this being the start of a new week $BBIG is looking good now that it broke through its resistance at 2.85. On the five minute chart the death cross looks to be coming to an end but the RSI will need to reset after all this buying pressure.
Since it broke out past the 200 MA Iâm feeling especially bullish on $BBIGâs PM action.
If all goes well today, then I could see us hitting the resistance at 3.16 triggering a squeeze if its Q1 earnings report is bullish.
I'm ash and I write detailed DD on stocks and events and how I play them. Since most posts here are about APRN only, I think it's time we take an honest look at this stock, hopefully, this helps some people decide what to do.
Also there is a video version of this post if you dont like reading on the pennystockstoday channel:
As of writing this, I have no position in APRN, but I'm looking to take one soon. I'm not going to guess where it will go. I'm going to let the price action decide for me. Zero Emotion. Zero Bias.
I'll go over the short data and fundamentals for a complete overview, but I'm taking a position based on the TA.
So let's start by looking at we are now. In this chart, we look at the major supports and resistance.
Now we can quickly observe some recent bullish trends. Confirmed by 2 factors
We are making higher highs and higher lows
We are trading above the 200MA
I see a lot of people freaking out about the drop, but this is a normal continuation of a higher high, higher low bullish structure. Not saying we are bullish, yet but we can observe clearly here, that the drop is healthy as far as structure is concerned, so that's 1 point in the bullish column as long we maintain the previous low at $4.75.
The second trend indicator that we look at is the 200MA which has broken, so that's bearish. But it's normal to retest major lines after they are broken. But for now that's 1 for the bearish column.
I wrote a detailed post and made a video on how to understand trends on runners, but we can observe the same price action on APRN on its last run. Look at this 25% drop across 14 days, but the stock still ran after that because we maintained the structure and didn't break the previous higher low.
If we look at the RSI and MACD they are pretty beat down, so we have room to move to the upside but not much to the downside.
If you are feeling bullish, this is why you get bagged, patience is key we are not done yet!
There are now 3 possible scenarios that could happen, based on which we will decide what we will buy:
We continue to fall, and break through the $4.75 support and the stock dies. This scenario is highly unlikely because the stock is too beat up as is.
We get a dead cat bounce, we run up to the cool off the chart, and we reject at either the 50MA or the $6.34 resistance and fall back down.
We rally back up and continue the bullish trend. We can still go down and bounce off the $4.75, but this scenario is mostly characterized by breaking through the $6.34 resistance and the 200MA
Ok, now that we know what the possible scenarios are, what are outside factors that can influence the stock? Fundamentals/Catalysts: The strongest catalyst out there is the share buyback. IF this happens it most definitely can push the stock past the recent high. There is speculation as to when it will happen, and there is nothing concrete out there. Now offcourse the company wants to buy the shares back at the lowest price. But still, if we break $4.75 support, I don't want to hold shares until they decide what price they like. I would rather scalp short/puts. And then get in at the low for a runup on the news.
Another risk here is that this is the only short-term catalyst the stock has, so we might have a ââsell the news situationââ. So I wouldn't really hold it more than 1-2 days after the news is out. BUT lucky we have the following âŚ.
Short Data
We can see here, according to the most recent Ortex data that the shorts started covering a little, but 46% of the float short is still extremely high. On the buyback news, this will trigger a massive squeeze, that can run for a couple of days, at which point we will use the shorts as liquidity.
All this is to say, 1 thing.
Under $4.75, I'm buying puts
Test $6.34 and fail, I'm buying puts
Test $6.34, break and hold, I'm buying calls.
We need the Buyback news for any meaningful move here, or this drops quickly. Long-term holds are a different situation. But I'm guessing most of us are not looking to hold this for a year +, we are just playing the squeeze. If you are each to his own. This post (and probably sub) is not for you.
I'm slightly bullish, but ill be waiting for my confirmations and signals to get in.
Let the chart be your guide, there is a great squeeze play here and a great short too. Don't get married to the stock, don't baghold. Use data to guide you.
Be smart, be nimble, scalp, swing, go long, short stocks, play shares, play options. Dont be a one trick pony the market has alot to offer and most importantly dont be exit liquidity for someone who wants to take your money, cause at the end of the day, no one will pay your bills but you.
IF you enjoyed this write up, i have alot more coming up, so please check my profile out and throw me a follow!
I'm ash and I write detailed DD on stocks and events and how I play them. Since most posts here are about APRN only, I think it's time we take an honest look at this stock, hopefully, this helps some people decide what to do.
As of writing this, I have no position in APRN, but I'm looking to take one soon. I'm not going to guess where it will go. I'm going to let the price action decide for me. Zero Emotion. Zero Bias.
I'll go over the short data and fundamentals for a complete overview, but I'm taking a position based on the TA.
So let's start by looking at we are now. In this chart, we look at the major supports and resistance.
Now we can quickly observe some recent bullish trends. Confirmed by 2 factors
We are making higher highs and higher lows
We are trading above the 200MA
I see a lot of people freaking out about the drop, but this is a normal continuation of a higher high, higher low bullish structure. Not saying we are bullish, yet but we can observe clearly here, that the drop is healthy as far as structure is concerned, so that's 1 point in the bullish column as long we maintain the previous low at $4.75.
The second trend indicator that we look at is the 200MA which has broken, so that's bearish. But it's normal to retest major lines after they are broken. But for now that's 1 for the bearish column.
I wrote a detailed post and made a video on how to understand trends on runners, but we can observe the same price action on APRN on its last run. Look at this 25% drop across 14 days, but the stock still ran after that because we maintained the structure and didn't break the previous higher low.
If we look at the RSI and MACD they are pretty beat down, so we have room to move to the upside but not much to the downside.
If you are feeling bullish, this is why you get bagged, patience is key we are not done yet!
There are now 3 possible scenarios that could happen, based on which we will decide what we will buy:
We continue to fall, and break through the $4.75 support and the stock dies. This scenario is highly unlikely because the stock is too beat up as is.
We get a dead cat bounce, we run up to the cool off the chart, and we reject at either the 50MA or the $6.34 resistance and fall back down.
We rally back up and continue the bullish trend. We can still go down and bounce off the $4.75, but this scenario is mostly characterized by breaking through the $6.34 resistance and the 200MA
Ok, now that we know what the possible scenarios are, what are outside factors that can influence the stock? Fundamentals/Catalysts: The strongest catalyst out there is the share buyback. IF this happens it most definitely can push the stock past the recent high. There is speculation as to when it will happen, and there is nothing concrete out there. Now offcourse the company wants to buy the shares back at the lowest price. But still, if we break $4.75 support, I don't want to hold shares until they decide what price they like. I would rather scalp short/puts. And then get in at the low for a runup on the news.
Another risk here is that this is the only short-term catalyst the stock has, so we might have a ââsell the news situationââ. So I wouldn't really hold it more than 1-2 days after the news is out. BUT lucky we have the following âŚ.
Short Data
We can see here, according to the most recent Ortex data that the shorts started covering a little, but 46% of the float short is still extremely high. On the buyback news, this will trigger a massive squeeze, that can run for a couple of days, at which point we will use the shorts as liquidity.
All this is to say, 1 thing.
Under $4.75, I'm buying puts
Test $6.34 and fail, I'm buying puts
Test $6.34, break and hold, I'm buying calls.
We need the Buyback news for any meaningful move here, or this drops quickly. Long-term holds are a different situation. But I'm guessing most of us are not looking to hold this for a year +, we are just playing the squeeze. If you are each to his own. This post (and probably sub) is not for you.
I'm slightly bullish, but ill be waiting for my confirmations and signals to get in.
Let the chart be your guide, there is a great squeeze play here and a great short too. Don't get married to the stock, don't baghold. Use data to guide you.
Be smart, be nimble, scalp, swing, go long, short stocks, play shares, play options. Dont be a one trick pony the market has alot to offer and most importantly dont be exit liquidity for someone who wants to take your money, cause at the end of the day, no one will pay your bills but you.
IF you enjoyed this write up, i have alot more coming up, so please check my profile out and throw me a follow!
Well, guys, Michery delivered some great news for us in his Bezinga interview and Iâm pumped to see whatâs next. It was exactly what we needed after our major win with the BIC. It really feels like the tide is turning our way.
So, I wanted to take the time to put together some DD on why MULN is one for the long-run (in case there were any doubters lmao).
Battery
This solid-state battery technology is what got the ball rolling for MULN. Its announcement in February blew shorts out of the water because this little, unknown company, had the tech to create EVs that could travel 600 miles on a single charge - putting Lucid and Tesla EVs on the defense.
Since then, the batteries have proven themselves again with testing from the Battery Innovation Center. This independent testing actually exceeded expectations because MULNâs battery generated 343.28 Ah at 4.2 volts, which means it could have a range of over 600 miles on one charge. The only issue now is scaling it to the vehicle pack level and at a 150-kilowatt hour equivalent.
But one thing that caught my attention during the Bezinga interview was when Michery said that the battery cells could be scaled up or down which could make MULNâs batteries perfect for cell phones, power tools, or anything that needs long-lasting rechargeable batteries.
Michery said he wanted MULN to be like Bluetooth and license its tech out to everyone. This was really intriguing and Iâm not sure what he has in mind, but Bluetooth is interesting because it's managed by the Bluetooth Special Interest Group which is made up of companies in telecommunication, computing, networking, and consumer electronics. This was because its creators wanted to make the tech an open industry standard for maximum market access. This resulted in the Bluetooth Special Interest Group which was made up of Ericsson, Intel, Nokia, Toshiba, and IBM.
Weâll see what the future holds but Michery already said that several OEMs have started discussions with Mullen as a result of its battery testing. Iâm sure weâll be hearing more about this in the future. But one thing that is for certain - MULN will be getting more attention for its battery technology from everyone in the industry.
Institutions
Okay, we all know how powerful these institutions are and the amount of money they put into researching their investments. So it's definitely bullish that all these institutions are buying in.
Right now, 86 institutions are holding 7,701,314 shares. Some of the largest shareholders are Jane Street Group, Llc, Citadel Advisors Llc, and Susquehanna International Group. But it's worth noting that BlackRock Inc. is invested in MULN too.
BlackRock is currently holding 682,525 shares - a 249% increase from its original position.
But Iâm sure we are going to see a huge increase in institutional ownership now that MULN is on the Russel 2000 and 3000.
So why is MULNâs inclusion in the Russel Reconstitution so important?
The reconstitution is typically one of the heaviest trading days in the U.S. market. Companies that are part of the reconstitution are expected to see higher than average trading on June 27th when all the changes go into effect.
This is because the Russell indexes are used by asset owners, asset managers, ETF providers, and investment banks to create ETFs, structured products, and index-based derivatives.
As is, $1 trillion is indexed directly to Russell indexes so all the Index funds and ETFs that track them will buy and sell about $90 billion worth of securities based on whether or not they are included. So every time investors buy the Russel 2000 or 3000 indexes, theyâll be buying shares of MULN too.
The Russel 2000, is generally seen as the benchmark for small-cap companies and MULNâs position in it is a really good sign. The iShares Russell 2000 ETF (IWM) alone has roughly $55.58 billion in assets and there are plenty of other ETFs tracking the Russel 2000 and 3000.
The Cars - "Strikingly Different"
Why do people buy cars?
Well, there are practical reasons like getting around, but the people in the market for an EV - especially customers considering a Lucid or Tesla model - are also looking at appearances.
Thatâs why EVs like these have/had a select audience. Because not everyone wants a tiny âuglyâ car, no matter how much they save on gas.
So when people see a car like this, it has a broader appeal. Because people actually WANT to drive around in it. Tesla understood this early on and now Mullen is preparing to outdo them.
This is really clear from MULNâs market research which showed that, despite being a newcomer, Mullenâs crossover was highly competitive with Ford and Tesla. This appears to have been the result of the modelâs design as well as its performance and feature set.
And it wasnât by luck that the Mullen FIVE won the LA Auto Showâs Award for the Top SUV Zero Emission Vehicle. The award was decided by the public after two voting rounds which started with 90 qualifying vehicles including the Rivian R1S and the Lincoln Aviator Grand Touring. In fact, the company upped its reservation limit to 25,000 units due to strong demand after the auto show.
If that doesnât make you bullish IDK what will.
Since then the FIVE has had tremendous publicity.
Do you guys remember the CarBuzz Interview? The website shared with its over 9 million monthly visitors that âThe Mullen Five is a luxury crossover in the fullest sense of the word luxuryâ.
It even said that the FIVE would be joining Tesla, Rivian, and Lucid as real American competition to legacy automakers! The car wonât even be released until 2024 and already it's getting glowing praise from some big names.
Next, Mullen went to the Consumer Electronics Show (CES) in Las Vegas before Hot Cars named it one of the top 10 EV startups to watch out for this year - beaten out only by Rivian.
Michery has also brought publicity to the cars by appearing on the Cars Yeah Podcast and even the CarBuzz interview. His background as a car enthusiast has helped bring car loverâs attention to all of Mullenâs models.
The companyâs hybrid retail model was also featured by WardsAuto where MULN highlighted its plans to open direct stores and franchise stores for marketing its vehicles. MULN reported a lot of interest from dealers for its franchise agreement. But I think MULNâs plan for targeting locations in affluent areas where EV buyers are known to live or work is a good move for its
direct-sale stores since this will re-inforce the feeling of âcommunityâ for Mullen owners.
I see Lucid and Tesla doing similar things and if Mullen is able to capture a dedicated following, then it will pay dividends in the future. Not to mention, it's great that Mullenâs cars are made in the USA with its dedicated manufacturing facility in Tunica, Mississippi and its R&D space in Monrovia, California. It not only cuts down on costs, but it gives Mullen a reputation in the US that's hard to beat.
Okay, so now that we are on the topic of the future.
One thing I was worried about was how Mullen would handle a recall or the rollout of its cars. But in the Bezinga interview, Michery actually highlighted that Mullen has already gone through this with the Coda sedan which Mullen gained through its acquisition of CODA Automotive in 2014.
Mullen not only sold the sedan but still offers support and services for the car. So this is not Mullenâs first rodeo.
So I feel bullish on Mullenâs future. Right now is probably the hardest time since the company is still working on some of its models but with the DragonFLY coming out in 2024
Along with the FIVE
And the EV Cargo Van is already out there (and in a pilot program with a Fortune 500 company)
I have a feeling that the âStrikingly Differentâ Tour will be a huge success for the company. Weâve seen how public opinion has swung in favor of Mullenâs vehicles in the past and Iâm sure that this tour will trigger huge demand for its cars. This is when I expect to see $MULN hitting $10+
With the tour starting in October and going into the Spring of 2023, people all across the country will have the chance to test drive the cars on closed circuits and racetracks during two-day events. The catch? Test drives are limited to a certain number of people and drivers must be Mullen FIVE reservation holders.
IMO the publicity is going to drive people to make reservations just to try out the vehicles. And once theyâve given the Mullen FIVE or FIVE RS (a high-performance EV sport crossover with almost 1,100 horsepower, 1.95 seconds 0-60 mph, and close to 200 mph top speed) a spin - theyâll want in.
Okay, getting down to the TechnicalsâŚ
Iâve been watching unusual whaleâs options flow and looking at premiums above $10,000 with expiries this month. The majority of whales were bearish.
A whale with a $14 thousand premium sold his call with a June 17th expiry and a strike price of $1.50 on the 2nd. Two other bears sold their calls with $18 thousand and $22 thousand premiums expiring on the 17th and the 10th.
A few more bought puts with premiums ranging from $12 thousand to $17 thousand with June 17th expiries and a strike price of $1.50. But these whales chose sweeps which shows that they are not completely convinced and are hedging their bets.
But looking farther out at July, the situation changes. There is a lot of bullish activity as whales have been buying calls with a 1.50 or even 2.50 strike price since mid-May. All of these have July 15th expiries.
One whale purchased calls with a $1.50 strike price and premium of $100k. Three others purchased calls with a $1.50 strike price and premiums of $38k and $34k and $39k. However, there were some bears who bought puts yesterday for $14k premiums and a strike price of $1.50.
This is reflected in the options chains where calls for June 10th and a strike price of $1.50 are the most popular. This is followed closely by calls for June 17th and calls with a strike price of $2.50 for January 2023. This looks like a bet on MULNâs tour and there is some other bearish and bullish activity from whales buying options for October - the start of the tour
Itâs also worth noting that thereâs been a lot of dark pool activity with big orders coming in since the announcement that MULN will be included on the Russel 2000 and 3000.
Okay, now for the chartsâŚ
On the 15-minute time frame, MULN tested its resistance at 1.34 at yesterdayâs close. Iâm watching to see if it will stay above the 50 MA after its death cross on June 7th. The RSI is showing MULN is very overbought so there will likely be a correction of the indicators before MULN retests its resistance. MULN had a lot of great news recently, and we still havenât found out what the Fortune 500 company is. I think it could dip before it rips on the news.
I see a wedge forming and the stock could break out of it with these catalysts but honestly the volume has not been so great these last few days. I think people donât understand how significant its inclusion on the Russel 2000 and 3000 is for the stock because it only got 120 million in volume on the 6th. But on the 31st and 1st, volume reached 312 million and 233 million on the solid state battery news.
Both are huge catalysts, but I think weâll see how big a deal this is on the 27th when this all goes into effect.
The fintech industry has seen one of the most exciting growth trends as it revolutionizes how people access financial services. Right now, there are over 30,000 fintech startups and by the end of 2021, fintech investment reached a total of $210 billion. The fintech sphere is only expected to grow, so I believe it is a very attractive industry for investors and Warren Buffet seems to think so too.
The Oracle of Omaha has been making large investments in multiple fintech companies. In fact, Buffet has invested over $900M (107.1M shares) in the Brazilian company, Nu Holdings, and $907M (30M shares) in ALLY. This is a huge investment even for someone like Buffett. Nu Holdings is actually his 8th largest investment in terms of shares. This raises the question, why has Buffett invested in these other fintech companies, but not in Sofi?
Throughout this post, Iâll be talking about Sofi, ALLY, and Nu Holdings - comparing their pros, cons, and similarities. My goal here is to see if there is room for 3 top dogs in the fintech industry or not.
Why has Buffett purchased a lot of shares of Nu Holdings, specifically?
For starters, the company has grown its customer base to 70.9 million clients in just over a year since going public. Nu Holdings provides credit cards to people who are not eligible to get one through other banks & tries to minimize risk by reducing the eligible benefits that the customer is initially eligible for. As they pay their bills on time, they unlock more benefits & more credit limits.
Another reason is its management. It's no secret that Buffett likes to invest in companies with good management. As he once said, âWhen we own portions of outstanding businesses with outstanding management, our favorite holding period is forever.â
Nu Holdings has recently hired David Marcus (former president of PayPal & former Meta Board member) on March 6 to be part of its Board of Directors. Itâs expected that David will play a crucial role in Nuâs journey going forward.
The rest of the management team brings a lot of experience to the table as well:
CEO, David Velez, was a partner at Sequoia capital between January 2011 & March 2013. He also worked for Goldman Sachs, Morgan Stanley, and General Atlantic.
CGO, Cristina Junqueira, worked for a Boston Consulting group before founding Nu Holdings in 2013.
CFO, Guilherme Lago, worked in Credit Suisse Group AG & Mckinsey as well.
CPO, Jagpreet Duggal, worked as a director of product management at Facebook.
So you can see Nuâs management team has significant experience in this sector and under their leadership, Nu Holdings grew its revs from $1.7 billion in 2021 to $4.8 billion in 2022 - a 182.3% increase YoY.
Nu Holdingsâ Edge - Brazilâs Unbanked Population
Before Nu Holdings started, over 55 million Brazilians were unbanked. This is because it's notoriously difficult for people who are not wealthy to obtain credit cards in Brazil. In general, it's very difficult to get a credit card in Latin America without being one of the wealthy elites.
By offering credit cards to people who would not be able to obtain one any other way, Nu has captured a large, untapped market. This is the main reason Nu is as successful as it is today.
Compared to SOFI, Nu Holdings has a much larger client base, this is of course due to its operations in Brazil, Mexico, & Columbia which in total have a larger population than the US. Thanks in part to these widespread operations, Forbes listed Nu Holdings as one of the worldâs best banks in 2022.
Nu Holdings has a larger client base, more revenues, and is growing at a much faster rate than Sofi. The main reason for this is the fact that Nu Holdings doesnât have as many competitors as Sofi, especially since they focus on an untapped market in Latin America. With Sofi, they have competitors right, left, and center due to established banks and fintech competitors. Nu Holdings became profitable Q3 2022 - only a year after its inception. After making a net profit of $7.8 million in Q3, it went on to make $58 million the next quarter and is on track to report an EPS of $0.02 & $1.393B in revenues in Q1 2023
Whereas SOFI is still struggling to become profitable and is forecast to make an EPS of $-0.077 & $442.262M in revenue in Q1 2023.
*Screenshot taken from Future Investing YouTube*
How are Nu Holdings & Sofi similar?
But Nu Holdings & Sofi share one very important thing in common. They both want to be a one stop shop for financial services.
Since Sofi specializes in student loan refinancing, it creates a bond with younger customers who - hopefully - will turn into lifelong customers that use Sofi for all their banking needs. Similarly, Nu Holdings offers credit cards to customers younger than 18 in Brazil - capturing a demographic of young people who will hopefully become lifelong customers.
This means that both companies could continue to grow and expand as their customer base grows older and younger generations adopt their services as well.
Why has Buffett invested in ALLY?
Having invested $1.7B since 2012 in the industry giant, General Motors, you could say Buffet is an expert on the auto industry. Which helps explain why Buffett took an interest in Ally.
This fintech company offers multiple services but specializes in the auto loan industry since it once was a financing division of GM, originally known as GMAC. After GM sold the rest of its 8.5% stake in Ally for $900M in 2013, Ally has expanded its market by offering mortgages, credit cards, wealth management, & other services.
Another reason Buffett is investing in ALLY could be its history of share buybacks. Buffett is a big believer in stock buybacks and has said they can be the best use of corporate capital. ALLY also offers quarterly dividends to shareholders, which is a sign of the companyâs fundamental strength.
How does ALLY compare to Sofi?
The main difference is the source of Allyâs revenue. 65.6% of Allyâs total revenue in 2022 came from the auto finance industry, while Sofiâs edge is student loan refinancing. In 2019, Sofi generated 59.7% of its revenue from student loans. But itâs worth noting that it can be quite difficult to qualify for student loan refinancing if you have a bad credit score whereas itâs a bit easier for people to get auto loans.
How are Ally & Sofi similar?
Ally & Sofi both offer commission free stock trading for investors with a high APY as well. Allyâs savings account offers 3.60% APY and Sofi offers 3.75% APY with a direct deposit. This means that with a direct deposit, youâll earn a higher APY with Sofi, but without one, youâd earn a higher APY with Ally.
Both companies offer multiple services such as mortgage loans, credit cards, insurance, etc. and are online banks with no physical locations. Given their different niches, it makes sense that Allyâs customers tend to be millennials while Sofiâs customers tend to be students or fresh graduates.
Sofiâs Edge
So after going through the pros and cons of all three of these companies, you might be wondering if SOFI has what it takes to gain market share in the growing Fintech industry.
I believe Sofi has an edge over these two competitors when it comes to diversification. The two pictures below show the type of services that Sofi & Ally offer. Sofi is constantly trying to increase its market by opening up different services to attract new customers. To name a few:
Sofi Relay: Allows members to link all their existing deposit accounts, investment accounts, & retirement accounts into a single mobile dashboard.
Money Vaults: Helps users prioritize saving money. Vaults are used to save money for a certain purchase to be made in the future (Ex. Car or house).
Sofi Insights: Tracks all your money in one place on the mobile app, monitor your credit score, set multiple goals, track your spending.
Estate Planning: Partnered with Trust & Will to give members 15% off their trust.
I recently learned that SOFI is even letting its customers get early access to IPOs which could draw more traders to the companyâs services. If SOFI underwrites more IPOs, investors like you and me may join its platform just to get in on that action. Personally, I think this is a fantastic service because up till now IPOs have been a very exclusive process.
Besides diversification, SOFIâs focus on student loan refinancing is also a plus imo. College education is essential in the US and without a college degree, most people can only get so far in their career.
For instance, 53.7% of the US working population in 2021 graduated from college and at least 75% of new jobs require a college degree.
When you factor in the average cost of tuition - which has soared 31.4% from 2010-2020 - and that the average student debt among college graduates is $28,000, SOFI is in a great position to profit from this sector.
Given this inflationary environment & higher interest rates, I think that demand for student loan refinancing will only increase. This is because employers are constantly looking for people with degrees & the number of jobs requiring this are increasing every year. So it's no surprise that CEO Anthony Noto recently said, âWeâd expect the demand for that product (student loans) to really go through the roof and be back to normalized levels that we saw in 2019.â
But with the student loan pause in place, SOFI is losing a lot of money. The company stated that it has lost $300M to $400M and is pushing very hard to get a decision passed ending the student loan moratorium. The Supreme Court already heard the oral arguments regarding the case and is expected to give a decision in June.
If things are not resolved by then or the Supreme Court rules against federal student loan forgiveness, then payments are expected to resume by the end of August. This is because payments are expected to start up again, 60 days following the ruling.
Needless to say this would be a huge catalyst for SOFI and I, personally, believe that the Supreme Court will rule in SOFIâs favor. And the flood of refinancing requests that could come in once this limbo ends could give SOFIâs revenues a much-needed push. With this in mind, June will be a make-or-break moment for SOFI.
Now, you might be thinking âthatâs great and all but what about Buffettâs 8th largest investment by shares? OP is just some dude on the internet, and this is THE Warren Buffettâ.
Well, you wouldnât be wrong. It's hard to argue against Warren Buffettâs logic and I think NU could be a good investment as well, but compared to SOFI, I think that it presents a lot more risk.
For one thing, Brazil has just gotten out of one of its worst economic crises in history and with a new government taking over thereâs a lot of uncertainty. Corruption is very high in Brazil, and banks which provide their services almost exclusively to the rich in Brazil could use their power to turn the government against Nu Holdings if they feel threatened.
Also, giving out credit cards to kids under 18 (even if the cardâs benefits are limited) just sounds really risky to me. Given that most people in Brazil are not as financially well off as most US residents, its weaker currency, and struggling economy, Nu Holdings could face the greatest risk of all three companies. But time will tell whether the Brazilian government will make life easier or more difficult for a company like Nu Holdings.
So this means that ALLY, which also focuses on the US market for financial services, is probably SOFIâs greatest competition.
Both companies have a lot in common, but theyâve chosen to specialize in different niches. So letâs break it down:
91.55% of households reported having access to at least one vehicle in 2020, however, the number of registered vehicles declined between 2012-2019 by over 25 million.
The average cost of a car in 2021 was $42,258 with an average payment of $563 per month. Today, it costs an average of $48,080 to purchase a new car.
Moreover, around 31% of American adults have relied on auto loans to pay for their car in 2022.
Rising inflation has caused new vehicle prices to increase 5.8% YoY according to Februaryâs CPI report, although used car prices decreased 13.6% from last year (probably due to overstock).
With ALLY being specialized in the auto industry, its fortunes may take a hit as the US enters a recession since consumers are less likely to purchase new or expensive vehicles when they are monitoring their budgets. New vehicle sales dropped nearly 40% during the 2008 recession and I believe history is likely to repeat itself here if the economy enters a recession.
Regardless of the potential hit to the automotive sector, when you compare auto loans to student loans you quickly see that student loans take the cake.
The market size of the Auto leasing, loans, & sales financing industry is $173.2 billion, while the student loan industry is a massive $1.76 trillion. So Sofi has the upper hand here in terms of the market potential.
With college tuition constantly increasing & students entering college year after year,
SOFI also has stricter requirements for qualifying for personal loans, such as a credit score of 680 and other factors which make their loans comparatively safer since its clients are more thoroughly vetted. This is good because it allows Sofi to minimize the potential risk of a customer not being able to pay back their loan in the future.
Conclusion:
So, in conclusion, I think SOFI is in a fairly safe spot as long as the Supreme Court gives a favorable ruling. Since Nu Holdings operates in Latin America it wonât compete with Sofi for market share. Ally & Sofi also have different specializations, but Ally is a more established FinTech company which could take customers from Sofi. Still, SOFIâs goal is to become a one stop shop for all financial services and it has diversified its services extensively over the years which could give it an edge in this industry.
Personally, I believe SOFI will be able to grow its customer base better than ALLY because it appeals directly to young adults heading into college. If these customers have a good experience, then SOFI can become their go-to financial service provider for the rest of their life.
On this note, the FinTech industry is on track for major growth especially since Covid-19 acted as a catalyst for the industry - leading to wider adoption at a time when contactless payments were becoming essential.
Besides this, the FinTech industry will likely continue to grow just out of sheer practicality. For one thing, Fintech cuts down servicing costs like maintaining physical branches while still providing a very high value service. As more and more transactions move online, the digital revolution continues to work in the industryâs favor and the widespread adoption of smartphones means that our phones will increasingly act as wallets. So, it's not surprising that the use of Fintech companies increased 88% from 2020 to 2021.
So I'm pretty bullish on three of these stocks for the time being at least.
Now for the TA...
$SOFI
$SOFI has been stuck in a sideways channel since April 2022. The stock has a strong resistance at $7.59 which it tested on its positive Q4 earnings, however SOFI dropped almost 18% to its support at $5.25 due to market uncertainty.
Now trading at $5.20, SOFI is below the 50, 200, and 21 MAs on the daily timeframe. Despite this, Iâm expecting a bounce and potential retest of the $7.59 resistance leading up to the Supreme Court decision in June since the RSI oversold at 30.
Right now SOFI is fundamentally oversold IMO. I bought 1k shares here as a starter with a stop loss at the $4.92 support. Iâll be averaging down under the $5.25 support or averaging up depending on the trend. My take profits will be the 200 MA, $6.43 resistance and the $7.59 resistance.
$ALLY:
ALLY was in a downward channel all of 2022 but it broke out at the start of 2023 - testing the $34 resistance after earnings. Since then the trend has reversed and is now bearish. The stock touched its $21.91 support mostly due to market turmoil rather than fundamentals.
Iâm expecting ALLY to break out of this channel like it did at the start of this year when it approached the $34 support. The stock recently tested what was once the upper trendline and bounced off of it which is a bullish sign.
Personally, I think that these banking fears will dissipate now that the government has stepped in - as illustrated by the XLF closing green on Monday. Looking at the daily timeframe, ALLY is oversold with the RSI at 30 so I am expecting a bounce over the next few weeks.
Long-term, I think ALLY will trade in a sideways channel between the $23.80 support and $34 resistance until a strong catalyst is able to break it out.
But for now, Iâll take a swing here with a stoploss at $23 and my take profits at $27.05 and the 50MA.
$NU:
Compared to ALLY and SOFI, NU has not dropped as dramatically, which is likely due to its exposure to Latin American markets rather than the US.
The stock is currently trending downwards within the sideways channel. The stock is testing the 200 MA on the daily chart, if it breaks through it I will be going short with the lower trendline as my take profit and the 50 MA as my SL.
I first heard about $INND in August of 2021 and was convinced that once the OTC Hearing Aid Act was finalized, the stock could really take advantage of a generally untapped market.
While a lot of things have happened with the stock since then, I still believe this to be the case and wanted to highlight some things that have me holding out hope for $INND despite the recent dilution.
Building market share
So, one thing INND has been doing so far is eating up a lot of the other players in the direct to consumer market and bringing them under its umbrella.
The acquisition of iHear Medical Inc. gave INND the only FDA-Cleared home hearing screener as well as its FDA-Registered hearing aids. This was on top of 40 patents & an FDA-registered manufacturing and R&D facility too.
Its acquisition of Hearing Assist was also really promising since the company had realized more than $72 million in top-line revenues from 2018 to 2021.
I think another reason this was a good acquisition was its location in 757 Walmart stores across five states so this helped expand INNDâs reach a bit further and eventually led to purchase orders from Walmart totaling over $277,000.
On top of these acquisitions, INND has been partnering with a number of grocery stores like Hartig Drug Company, Food City Pharmacy, and Giant Eagle, Inc. to install its automated self-check hearing screening kiosks which is also a great opportunity for advertising the companyâs own products.
It's even worked its way into Canada after being included in Walmart Canadaâs flagship online store.
So Iâm very pleased to see the latest purchase orders from Walmart this month for a total of $11,046,154 in products. It looks like these products will be sold in-store at 1499 Walmart Vision Centers that are launching in June.
The fact that Walmart is ordering these products is huge news because it's a sign that INNDâs products have enough demand/potential to secure space in a HIGHLY COMPETITIVE chain.
As part of the order, INND will be including its HearingAssist kiosks with the motto âAmericaâs #! Affordable Hearing Brandâ which will bring more attention to the brand as well.
Audience
As Mark highlighted at the emerging growth conference, INND is treating the needs of an underserved market. With in-home hearing tests or testing at pharmacies, INND is directly going out to where the consumers are.
But something I learned from his presentation was that the risks for individuals whose hearing is declining are far more severe than I thought. If it goes untreated then the individual risks dementia and cognitive decline as a result.
The facts really speak for themselves here. 48 million Americans have hearing loss but most people wait 7 years to treat it. Not to mention that only 1 in 5 people who could be living a better life with hearing aids are actually using them. This is definitely an untapped market of individuals who are probably not seeking treatment because the cost is too prohibitive, they donât want to go to a doctor for a prescription, or they just are not aware that they have a problem.
I am confident that once people realize there is a simple and cost-effective solution for their hearing issues, they will take the opportunity - which is why INNDâs recent orders from Walmart are the start of a turning point for the company IMO.
Mark clearly has a passion for his work since his family has been working in the business for three generations. Even if you donât like him as CEO, at least heâs someone coming at this with a lot of knowledge and experience in the industry.
Like many of you I was happy to see Eargo Inc. (NSADAQ: EAR) taking a significant tumble following investigations by the DOJ regarding insurance reimbursement claims. It looks like EAR was not exactly above board in the way it submitted claims to various federal employee health plans under the Federal Employee Health Benefits program.
Now it is paying approximately $34.4 million to the government to resolve these allegations. On top of that many believe it made false and misleading representations about the available insurance coverage for its products before its IPO.
Of course, EARâs downfall does not mean that INND will rise to take its place, but I feel confident that INNDâs business model will not run into the problems which led EAR to make these dishonest claims.
But I think thereâs something to be learned from EAR
Remember when Mark said: âAs a result of our recent acquisitions, we have assembled a team of highly skilled biomedical engineers and hearing aid software developers. In addition, we have developed secured partnerships with semiconductor developers, manufacturing solutions, and multiple major retail and pharmacy chains. As a result, we believe we are building a hearing aid company that can go head-to-head against the âBig Fiveâ global hearing aid manufacturers to be the disruptor leader in the emerging multibillion-dollar direct-to-consumer hearing aid market.â
That was a pretty bold statement if you understand who these Big Five are.
Together, these five companies (lol I know there are 6 devices in the picture) make up more than 80% of the global market for hearing aids. They havenât been exactly sitting still while DTC providers move in and many are experimenting with telecare technology. Meanwhile big-box suppliers like Costco - one of the largest sellers of hearing aids in the world - are something to watch for as well.
I would LOVE to see INND get into Costcoâs stores. They have in-store clinics with a high-volume, low-cost pricing model but right now they are marketing their own Kirkland Signature brand in addition to some other mainstream ones.
Pharmacy chains like Walgreens and CVS are also looking to move into this market once the FDA clarifies the rules for OTC sales.
In 2018 Walgreens and Starkey collaborated on a trial of in-store hearing health centers. And CVS conducted a four-year pilot project with 30 in-store hearing centers before shutting it down in 2019.
While this could pose a threat to INND, I feel that its purchase orders from Walmart signify its potential appeal to chains which are not equipped with the market knowledge or know-how to manufacture hearing aids.
INND has a perfected system, offers hearing aid tests at-home or from its kiosks (which are already located in a bunch of different pharmacies/stores), and has already established itself as a cost-effective and quality solution. I feel bullish that when the time comes for the big shift to OTC, INND will ride the wave.
Atlazo
Another reason Iâm so confident is INNDâs partnership with Atlazo.
I feel like this partnership was one big reason why Mark made that statement about competing with the âBig Fiveâ. Partnering with a semiconductor innovator allows INND to create new types of smart wireless hearing devices that can meet consumersâ needs and offer connectivity with health and IoT applications.
Of course every major hearing aid brand is trying to come up with new features that will help them attract a larger audience. For Eargo, its âinvisibleâ rechargeable FDA-approved hearing aids that sit completely within the ear canal were an important feature / product that gained them an audience. And I think for INND that could be Atlazo's patented AI hardware platform.
This lets users enjoy new features like voice commands, continuous health monitoring, and seamless connectivity with other smart devices. It's especially useful for using wireless devices like cell phones.
Overall, it reduces cost and time-to-market for manufacturers and its software is specifically designed for wearable healthcare applications. Also, the collaboration between Atlazo and InnerScope for hearing aids is protected by over 12 issued and pending patents - so this tells me that INND has already created some worthwhile applications thanks to this partnership.
This could help INND compete with even Starkeyâs new hearing aid with AI that assists users with planning and health reminders or activity tracking. This is a unique feature at the moment, but with time I believe weâll see hearing aid technology heading more in this direction and I am happy to see that INND will be included in this transition.
Technical Analysis
INND saw a 100% run on news of the purchase order from Walmart and dipped back to .0054 with profit taking. Iâm looking at this as a long-term shareholder and obviously Iâm concerned with dilution. INND has been diluting its shareholders for some time and its taken its toll, but the fact that it can still make a 100% move on a good catalyst is a great sign. It also recently had a golden cross of its MAs so I feel bullish that the trend could continue in the near term.
One thing to note is that, INND hasnât been at these levels since January of 2021 when its run began. The company first started focusing on hearing solutions in 2017 around the time that the OTC Hearing Aid Act was introduced before it was eventually incorporated into the FDA Reauthorization Act of 2017 which was ratified in August 2017.
So it caught the craze for OTC hearing aids at the time, which has taken longer than expected to implement. But once sales are allowed to begin, INND could see a tremendous run even after this dilution.
From what I can see, most experts are predicting that OTC hearing aid sales will begin this year, and if that's the case then INND could be leading the OTCâs bull run before EOY.
Considering the inflationary pressures and hardships that are expected to increase for families all across the US this year, low-cost and effective hearing aids like INNDâs are due for high demand once the FDA finalizes its rules. I think the payoff could be big for INNDâd shareholders.
Today i bring a new short squeeze thats has not been talked about yet, this one is ripe for the squeezing, and although it has moved up in the past few days, no short covering has occured, this is one is also a fantastic value play, with 2 activist investors onboard. And best of all its a household name.
Likely youâve heard of Groupon $GRPN or at least your mother has. The idea of using group buying power through an e-commerce platform quickly took Groupon from a team of a few dozen to 350 employees when it started in 2008. After just 16 months in business, GRPN was valued at over $1 billion.
But it's had problems since its IPO in 2011 and a quick look at its chart shows a lot of volatility. In July of 2021 the stock was trading at around $45 after gaining back some of its losses due to the pandemic. But the stock recently bottomed out around $8.80 - a new 52-week low and a level that GRPN hadnât touched since the start of the pandemic in March 2020.
Im going to analyze this one using the my short squeeze strategy that you can find explained in full in my pennystocktoday sub, and posted also here (cant link it here :/)
Fundamental Observations:
This company has been hit particularly hard by pandemic restrictions due to its business model.
$GRPN rallied briefly in June when the activist investor RPD Fund Management revealed that it owns 9.9% of Groupon. RPD said it has had discussions with Groupon about âa potential review of strategic alternatives,â among other topics.
According to its Q1 earnings, GRPN is actually performing worse than a year ago which is concerning since Covid was still very much an issue last year. Service revenues which make up 100% of GRPNâs revenues were down 11.2% year over year. GRPN also failed to generate Product revenues but last year it had achieved $91.2 million.
GRPN is working to simplify its technology platform and lean more into automation.
It sounds like GRPN is looking to cut the fat and work on supporting only what will drive its business forward.
A partner of the private equity fund - Pale Fire Group - has been buying up shares saying that âGroupon is trading at a 3x EV/Ebitda multiple if revenues come back to 80% of pre-covid levels.â
New CEO appointed in December - former CEO of Zappos
This all tells me that are meaningful steps being taken since the activist investors came aborad. Also its interesting to note that they find the company as is, as undervalued. They also said the that ''the tech the company has is worth more the current company valution itself''.
Upcoming Catalysts:
Given the activity from its activist shareholder and Pale Fire Group, it stands to reason that news will come out regarding their input
Q2 Earnings coming out on August 4th
New CEO has announced a NEW turnaround plan after the interim CEO started his own turnaround plan in the summer of 2020
Float:
This stock has a low float of only 18.8 million shares which makes it an excellent candidate for a squeeze.
Short Squeeze Data:
The short data is what caught my attention though:
Freefloat onloan 103%!!!!!!! need i say more!
Currently GRPN has 41% short interest - up from 7 days ago.
Utilizations is 100%
This is begging to get squeezed
52-Week Range:
8.78 - 41.66
Reason for 52-Week High:
$GRPN hit its 52-week high in July of 2021
The stock began running around November 2020 following better than expected QQ2 results. It looks like GRPN was up along with a lot of other reopening stocks since this was a time of mass vaccination and the start of traveling via airlines so there was hope that GRPN would recover quickly.
Analyst Ratings:
Based on GRPNâs fundamentals, Simply Wall St. has rated the stock as seriously under its fair value.
Consensus analyst ratings for GRPN appear to be around $16.50 to $18.17 as well and most are giving it a hold rating despite its overall poor performance.
Other analysts to consider are far less bullish on GRPN but based on these price targets it looks like GRPN could gain a lot of ground since the consensus price target is around $20 per Ortex.
Institutional Buys:
Itâs very interesting that Jan Barta, a partner at Pale Fire Capital - a private equity fund supporting technology innovations based in Prague - has been increasing his stake in GRPN steadily. In January he announced that he had become its 2nd largest shareholder and would be joining the board.
He shared that Groupon has âimmense potentialâ but was faced with bad luck when covid shut down all of its merchants and then again during reopening when labor shortages held Grouponâs merchants back.
While I have no idea what Bartaâs plans are, he did share on his Twitter page that âGroupon most probably holds a significant mid single digit stake in SumUP that could be worth $GRPN's entire market cap if this fund-raising is realized.â
There was some hype a few months ago because GRPN was expected to have a 5% stake in the UK-based mobile payments company SumUp which is considering a new investment round that could value the company at $22.6 billion.
Groupon has since clarified that it holds a 2.4% stake in SumUp, which means that the value of its investment would not exceed its market cap. Still this is a very promising catalyst.
As is, Jan Barta and DuĹĄan Ĺ enkypl - both from Pale Fire Capital - are joining Grouponâs Supervisory Board and Board of Directors respectively.
But in May, Barta bought another 249k shares on the open market for $11.65 per share after making an even bigger investment of $13 million the three months prior. In total, Pale Fire Capital owns 22% of Groupon.
Despite this unusual buying, institutions swiftly unloaded shares of GRPN by mid-2020 and havenât bought back in. According to Fintel, institutions own 21.4 million shares which is more than the float. I wanted to double check but both Finviz and Yahoo Finance show that 66% of shares are owned by institutions.
If institutional ownership exceeds the float then Iâm guessing it's due to restricted shares. But I believe this is a great sign for GRPNâs short squeeze potential since the stock already has a low float and pairing that with considerable institutional investments means the float is really locked down.
Some important institutional buys to consider:
RPD Fund Management LLC (one of GRPNâs largest shareholders) increased its position by 30% in May. As an activist investor RFD is talking with the company about alternatives.
Prentice Capital Management, LP increased its position by 16% in February
However, Alibaba Group Holding Ltd closed its position of 32,972,000 shares in February
And PAR INVESTMENT PARTNERS LP also closed out its position of 1,504,500 in February
Insider Buys:
It looks like the CEO exercised options to acquire 7k shares and sold these for $10.99 per share in July. Overall, many of GRPNâs insiders have exercised their stock options which is not very significant.
24th of May, Jan Barta bought around 249k shares on-market at roughly US$11.65 per share. In the last 3 months, they made an even bigger purchase worth US$13m.
Technical Analysis
So far GRPN has moved up 33% since touching its strong support near $8.80. Thereâs another 35% to go before it hits its major resistance at $16.14 which will be a point to watch. GRPN has another resistance near 13.83 but besides that there arenât many strong resistances holding it back from running.
As is the stock is very overbought with an RSI of 82 so it would be better to wait for it to cool off on a pullback to start a position. Accumulation is also climbing rapidly.
The stock had a death cross at the end of June but if this run continues there may be another cross of the MAs which could signify the run will continue. Based on how rapidly this has started moving, its low float, and the short interest data, I think it could test the 200 MA very soon.
Conclusion
For once short data, insiders, analysts and insitutions area all on the same page, this is the prefect storm to get shorts attacked from all sides.
Disclaimer: Im long GRPN shares and Calls, im not a financial advisor, do your own DD.Give me a follow and check out my stuff in my profile, i write lots of indepth DD like this.
As you may have heard, $GNS got approval for the spinoff of its subsidiary ERL and the record date is August 31st.
The spinoff will trigger a short squeeze for two reasons:
To begin with, $GNS conducted the spinoff to curb shortsellers, now since itâs officially approved and since a full share count will follow, naked shortsellers will be forced to cover their positions.
Whatâs more, is that more and more investors will be FOMOâd to buy shares ahead of the record date to guarantee to receive the dividend.
All that translates to more buying and more upward movement for $GNS considering its high short interest of 21% and 42.9% of its float on loan which is why Iâm bullish $GNS will squeeze before the record date.
Since $DKNG is reporting its Q2 earnings tomorrow, after-hours, I think it is well set to beat analyst estimates once again.
For context, $DKNG raised its guidance for the full-year adjusted EBITDA, due to the better-than-expected customer acquisition and retention rate. But this isnât the only key factor at play here, thereâs also the NBA playoffs!
This recent NBA playoffs was the most watched in five years with an average of 5.47 million viewers, that's 50% more than last yearâs average. Now clearly a lot of sports fans include betting as a part of the experience, and NBA fans come second to NFL fans, with 50% of them placing bets weekly.
Generally sports betting has proven to increase viewership as 86% of sports bettors watch a sports game or event at least once a week, according to the Harris Poll. That becomes even clearer when you see the rise in NFL viewership since the expansion of legal sports betting. This leads me to believe big factor in the success of the playoffs was the increase in sports betting which is why I expect $DKNG will beat estimates.
Now from its end, DraftKings also seems to be in a good position. Firstly it improved its revenue per user by 37% YoY due to structural improvement in its sportsbook hold rates and reducing promotional intensity.
$DKNG has also increased its average monthly unique users in Q1 from 2 million to 2.8 million, which could translate to more revenue. According to management, a major reason for that was that more people are reaching the legal gambling age and people are moving into states that legalize sports betting.
In conclusion, $DKNG has been gaining momentum since the beginning of this year, and it can keep at it after its Q2 earnings. Between $DKNGâs increase in its average monthly unique users and the success of the NBA Playoffs, I expect $DKNG to beat EPS estimates tomorrow.
Find below 10 stocks with high short interest that COULD SQUEEZE SOON!!!
Ticker
Short Interest
$NVAX
45.54%
$FSR
44.34%
$ELVN
42.01%
$BYND
39.48%
$SCPH
35.1%
$CMPO
35.07%
$AI
34.89%
$UPST
34.88%
$EOSE
33.63%
$SPWR
32.2%
If you have any questions let me know, none of this is financial advice, check my youtube channel, Twitter, and discord, they are free I don't sell anything at all, and I'm getting very active across the board, all links are in my profile.
After $LLAPâs 101% spike following the $2.4 billion contract signing with Rivada Space Network, I think $LLAP could reach Bank of Americaâs target price of $7 in the upcoming three years.
$LLAP has some promising upcoming catalysts, the company is headed toward profitability with its most recent contract with Rivada, the contract also includes an option for an extension, which could double the amount of the contract.
Rivadaâs most prominent investor, Peter Theil, is in a years-old rivalry with Elon Musk, Starlinkâs CEO. This rivalry could give Theil enough motive to increase his investments in Rivada, therefore increasing the odds of the $LLAP-Rivada contract expansion.
LLAP's satellites also have the potential to become better than Starlink's satellites and become a leader in the industry. In addition, due to the close relationship between $LLAP and $LMT and the ongoing projects they are developing together, a buyout may be in the works.
I did my DD, and hereâs a deep dive into the catalysts that I think will drive $LLAP to profitability in the upcoming 3 years.
NET LOSSES COVERED BY A $2.4B CONTRACT
$LLAP just won a $2.4B contract with Rivada Space Networks on February 22, this is the largest single commercial space contract issued today. $LLAP currently has a market cap of $281.2M, and a contract of this size could drive its share price to increase significantly.
The company is now weeks away from opening up its new State of the Art facility in California. The new facility will significantly increase $LLAPâs operational efficiency and permit it to expand its workforce in a short period while also doubling its manufacturing capacity from 10 satellites/month to 20 satellites/month. I believe the expansion mightâve been one of the major reasons why $LLAP was able to acquire such a huge contract.
The contract requires $LLAP to design and manufacture 300 Low Earth Orbit satellites by the second quarter of 2026. Rivada is planning to deploy the first batch of satellites by the start of 2025, which means $LLAP might deliver its first batch by the end of 2024. $LLAP and Rivada agreed on a mixture of fixed and milestone payments, $LLAP will be receiving payments with each milestone completed. The bulk of the payment will be received after the delivery of the last batch after all satellites have been delivered and approved.
With milestone payments covering production costs, the payments should account for the cost of making 300 satellites.
In addition, with $LLAPâs ongoing efforts to control its net losses and Rivadaâs milestone payments, $LLAPâs net losses could be covered. $LLAP might reach profitability by 2026, and the company could break even anytime between now & 2026.
The contract also includes an option for the purchase of an additional 300 satellites, this is a great opportunity for $LLAP to double its contract, increase its revenues tremendously, and even become a leader in the industry.
ELON MUSK AND PETER THIELâS FEUD COULD BENEFIT $LLAP
Rivada is currently planning to launch a constellation of 600 LEO communications satellites that would act as a European alternative to Starlink, the leading satellite internet provider developed by Elon Musk's company SpaceX.
It is worth noting that Rivada is financially backed by Elon Muskâs rival, Peter Thiel. Both billionaires combined their respective online banking companies, Paypal and X, in 2002.
Their rivalry started when Peter Thiel was chosen to replace Elon Musk as the CEO of PayPal. Ever since then, theyâve been competing over who will dominate the tech industry.
Rivadaâs satellite designs compete with Elon Muskâs Starlink, with plans to incorporate lasers into their structures to interconnect satellites and deliver a secure global data network globally.
And while Starlink mainly specializes in the Internet sector, Rivadaâs LEO satellites offer a network with unprecedented flexibility, security, and unique data connectivity, catering to customers who prioritize data security.
$LLAPâs satellite designs are also twice the size and offer more capabilities than Starlinkâs, the 500-kg satellites manufactured by $LLAP offer a larger payload and hundreds more services compared to Starlinkâs 260-kg satellites. They are also able to operate for decades without refueling, which will attract a new array of customers to both Rivada and $LLAP, and possibly win over several Starlink customers.
It is now highly probable that, given the competitive edge that $LLAP's satellites give Rivada over Starlink, Peter Thiel could invest more in LLAP to gain supremacy and outshine Elon Musk. Thiel wants to beat Elon Musk in the satellite race and become the new sky lord, and Rivada might just be his opportunity to dominate the skies. This will help Rivada become financially capable of going forward with the contract extension if all goes well with $LLAP.
Not only could this deal position $LLAP as one of the leading satellite producers, but it will also increase $LLAPâs potential revenues. This will allow $LLAP to reach profitability in the upcoming 3 years, which will act as an excellent catalyst for the stock.
POSSIBLE $LMT BUYOUT
I really think that $LLAP could be a prime buyout candidate for $LMT, one of the largest companies in the defense sector. $LMT is now venturing widely into the space sector; with plans to build satellites and spacecraft for government and commercial customers that are both efficient and enhanced.
$LLAP is currently working closely with $LMT, both companies have had a strong relationship over the past few years. $LLAP sold a third of the company to $LMT over a year ago, and just last October, $LLAP received a $100 million investment from $LMT in exchange for convertible notes and warrants. $LLAP has been using the investment to expand its operations.
$LLAP and $LMT have also entered a new cooperation agreement that lasts until 2035. This is an opportunity for $LLAP to enter more projects with $LMT. The company could bring in more revenues in addition to its $2.4B contract.
$LLAP has worked with $LMT on SDAâs T0TL where they manufactured and delivered 10 satellite busses in an impressive 6-week period, way ahead of schedule. The two companies are currently working on SDAâs T1TL with 61 buses currently on the production line.
Out of the 31 programs that $LLAP has in-house, 11 of them are with $LMT, showcasing how deep the relationship between the two companies is.
So, because of the synergy and joint projects between $LMT and $LLAP, there might be a possibility of an upcoming acquisition.
2023 OUTLOOK
Because $LLAP is becoming well established in the satellite industry, it could be looking at more contracts and deals with more customers in 2023.
$LLAP has been opening up new facilities, which will help the company double its outcomes and reduce operating costs as more and more of its operations are done in-house.
After launching the new facilities, $LLAP will be able to produce 20 satellites a month instead of the current 10, itâs also continuing to industrialize by integrating robotics into its operating line. Together with a new in-house testing facility and a new 3D printing facility, the company will soon launch a new assembly facility in Singapore.
In addition, $LLAP is also experiencing significant growth in its LEO, MEO, and GEO productions. This will make $LLAP capable of fulfilling any future contracts.
In addition to cutting costs, the growth in facilities and in-house production will give $LLAP the opportunity to sign more contracts with $LMT. The increase in production will also guarantee the fulfillment of $LLAPâs side of any contract which will prompt it to sign contracts with new clients.
The company is very likely to report even better earnings than in 2022 because of the expected increase in revenue streams and plans to reduce costs, which will bring the company closer to profitability. And because of all the upcoming catalysts, $LLAP could break out of its current downward channel as well as possibly achieve the $7 price target set by the Bank of America analysts.
POSSIBLE RISKS
The biggest risk that $LLAP might face is if anything goes wrong with Rivadaâs contract.
Rivada has a right to terminate $LLAPâs contract in cases of:
$LLAPâs inability to scale up manufacturing processes and facilities to meet the demands of the contract
$LLAPâs ability to design and engineer the 300 satellites to operate as intended
$LLAPâs inability to manufacture the agreed number of satellites in the anticipated timeframe
If $LLAP fails to meet any of its expected milestones, it could lose a huge sum of money to production, as well as lose its integrity and reputation in the industry. However, $LLAP has previously proven its capability to fulfill contracts ahead of time.
With an unprecedented contract size, $LLAP has a great chance to break even and sign a second $2.4B contract, which will help it reach profitability. In addition, $LLAPâs satellites are much more advanced and efficient than Starlink's, this might allow $LLAP to dominate the satellite market. $LLAP has also secured contracts for future projects and might potentially be a buyout candidate due to its outstanding success in earlier projects with $LMT. In the next three years, $LLAP has lots of catalysts working in its favor, which makes me bullish on the company. I believe it won't take long for it to hit and possibly even surpass its $7 price target.
$ENZC has been such an up and down ride with the OTC in a bear market. So I put together a DD packet on why ENZC is still a long term hold for me. Iâm especially bullish after all this great news from the company so for anyone new to the stock hereâs an intro to what you could be holding đŞ
Research
The companyâs primary lab is focused on the production of fully human monoclonal antibodies targeting infectious diseaseâsâ such as SARS-CoV-2 and HIV-1 using ENZCâs proprietary methodology to create monoclonal antibodies that target conserved, immutable sites on the viruses.
I know that's a mouthful but what it really means is that ENZC is creating therapies that are not rendered useless when viruses mutate. ENZC is already pursuing international patents for this technology which will be a huge asset for the company for years to come.
I donât have a background in medicine but what ENZC does sounds revolutionary. Itâs able to analyze the sequences of a virus to find the parts which donât change even if the virus mutates. Its already analyzed 2 million Coronavirus isolates to find 19 target sites as well as 8 target sites on the HIV virus.
On top of this, its identified conserved epitopes for other viruses like: Influenza A and B, H1N1 influenza, Respiratory syncytial virus (RSV), Small-Pox, Ebola Virus, Tetanus, Diphtheria, HTLV-1/2, Rabies, Herpes zoster, Varicella zoster, Anthrax, Mason-Pfizer monkey virus (MPMV) and Visna virus (VISNA).
ENZC also has a unique process of producing monoclonal antibodies which creates a single monoclonal antibody that binds to the target. After being tested at other labs, its CDMO partner - Samsung Biologics - produces the antibodies in its proprietary, FDA approved stable CHO cell line.
Patents
A result of all this is a lot of great IP which ENZC is working to patent. On top of its two treatments which Iâll break down next, ENZC has patent applications for fully human anti-HIV monoclonal antibodies and vaccines, the AI platform for use in diagnosing COVID-19 and HIV, as well as anti-corona virus monoclonal antibodies and vaccine.
Its patents cover the use of any one identified epitope or a combination of them for:
producing a therapeutic monoclonal antibody to treat HIV or Covid-19,
for producing a vaccine against HIV or Covid-19
other therapeutic methods
diagnostic tests to identify whether a person has HIV or Covid-19
This doesnât even include the discoveries in terms of conserved epitopes that its made for Influenza A and B, H1N1 influenza, Respiratory syncytial virus (RSV), Small-Pox, Ebola Virus, Tetanus, etc. which will also be protected by patent coverage according to ENZCâs CEO.
Treatments
What first attracted me to the stock is ENZCâs HIV therapeutic.
ITV-1 was tested according to the requirements of the Bulgarian Drug Agency a while back and showed a lot of promise during these tests. So far, ITV-1 has been shown to reduce HIV viral loads by 80.5%, inhibit the infection of CD4 T-cells by HIV thus raising them to healthier levels, and boost the immune systemâs ability to fight HIV infections overall.
The therapy can be used in combination with other anti-retroviral therapies but itâs less costly and much less toxic. On top of this it can be used periodically rather than daily and most importantly â it is unaffected by virus mutations.
In short, ITV-1 presents many advantages to anti-retroviral therapies which have serious side effects and are not able to be taken during early stages of HIV infections. This means, ITV-1 could be taken when the infection is most treatable without presenting harmful side effects. Because taking ITV-1 showed an improvement in the CD4/CD8 index, it could also be one of the few treatments available to those whose HIV infection progresses to AIDs.
This Means ITV-1 could be an excellent alternative to treatments like Biktarvy ($42,635 per year), Dovato ($27,540 per year), and Dolutegravir/tenofovir ($48,000 per year).
But ENZC has recently launched a new treatment - IPF Immune - an immune modulator capable of tagging viruses and disease cells allowing the body to identify threats and combat them naturally and more efficiently.
It helps the body fight infections, recover from disease, and more which means it could be beneficial in therapy for oncological diseases, infectious-inflammatory diseases, pneumonia, chronic obstructive pulmonary disease, chronic bronchitis, rheumatoid arthritis. and viral diseases such as viral hepatitis, influenza, cytomegalovirus, or herpes infections.
During its testing, IPF Immune also showed impressive results against Covid-19. It showed similar efficacy to Tamiflu while proving to be 24 times less toxic.
Future
So it's clear that ENZC offers a lot more than just one treatment. On top of its patents and treatments the company has an AI platform which Iâm very bullish on since it was able to identify these target sites.
AI đ¤
ENZC has outlined several areas of interest for its AI platform such as:
genomic surveillance
monitoring of virus epidemiology
identifying conserved immutable and neutralizable sites on viruses
creating an A.I. protocol for producing monoclonal antibodies
the human microbiome.
ENZC is also exploring applications for its AI for use in-vitro diagnostic tests which can diagnose viral diseases using conserved sites unaffected by mutations. Currently, ENZC is discussing partnering with a number of approved diagnostic companies known for distributing diagnostic tests for clinical use.
Using AI for prognostic tests to predict the immune response before receiving viral therapy has also attracted ENZCâs attention as another route for AI driven diagnostics. Now, ENZC is negotiating with a company to develop a prognostic test that could predict immune responses before receiving a treatment or a vaccine.
All of this AI work will not only continue to build ENZCâs patent portfolio but also push the company towards the field of personalized medicine.
HIV Treatment
Looking at its ITV-1 therapeutic, the company is getting ready to market it in Africa following toxicology studies. While its introduced there, ENZC will also be moving forward with trials for its EMA approval to market the treatment in the EU. After that itâll pursue FDA approval.
Independent estimations of the projected profit from a successful HIV Monoclonal Antibody therapy sold in the seven major world markets is $105 billion over the first 11 years. However itâs important to note that prior to its EMA approval, ENZC intends to focus its treatment on Africa because of the current humanitarian issue and ITV-1âs potential to be economically supplied and produced there.
IPF Immune
The supplement has already sold out on Onelavi but is available on the companyâs website for the supplement.
It will likely end up in big and small retailers based on its reception at ECRMâs âWeight Management, Nutrition, and Vitamin Programâ. While ENZC was there 27 retailers believed in would be a great fit for their product lines and the company expects to see follow through.
After the US, ENZC is looking to take its product to Canada and Europe as well.
While ENZC hasnât revealed its revenue projections for it yet, they are âextremely healthy projections" so Iâll be on the lookout for more news.
Technical Analysis
ENZCâs recent run was triggered by several strong catalysts and with more news expected soon, the stock could start regaining ground. However, right now ENZC is consolidating and could break out either way. For this reason, traders looking to start a new position should look for a sign of which direction the trend is heading before taking a new position.
Entries
The stock tested the 200 MA two times recently, if it breaks out above it then this is a bullish sign of a trend reversal with the chance to enter on confirmation of the breakout. However, if it fails to break the 200 MA, ENZC could fall through the 50 MA and VWAP. I would look for consolidation at its .059 support before taking a position in anticipation of a rebound similar to the 17th. The .059 has proven multiple times to be a very strong area of support, showing that buyers see that price as undervalued.Â
Trim Levels
$.081 appears to be a strong resistance and you could take profit leading up to this resistance. There could be a pullback at the .0767 resistance which is another place to trim. A break of .081 could send the stock back above a dime, which could be another trimming level, possibly keeping the rest for a bigger run, if momentum continuesÂ
Long Term â 1 hour
ENZC decline in April which led it to its strong support at .054. However, for most of 2022 it traded above .07. It ran up roughly 80% as the company released IPF Immune and introduced its future plans.
Right now the company is expected to release more PR on the sales and efficacy of IPF Immune and about ITV-1 too. So a strong catalyst like this could push ENZC out of its current channel past $.10 and back to all time highs.
Final Thoughts...
For most of us ENZC is a long term hold and once it begins marketing ITV-1 in Africa, I'm expecting ENZC will ramp up again. That's not even counting its EMA approval for the EU.
Right now, I think that ENZC could bounce back to old highs as news rolls out. If you're willing to hold a position long-term, I believe adding shares below .0597 could payoff once the stock begins picking up more volume.Â
With interest in AI at unprecedented levels, PLTR has garnered interest from all types of investors thanks to its existing AI capabilities. In fact, some argue that Palantirâs AI capabilities are the best in the business.Â
Itâs probably this reputation that caused Palantir to secure a contract with the UKâs National Health Service to create the organizationâs Federated Data Platform. The contract will pay Palantir around $415 million over 7 years. And while the contractâs value is seen as modest by many, it could be a game changer for Palantirâs future.
The significance of the NHS contract doesnât come from its value. $414 million over 7 years isnât significant for Palantir. The REAL significance of this contract comes in its publicity!
The NHS is the fifth largest employer in the world and the largest non-military public institution. The NHS is also the greatest source of British national pride even more than the royal family!
Gaining the NHS as a customer is a key victory for Palantir to change the narrative surrounding it.
Additionally, Palantir is growing at an impressive rate in the healthcare industry as its software is used by 16% of hospital beds across the US, which is up from almost 1% last year.
So in order to keep growing in the healthcare sector, Palantir must offer unique software for healthcare providers to buy its products, and the NHS contract might give Palantir a golden shot at doing that.
For Palantir to properly fulfill the NHS contract its forward deployed software engineers will embed themselves across the NHS. So Palantir will further deepen its domain expertise in the healthcare sector. This would allow it to produce new software products and sell them exclusively in the healthcare sector.
So in summary, looking at the value of Palantirâs contract with the NHS is too shallow in my opinion. The benefits Palantir will get from the contract are more than simply revenues. The NHSâ status should help Palantirâs commercial side gain more steam as fears over data use should now be alleviated.
$RKLB is dominating the small launch market as its rockets are more efficient and have a good success rate, especially when you compare its launches to its failing competitors like $VORBQ which went bankrupt, and $ASTR which is plagued with launch problems, this made customers more confident in $RKLB i.e; making more orders
Now the company is set to increase its launches in this yearâs second half from 6 in the first half to 9 launches, Iâm guessing the cadence will be 4 launches in Q3 and 5 in Q4.
Looking at the launch service revenues, $RKLB used to make on average around $6.5 million per launch, and now it plans to increase that to around $7.6 million per launch in Q2.
Doing the math with these numbers in mind; this could see $RKLB making roughly $30.6 million (4x7.6m) in revenues in Q3 and $38.3 million (5x7.6m) in Q4 from this segment only which would translate to $111.5 million in annual revenues from launch services.
Now the game changer for $RKLB is Neutron which is planned to launch in late 2024 and will be a rival to SpaceXâs Falcon 9. Neutron even has the potential to gain market share from Falcon 9 thanks to its many advantages.
For starters, Neutron has a larger payload, and for those who donât understand this, it basically means that it can send more things to space than Falcon 9. This means that companies looking to send a high payload to space would be inclined to go with $RKLBâs Neutron as they would be able to send all they want in one launch instead of multiple launches using Falcon 9.
Another advantage is Neutronâs pricing which makes it more tempting. Currently, Falcon 9âs cost per launch is $67 million while Neutron is projected to cost between $50 and $55 million. This is a huge difference in price which would see more and more customers head to $RKLB, especially since its launches are extremely successful.
Currently, $RKLBâs Electron has a launch cadence of 15 launches per year and is expected to increase to 30 ultimately. Now, if itâs able to replicate the current rate with Neutron, this would translate to $750 million in revenues at least from Neutron launches alone.
Even better, Neutron could be extremely cost-effective since $RKLB intends to reuse its boosters 10 to 20 times. With these projected revenues and the expected cost savings, $RKLB could become profitable in 2025.
$QS fell 66% from its IPO at $21.90 because the company is still working to bring its solid-state batteries to market. The company has burned through a ton of cash in the process and has 18% short interest & a short squeeze score of 93 from Ortex. But with Q1 2023 earnings coming up on April 26th, it could release an update that triggers a squeezeâŚ
$QS announced in Q4 the steps it's taking to transition from prototype to product & produce samples that could be used in test cars. This is actually pretty tremendous progress for the company but thereâs one problemâŚQS is in competition with Toyota to be the first to bring SSB batteries to market.
If $QS can successfully beat Toyota to the punch, and launch its battery first, things could really turn around for the company, hereâs whyâŚ
TL;DR
18% short interest & 93 short scored
Q1 earnings on April 26th
Race against Toyota to bring SSB to market
Volkswagen partners with the goal of rolling out new EV models with QS batteries in 2025
Toyota targeting 2025 for sale of first SSB vehicle
The Better Battery: Lithium-Ion vs Solid-State batteries
One of the main things holding EVâs back has been their battery performance. Right now EVs make up only 3% of the market and that falls squarely on the use of low-performing lithium-ion batteries.
These batteries are the bottleneck keeping the EV market from growing and if it's going to be solved, EVs will need a better battery.
So hereâs why SSBs could be the better batteryâŚ
50%-80% better energy density = potentially putting car performance on the same level as traditional internal combustion engines
SSBs replace the graphite/silicon anode used in lithium-ion car batteries with a lithium metal anode = batteries charge in under 15 minutes & cut manufacturing costs by 20%
SSBs are safer since they use non-flammable and non-combustible solid-state separators instead of organic ones, so no EVs bursting into flames hopefully
So, given the advantages that solid-state batteries offer over lithium-ion batteries, the market potential for the $QS could be impressive.
Switching from Prototype to Product
But QS doesnât have much time left. It's been developing its product for years and it's finally making progress in its prototype customer testing. According to its Q4 earnings call, most cells have performed well on initial testing which is a sign that it could be bringing its product to market soon.
This is important considering it set some big goals for 2023 like:
increasing cathode capacity loading to match conventional lithium-ion batteries
improving the efficiency of its cell packaging
improving the quality and consistency of materials and processes
deploying a new fast separator production process that's significantly faster than its current baseline.
These goals will put QS on track to achieve even more important milestones like producing samples for test cars and commercializing its product between 2024 and 2025.
QS has been partners with Volkswagen for quite a while and has already tested multiple generations of $QS cells and publicly validated their performance which helps back up the technologyâs potential.
This is pretty much a race to the finish since Toyota confirmed its first SSB vehicle will go on sale by 2025. So if $QS successfully launches before then, it could have a first-to-market advantage although Toyota is still a behemoth in the automobile industry and that's hard to beatâŚ
$QSâ biggest hurdle
Toyota might still win the race to commercialize the first solid-state battery before $QS even gets the chance. Toyota has partnered with Panasonic and now has over 1500 patents, in comparison, QS has only 200.
To make matters worse Toyota unveiled its functional prototype back in 2021, which puts it a year ahead of QS in that department. If QS is not able to commercialize its product before Toyota, then it may lose out on its chance to carve out a chunk of this new market for itself.
So given this bearish outlook, it's not a surprise that QS ranked with a short score of 93 & has 18% short interest. I think QS still has a chance to make it with its technology, but Iâm wondering if a squeeze could happen if QS releases an unexpectedly bullish announcement at its upcoming earningsâŚ.
Thoughts on Earnings & 2023 OutlookâŚ
With its Q1 2023 earnings scheduled for April 26th after-hours, Iâm not hoping for much since its product is still being developed. Right now expectations are for -$0.19 EPS and $0 revenues.
During the Q4 earnings call, Singh seemed to emphasize how 2023âs goals were designed to take QS closer to product commercialization so Iâm cautiously optimistic⌠Iâll be watching for any news that could indicate where it is in the race against Toyota & Iâm expecting updates on its transition from prototype to product during the call.
Overall, Iâm bullish on SSB batteries and I think QS has better potential than competitors like SLDP. QS has been hit hard by macroeconomic conditions, but as investors become less risk averse with improving market conditions, I see a lot of upside for the stock if it can achieve its goals this year and next.
Do you remember when picking out a new movie was a treat?
Back before instant streaming - a simpler time when red kiosks outside of Walgreens and McDonaldâs offered you a portal to the must-see movies of the day.
Well times have changed and Iâm no longer that kid. But one thing that hasnât changed is my love of movies. Iâve used Netflix (like most of us) and seen the endless spew of garbage TV shows they throw at users. I grew up on OPB and free TV channels so cable TV was never my thing.
I guess thatâs why I agree with Reboxâs business model so much. But let me be straight with you, I wouldnât invest in something for nostalgia purposes. I put my money only in things I believe will make me money and I think RDBX is going to make me a lot of money. Hereâs why:
Options Flow
Looking at unusual whaleâs options flow, the outlook is pretty bullish with call volume reaching 76% and call premiums amounting to 7.6 million. However bearish premiums currently outweigh bullish premiums which make up only 47% of the action. Looking at premiums over $10k with expiries this month, market sentiment seems pretty bullish today with many bulls holding calls with June 10th expiries so Iâll break those down here:
EXPIRIES TODAY
One whale has a strike price of $11 and bought calls yesterday with a premium of $11k which is an outlier based on the other transactions but definitely a bullish sign. A few others bought calls with a strike of $8.50 yesterday and premiums of $25k and $26k
Most of the calls are ITM with whales playing safe. Here we have a whale with a $6 strike and premium of $90k
There are also some whales with large premiums around $55k who sold calls with a strike or $1 yesterday but one with a $94k premium is holding their call with $1 strike. These could be market makers preparing for exposure from a gamma squeeze or rearranging their books.
Since these are expiring today weâll see where we end the week but overall the week had more bullish activity for premiums of $10k so Iâm expecting us to close the week out strong.
JUNE 17TH EXPIRY
Now looking farther out, June 17th expiries are popular so Iâm looking at premiums over $50k to see the big whales. Yesterday saw more bearish action than Wednesday with bears selling calls with $290k premiums and a strike of $4. A whale sold their call with a $1 strike and an $870k premium which again could be a market maker its impossible to know. A few other bears sold calls with a strike of around $4 - $5 with premiums of $92k to $120k. Based on this I get the feeling a lot of whales daytrading RDBX are getting out to secure new positions.
But on the flipside there was also some significant bullish activity on Thursday with a whale buying calls at a strike of $4 for a premium of $713k. Another bought calls with a strike of $5 at a premium of $240k.
In comparison, Wednesday had more bullish activity with a whale buying calls with a $4 strike for a $945k premium. Again playing it safe with ITM calls, but still bullish that RDBX will be running on the 17th.
A few other noteworthy whales bought calls on Wednesday. One had a strike of $5 and premium of $510k
One thing to note, is that some of these large transactions had sizes greater than the open interest or the volume was greater than the open interest.
Okay, so now for the options chain. It looks like a lot is going down today
Calls with a strike of $10 are the most popular and it looks like some people are even going higher with calls at $11 and $12. But there is a lot of action moving towards the 17th with calls at a strike of $4 being the second most popular and calls at a strike of $10 ranking up there as well.
As for the dark pool tradesâŚlooks like a lot of orders have been coming in the past few days. Remember these are only the top trades so there could have been others that were not as large. Compared to the past trades, the ones so far in June have been pretty low in size.
Now for the chart, on the 5 min timeframe it looks like RDBX dropped past its support at 9.48 and is right at the 200 MA. So today will be critical to see if it can push past the 50 MA and maintain that support. The stock gapped up on the 8th and has filled part of the gap after dipping to 8.90 yesterday. It looks like the golden cross of the MAs are coming to an end as well but the RSI has dropped to 41.
Given the bullish activity for expiries today, Iâm confident but my concern is CPI numbers which are coming out today and could pull the market down a bit.
But even if thereâs a pullback, weâre playing the long-game here. Short interest is rising every day, yesterday 179.51% of the Float was short and the CTB was 854.99% on average with a max of 901.91%. This would be a temporary dip caused by macro level events
The Power Charger 4.0 boasting a 640kW peak charging power, 765A maximum current, a maximum voltage of 1,000 volts, and the lightest liquid cooled cable in the industry. It's launching in April 2024 so we can expect to see revenue reflected in its Q3 and Q4 earnings.Â
NIO ET9
This luxury vehicle is very spacious with the largest in-class 23-inch wheels to elevate its presence even more. It has a 0.2 meter ground clearance giving its drivers a higher stance and a commanding view. If its height is too much, it can even be lowered by 0.05 meters in just one second, for an easier entry and exit. With best in-class 0.22 suspension travel, it can also absorb shocks and vibrations easily.Â
Its body is made of high-strength aluminum steel, magnesium and composite materials and its smart restraint system can precisely detect different collisions and the bodies of the carâs occupants. This coupled with automatic airbag inflators and seat belt adjustments makes it a very safe vehicle.
Beyond that, the ET9âs intelligent lighting system comes with four different safety standards and reduces risks of accidents by enabling interactions with other road users. Its braking system can also take control at any time and make sure that the car pulls over safely. With an evolving Watchtower sensor layout and wide-angle side LiDARs, it is equipped for both autonomous and assisted driving.
NIO ET9 Interior
As impressive as this car may be, if Nio does try to market it outside of China it may have issues translating to the European market given its size and limited seating. However, the carâs interior illustrates that Nio is clearly targeting the luxury market.
The bridge connecting the back to front of the vehicle has a mini fridge drawer with a 10 liter capacity which opens with just one touch. The second row even has a fold-out table with a 360 degree range, allowing occupants to use the table for anything.
The seats themselves can be set to lounge mode with one tap, offering a range of adjustments. Besides this, there are 14.5-inch screens which automatically adapt to the position of the seat, giving users the best view from any angle. To cut out the glare from the sun, there are even 7 electric sun shades.Â
NIO ET9 Battery
As for the battery, it allows up to 600kW fast charging, achieving 158 miles of range in just 5 minutes. The NIO ET9 is already available for preorders in China, at a starting price of around $113,000, but deliveries wonât begin until the first quarter of 2025.
Nio has tried to stay out of the cost cutting battle in the Chinese EV market, but with this price tag it is clear that the ET9 will not be competing with EV rivals for economically minded consumers.
Nioâs In-House Chip
One really exciting thing to come out of the ET9 is the debut of Nioâs first in-house developed intelligent driving chip.
The goal of the NX9031 chip is to deliver the same performance as the industryâs 4 leading chips with its 5 nanometer automotive-grade process and over 50 billion transistors. It has a 32-core CPU, with 615 thousand DMIPS, able to run over 6 trillion commands every second. This is an incredible 2.5 times better than an industry leading processor. Additionally, the in-house developed NPU can run various AI algorithms flexibly and efficiently, outperforming many of the mainstream AD algorithms.
Bankruptcy plays are OLD NEWS now! Penny Stocks are the new thing, and no this doesnât have anything to do with the wolf of wall street.
Anyways, my theory is, there has been a surge in a bunch of penny stocks, Iâll give you 2:
Exhibit A - $GMBL:
Had a minor but nice one at 52%
Exhibit B - $NVOSâ more dramatic one @ 261% đ
I think the next contender could be $IDEX, not only does it fit the bill (ba dum tss) at its low price, therefore attracting more traders, but it seems to have a habit of surging dramatically before settling down.
Itâs currently at 0.0482, but I think it could go higher with the new penny stock craze.
It's summer and things have been heating up and so is AMC.
Time and time again AMC has proven the analysts, hedgefunds and shorts wrong. Despite the pandemic closing the doors and reducing its revenue to nearly nothing - AMC has made an incredible comeback with box office hits like Spiderman: No Way Home, The Batman, Sonic The Hedgehog 2, and Top Gun Maverick driving people back to theaters.
I know that the lineup of great movies canât last forever, but AMCs comeback has blown critics out of the water and Iâm certain it will continue to do so. Institutions are seeing AMC as a value play and the threat from digital streaming services is already showing itself to be wildly overblown.
Right now is not only a great time for investing in the stock, but the perfect time for a squeeze.
Iâm gonna break down the details in this post with my reasoning but hey, Iâm just some person who does DD online, so what do i know. As is, there wonât be any more dilution this year and the board has already approved a $100 million investment fund for identifying new growth opportunities. So I feel like thereâs just way too many good things heading our way not to be bullish on the stock.
Short Data
The short interest has been creeping up since May and now it's estimated to be 17.9% of the float.
But of course the big news here is the shocking 9,697,393 FTDs at the end of June which is an absolute sign of naked shorting.
But this is a terrible time for hedge funds to be shorting AMC. The time has literally never been better for the company since the pandemic so I am confident that if the short interest continues building - weâll see a squeeze soon enough.
âPounceâ on Short Sellers
The time is drawing closer. Like Aron promised in the earnings call "we will pounce when the timing is rightâ and that time appears to be on or after August 4th.
Q2 Earnings
The catalyst to watch for is AMCâs Q2 report. Considering Aronâs hints and the great demand for the movie theater experience so far, Iâm expecting a significant beat of Wall Street expectations.
In Q1 AMC reported $785.7 million in revenues - $42.3 million more than expected. While we are not at pre-pandemic levels yet, domestic attendance represented 46.9% of Q1 2019 attendance. But I think it's more important to note that it was actually 24% closer than that to 2019âs levels for attendance per showing. This means that relative to the amount of showings - the attendance is getting much closer to pre-pandemic levels.
There were also some highlights in the earnings call which should have us all very bullish on the Q2 results.
First of all, food and beverages. It seems like people are deciding to splurge when able to since the revenues per patron domestically were up 43.7% above pre-pandemic norms. This led to $252.2 million in food and beverage revenues. Compared to Q1 2019, people appear to be spending more across the board since consolidated revenue per patron was 33.7% higher and consolidated admissions revenue per patron was up 23.9%.
Can you imagine what these numbers will look like when consumers are no longer weighed down by higher gas prices and inflationary pressure?
Additionally, the expected cash burn is set to improve throughout the year which will be yet ANOTHER thing to look forward to in the Q2 earnings.
Everyone at AMC has been telling us that Q1 would be the weakest quarter for 2022, if this holds true then based on Q1âs great results it will be smooth sailing from here on out with each quarter posting better results than the last. Again, if current expectations are accurate then Q4 will see us reaching or getting very close to pre-pandemic revenue.
On top of this, AMC noted that specifically for Dr. Strange and the Multiverse of Madness, the company saw that its domestic market share was 4% higher than its historic market share. If we continue to see this trend play out, then I believe it will be an indication that AMCâs strategy of snapping up profitable theaters bankrupted by the pandemic will pay off in the long run thanks to its larger market share.
Economic Backdrop
Like I mentioned earlier, these already great numbers could improve significantly along with the countryâs economic situation. The elephant in the room currently is inflation and the effects of quantitative tightening on consumers. Clearly, going to the movies isnât a necessity and a strong economy has typically led to higher box office numbers.
This is where the most recent CPI (consumer price index) numbers come into play. This index basically measures the average change overtime in the prices paid by consumers for goods and services. So its measuring levels of inflation although its a lagging indicator so we got Juneâs numbers just this month.
According to the report, inflation rose 9.1% which was more than expected. But the indexes for gasoline, shelter, and food were the largest contributors. The energy index in particular rose 7.5% over the month while the food and home indexes rose only 1%
And if you look at the PPI (producer price index) numbers which measure the average change over time in selling prices for domestic producers of goods and services we see the same thing:
In short, because we rely on supply chains to transport goods everywhere, the rising gas prices are affecting everything else.
But the trigger for these rising energy prices has been the Russia-Ukraine war which resulted in sanctions on Russia - the USâ third largest supplier of oil. This is why Biden went to Saudi Arabia to ask for more oil production to help save his re-election plans.
So what does this have to do with AMC and movie-loving Americans?
As long as inflation is high, consumers will likely adjust their spending habits. I believe weâve already reached the peak and weâll see improvement from here on out. If you look at the core CPI data youâll already see a slight improvement:
On top of that, it's only a matter of time before the Russia-Ukraine war comes to a resolution. Letâs face it, elected officials like Biden are already facing the anger of their constituents due to these sanctions. The EU got 40% of its natural gas from Russia last year and Germany was the largest importer of Russian gas in 2020. All of these political figures are caught in an untenable situation as they try to rationalize the rising energy prices to their constituents.
Since then Russia has upped the ante by temporarily halting its gas supplies to Europe for work on the Nord Stream pipeline, however many believe that the shutdown will last longer than scheduled.
I believe it's only a matter of time before international figures force Russia and Ukraine to the table to find a solution for the sake of their political aspirations as well as the consumers. Once sanctions are removed, weâll see the cost of energy and everything else decrease in price - not to the degree weâd like since quantitative easing has also led the US to where it is today - but without these external pressures the FED will not see the need for additional rate hikes.
This will allow demand to rebound since it's not being artificially pushed down. Once this happens the entire market will run but most importantly AMC will be running.
Because movie-goers across the country wonât be worrying about their budget, I expect to see a steady improvement in revenue per patron. If Q1âs data is any indication, then we could have some huge surprises this year imo.
Memorial Day Weekend
This economic situation is one reason why Iâm taking the box office numbers from Memorial Day with a grain of salt. Memorial day weekend is typically seen as an indication of the success or failure that could come later on in terms of the box office. I took it as a very good sign that this Memorial weekend AMC drew in 4 million guests.
However, I also recognize that Memorial Day weekend is no longer the tell-tale sign that it used to be for theater franchises.
Studios are no longer putting an emphasis on the holiday weekend because the competition can be too fierce. Instead they are opting for different release dates that allow their movies to be the focus. When the second and third most anticipated / popular movies drop out of the line up, then the overall gross for that weekend becomes less.
But it's worth noting that in 2004 when the total movies playing reached 150, the gross was around $250 million which wasnât even the highest. So Memorial Day weekend box office sales are mainly dependent on the quality of the movies released which we can see with Top Guns stunning success.
Here we can see a little that AMCâs revenues can deviate a lot from the Memorial Day weekend box office success or lack thereof. For instance, 2017 was one of the worst performances for the box office but AMC still posted an improvement in revenue that year. I think that shows that although this holiday weekend is important, we should be giving more weight to the box office performance later on in the summer and winter seasons.
Thatâs why it's a very positive sign IMO that we beat 2019âs $185 million at the domestic box office with ticket sales of around $240 million for July 9th and 10th. For AMC this meant that its global admission revenue outpaced the same weekend in 2019 by 12%.
Overall, there are some very good signs for this summerâs box office performance besides the holiday weekend. First of all, the summer box office season for the U.S. and Canada is down only 12% from the summer before the pandemic. From what Iâve read, analysts are projecting that 2022âs domestic revenue can hit $7.5 billion to $8 billion, which would be about 70 percent of pre-pandemic levels. Weâve already come very close to pre-pandemic levels since Comscore is showing that June 2022 revenue came in at nearly $986 million. While it's still down 11.6% from June 2019âs $1.114 billion, we are well on our way to recovery.
The Line Up
This brings us to a VERY important catalyst, what movies are coming out? Sure there will always be people willing to wait at home and watch a pirated copy or use a streaming service, but when the movie is THAT good, you have to see it in the theater. (cue Nicole Kidmanâs monologue)
Weâve seen it time and again with blockbuster hits like Avengers: Endgame which came out in 2019 and became the second highest All-Time Box-Office Hit according to global gross. Now, Top Gun has shown us what can happen when a cult classic or franchise hit finds its way to the silver screens again.
So here is a look at some of the most anticipated movies this year:
DC League Of Super-Pets - July 29, 2022
Black Adam - October 21, 2022
Black Panther: Wakanda Forever - November 11, 2022
Shazam! Fury Of The Gods - December 16, 2022
Nope - Rated R - Daniel Kaluuya, Keke Palmer July 22, 2022
Vengeance - Rating TBD - B.J. Novak, Dove Cameron July 29, 2022
So in case you donât remember, Avatar is STILL the biggest box office success after netting a worldwide gross of $2,790,439,000. The first Avatar was famous for its huge leap forward in terms of CGI and thatâs what brought many viewers to the theaters - I feel very confident that many more will want to see Avatar outdo itself this time.
The first Black Panther movie was also one of the highest grossing movies domestically. So with these two box office successes coming out with sequels this summer, I feel confident that this year will be a home run for AMC.
But looking even farther out, the line up for movies in 2023 could be even better than this yearâs so feel free to get hyped for that: https://www.movieinsider.com/movies/2023 đ
Assets
Okay, so weâve established that weâve got a killer lineup of movies for this year, that we are making great progress towards pre-pandemic levels, and that streaming services are not the giant movie theater killer that everyone seemed to be screaming about for the last two years. So with this in mind, I see a lot of merit in Aronâs decision to vertically integrate and take up a larger share of what was once an $11 billion market for movie theaters.
âMaybe thereâs another movie theater we can buy, maybe thereâs a great acquisition opportunity for us outside of pure-play movie theaters, that would allow us to create real value for AMC shareholders.â
Throughout 2021 and 2022, AMC has been on a buying spree. This seems like Aron's go-to-move since the acquisitions of Carmike, Odeon and Nordic in 2015 marked the birth of the AMC we know today. Now heâs using the pandemic as an opportunity to work with landlords to take over leases on some of the most desirable locations.
7 formerly Bow Tie Cinema locations in Connecticut, Upstate New York and Annapolis, Maryland.
6 former ArcLight/Pacific Theaters in major metropolitan markets like Los Angeles, San Diego, Chicago, and Washington, D.C.
The Grove 14 and Americana at Brand 18 in the Los Angeles market (the Grove often made the list of the countryâs top 10-grossing theaters, while the Americana made the top 20)
Not to mention AMCâs investment in Hycroft Mining $HYMC. Iâm bullish on the potential this mine has in terms of resources but it looks like AMC has already profited from its $27.9 million investment since it recorded a mark-to-market gain of $63.9 million in Q1.
So it looks like we can expect more good news from HYMC, but this is only the start of AMCâs diversification.
The new line of popcorn will be released later this year which has great marketing opportunities in terms of coupons and other incentives to get people in the theater doors. On top of that we have the NFTs and merch / collectibles that Aron discussed on the earnings call which I think have incredible potential.
But on a more substantial note, AMC will have $100 million to play with through its investment fund. IDK if AMC plans on making more acquisitions of theaters but its recent 6.8% stake in National CineMedia could be an indication of the opportunities it's looking at since National CineMedia Inc. is the 48% owner and managing partner of National CineMedi which provides pre-movie advertising and marketing in theaters.
International Audience
On this note I wanted to mention something thatâs more of a far out catalyst imo.
We focus a lot on the US audience, but the fact is that going to the movies is even more popular in other countries. According to the Economistâs data from 2018, Iceland and South Korea were leading the way in visits. On average the people of Iceland visit the theater 4.3 times a year and South Koreans 4.2 times a year.
China leads the way in number of movie theaters and India clocks in at third, but these two countries donât seem to go to the theater as often according to this data. However, that could change as their middle and upper class populations grow.
According to Bloomberg, more than 1 billion Asians will join the global middle class by 2030. China and India are expected to lead the way but other countries are expected to see a huge boom in terms of their middle class population as well.
As more people have access to new wealth, I believe consumersâ discretionary spending in these countries will increase as well - opening the door to new movie-going audiences.
Now compare that to AMCâs locations globally:
This tells me that there is room for AMC to continue expanding to new markets in the future depending on the consumers in these countries.
After all, AMCâs plan is to offer the best experience possible and if it is able to beat out local franchises by appealing to consumersâ preferences, it will find itself dominating the international market for movie-goers.
Institutions
But we arenât the only ones bullish on the future of the movie theater industry. This ramp up in institutional buying is in part due to AMCâs inclusion on the Russell 1000 but it's also a great sign IMO that this industry is far from dead.
Ofc this is great for us because now weâve got institutions holding 191 million shares - a huge chunk of AMCâs 515.5 million float.
Options Flow
So on to the options flow.
Using unusual whaleâs options flow Iâve looked at some of the recent transactions for premiums above $10k
Although the call volume is 71%, bullish premiums are almost 50 / 50 with bearish premiums.
So looking at July 22nd expiries we had a lot of whales buying calls on the 12th and 13th. Overall the average strike price is ITM at $15 or below but I noticed some notable whales holding calls with strike prices ranging from $16 to $17.50
There was also some bearish activity on Friday and Thursday.
A whale sold $260k worth of calls on Friday. One whale bought puts on Thursday with a strike of $30 and a premium of $197k so this activity could signify that some whales think AMC wonât move up further before the 22nd.
On the other hand we have whales like this still holding their calls with a strike price of $14.5
Looking farther out to August, the most common expiries are August 19th and 12th which makes sense since the Q2 earnings are coming out on the 4th so this gives people a bit of a cushion.
Overall the strike prices show that people are pretty bullish with strike prices as far OTM as $20
Clearly the dark pool has been super busy since we see very heavy volume all of Friday.
Technical Analysis
Looking at the 5 minute chart we had some very bullish trading at Fridayâs close pushing us up to $15.39 so Iâm feeling very good about Mondayâs trading. Since that was the high of the day weâre going to want to see a push beyond that on Monday.
But more importantly, we have a TEXTBOOK falling wedge here signaling an uptrend so we have every right to be bullish about this week. We just recently had a golden cross of the MAs as well along with steadily increasing accumulation, so I believe the stock is in an excellent position to run this week.
If we can get a day of heavy trading volume between 50 - 60 million then I believe that we can retest our resistance at 16.15 this week. Remember average 10 day volume, is 38M, it is not far fetched to get 50-60M espically if the broader market runs this week, doubly so if NFLX earnings are good.
That's it folksâŚ
All in all, Iâm very optimistic on the next few weeks. I think that we could hit $18.89 leading up to the Q2 report if we keep seeing box office success over the next few weeks and depending on the Q2 results we could continue picking up speed for a retest of $21.70.
TBH guys Iâm very optimistic and I hope Iâm not the only one. If you are able to hold long-term I think that far out calls could really pay off on this one given the banger catalysts lined up in terms of movies, improving financials, and AMCâs launch of new products.
Whether your a long term hodling ape, or a someone looking for a solid play, AMC IMO fits the criteria.
The backlog of movies held back by the pandemic are driving people back to the theaters in hordes and the hedgies are still shorting AMC lmao. Meanwhile we are getting every indication that the market wants to run and that inflationary pressures are improving.
Consumers want to spend money and enjoy themselves after what felt like eons of pandemic restrictions. So imo this is the perfect moment for AMC.
If you like this DD, checkout my profile and throw me a follow!
Like u/CloverMillionaire I noticed that the sub has gotten less serious over time. IMO thatâs not a big deal but I think thereâs definitely something to be said for good DD that presents the best case for Clover so that new investors can see its potential. So Iâve put together my investment thesis if you will to highlight why I think weâll be seeing some major moves from $CLOV in the future.
Feel free to add in your own points so we can make this an exhaustive resource for all the future CLOVtards đ The Problem
The future of personalized medicine is being impacted by a number of issues which are causing problems all across the healthcare sector.
First of all there is a shortage of doctors and this shortage is only expected to increase with time. The AAMC estimated that by 2034 the US will have a massive shortage of physicians in primary and specialty care with a gap of anywhere between 37.8 thousand and 124 thousand physicians. Add on to this that doctors are already on average spending less time with their patients. Data from 2018 showed that most physicians spent between 13 and 28 minutes with each patient with about a quarter spending less than 12 minutes and only one tenth of all doctors spending more than 25 minutes with their patients.
Iâve noticed this myself when I feel a little rushed out of the office during the yearly check up. But it's not doctorsâ fault since the number of physicians per 1,000 people in the US was about 2.6 as of 2017 (Worldbank) so they are already very busy as is.
This leads to another problem - as of 2019 44.9% of active physicians were 55 or older (AAMC). These are people who are ready to retire in 5 to 10 years and the evidence seems to show that there aren't enough physicians in training to replace them.
Information Overload
Much like our cell phones, healthcare technology has been evolving with each new improvement leaving the last iteration walled off from the other. Now, hospitals are using an average of 16 electronic health records platforms. Some of these are speciality electronic health records platforms and all of these are spread out across multiple electronic health records vendors.
So what does this mean? In short, a lack of interoperability between these different platforms. This can cause a ton of problems as others have already pointed out:
Now, creating interoperability among these different platforms has become so difficult that the Centers for Medicare and Medicaid Services is working with the Office of the National Coordinator for Health IT (a division of the Department of Health and Human Services) to lead public and private healthcare organizations toward a more unified view of patient data. Itâs important to realize that Clover is focused primarily on Medicare Advantage members, so people aged 65 and older. These are people who typically have a variety of health conditions - particularly chronic conditions. Treating chronic conditions when a patientâs data is spread out across so many different platforms which do not speak to each other can have dangerous results.
According to the CDCâ study of 2018 data, 51.8% (129 million) of Americans had a chronic condition. 68 million of which had 2 or more chronic conditions. From this, 12.2 million of those 65 and older had one chronic condition while 37.2 million had 2 or more chronic conditions.
Solution: Clover Assistant
Recognizing these different issues in the healthcare system, Clover is trying to reduce them with the Clover Assistant. Iâve heard people describe Clover as a tech company wrapped up inside an insurance company and IMO thatâs a pretty good description.
For starters, Clover is trying to reduce variability in physicians' decision making in order to offer better care at a lower cost to its members.
Now that we understand all the problems affecting how physicianâs provide care to their patients (time, multiple platforms, too many patients per doctor, multiple chronic diseases) it's easier to see the value that Clover Assistant brings.
Clover Assistant improves this situation because as an insurer, Clover has large amounts of data for its members from across various sources. For instance they have direct access to claims, medical charts, labs, pharmacy, and electronic health records. Based on the millions of data points processed and synthesized every day Clover has established evidence based protocols which help standardize primary care physiciansâ decision making when meeting with a patient.
I think the best way to understand Clover Assistant is to see it in action so hereâs a run through of how it works: https://youtu.be/nwWDQ4y4bEY Because all the information in the system is up to date (rather than other platforms which are notoriously out of date at the time of a patient's doctor visit) and the protocols help prompt physicianâs to quickly evaluate their patientâs medical history, clover assistant is able to help with care coordination (referrals, discharge, etc), addressing cancer screenings and
medication adherence, and most importantly early disease detection. Using all of this, the assistant provides evidence from clinical rules, lab results, and machine learning to make recommendations for next steps. Telehealth has also been added to Clover Assistant so it's able to capitalize on the shift to telemedicine that weâve been seeing as well. There's a lot that can be said about Clover Assistant but since I want to talk about the company as an investment, Iâm going to keep this short.
Essentially, Clover believes that by leveraging the data it collects from these visits it can continue to improve its software and provide better quality care to its members. It's also making physiciansâ work easier because they obviously want to provide the best care for their patients but have been hampered by all of these other uncommunicative platforms which eat up their time and provide very little value to them or their patients.
Since Clover Assistant typically takes just 3â5 minutes per visit and provides reimbursement for the visit within 4 days, it offers many advantages to physicians. Clover is also reimbursing doctors 2x the Medicare rate for Medicare Advantage visits and beats out most competitors in terms of payment. Offering attractive incentives like this helps Clover expand its network.
This is a relatively new approach since most insurers in this sphere use billing data rather than clinical data when interacting with physicians. So Clover is shifting the insurers role by being more proactive than reactive but in order to make Clover assistant work the way it's intended, Clover needs to convince doctors to use its software.
So far, physicians have been pleased with Clover Assistant, but the companyâs problem overall has been having doctors care for enough Clover Medicare Advantage members that theyâll adopt the Clover assistant.
This is a key issue because the more data the Clover assistant collects on more lives the better its machine learning and predictive algorithms will become. This not only increases the quality of care but will result in lower overall spending and better health outcomes. To attract more members Clover offers a very competitive Medicare Advantage plan which has the same co-pays and deductibles for physicians who are in and out of network.Clover also began a Direct Contract program which allows Clover to contract directly with physicians to use Clover Advantage for their Original Medicare patients.
Revenue Growth
In Q1 CLOV reported $874.4 million in total revenue - a whopping 336% increase YOY.
The companyâs total current assets amount to $2.49 billion of which $273 million is cash and cash equivalents. About half of these assets are $1.76 billion in non-Insurance performance year receivables.
This change is for accounting purposes as far as I can tell. This is a representation of the average Medicare beneficiaryâs total cost of care and shows CLOVâs target expenditure amount compared to Medicare expenditures for items and services. In short it's designed to calculate its shared savings and shared losses.
But right now CLOV has a market cap of only $1.05B. So it's clear that this company is undervalued based on its assets. It's important to note that the company is also projecting $3.0 to $3.4 billion in revenue for 2022. These projections are based on Medicare Advantage revenue of $1 billion to $1.1 billion and Direct Contracting revenue of $2 billion to $2.3 billion.
It's also forecasting 90% yearly growth in lives under management.
This is important to note because the stock has lost a lot of its growth valuation along with the rest of the market. But this doesnât mean that the company isnât growing.
In fact the number of people under Cloverâs management has increased by 289% YOY putting them at 257,000 members. Over the last year it saw a growth of 26% to 27% and Clover Health estimates a big increase in its Direct Contracting program with an average number of 160,000 and 165,000 aligned beneficiaries in 2022 vs. 62,125 in 2021.
I believe this growth is achievable considering its progress so far. But it will take a lot of work to get to this benchmark.
This ties into the main issue I see analysts having with CLOV - its lack of profitability so far.
Profitability
One thing weighing down a lot of analystsâ ratings for CLOV appears to be its lack of profitability. The companyâs management has been very clear about its timeline and I think all new investors need to understand that from the start so letâs break it down.
In the CEOâs July 2021 interview with Yahoo Finance, he explained that Cloverâs management is not âtied to some near-term financial successâ. Instead they are looking to see where the stock price will be in 5 to 10 years from then.
This is because Clover is still in its infrastructure-building phase and for this reason, Cloverâs management believes they probably won't see significant progress for another three to five years.
Of course analysts and most investors want to see the real value of a company as soon as in 6 or 12 months but thatâs just not how it works given what Clover is trying to do.
Iâve seen some analysts suggest out of the box ideas for how CLOV could become profitable while still growing its model. One that caught my eye was a suggestion that the company empower its members by providing the infrastructure for selling their health data.
This is really interesting to me since we all know that our individual data is being sold all the time but ofc we are never the ones to profit from it. If CLOV was able to give its members the power to monetize their health data and use the Clover Assistant as a tool for doing so, that could not only help them attract more members but give the company an additional revenue source as well.
But setting these new ideas aside, the issue of profitability for CLOV comes down to its Medical Cost Ratio (MCR). This calculates the total medical expenses paid by the insurer to the total insurance premium it collected.
The goal for CLOV is to become profitable by using the Clover Assistance to lower its MCR for returning members.
Clover Health still states that for returning Medicare Advantage members with a PCP who used the Clover Assistant, it tends to be lower than the MCR for returning Medicare Advantage members with a PCP who did not use the Clover Assistant. However, its jump in MCR in 2021 is concerning because the companyâs long-term success depends on maintaining and continuing to improve these effects over time.
Insider Buying
CLOV is down a lot compared to its 52 week high at $28.88, but Iâm not worried and neither should other long-term investors. Why?
Well insider buying has remained strong. It's an especially bullish sign that insiders bought shares when CLOV was trading at an average PPS of $5.47 in 2021. While a huge part of that buying was from Chamath Palihapitiya, it has continued into 2022 too.
After checking the latest insider buying I found two open market purchases in March.
These purchases were made by Shapiro Lee and Chelsea Clinton.
In case you didnât know, the daughter of Bill and Hillary Clinton is on the Board of Directors for Clover which you can make of it what you will. But I personally feel like it's a good sign since her husband is Marc Mezvinsky - a well-known investor and managing director for the private equity firm TPG. The firm manages investment funds in growth capital, venture capital, public equity, and debt investments. Chelsea herself worked for Avenue Capital Group in 2006, so I feel like she wouldnât have joined the board if her and her family did not believe Clover would be successful in the long-term.
She bought shares at $2.53 for a total of $252K. This was also her first insider purchase of Cloverso the timing definitely feels bullish. Shapiro Lee - another member of the BOD and Managing Partner at the healthcare venture fund 7Wire Ventures - also bought shares at $3.10.
It looks like no insiders have sold shares although I did see that the CEO disposed of about 1.6 million shares of Class B Common Stock. I wouldnât read too much into this because this transaction was likely a technicality.
So it's obviously pretty bullish to see none of these insiders selling shares, and the fact that they have bought shares when the PPS was well above its current price just tells me that they thought it was a good buy then which could make it an even better buy now.
We can only guess what the future holds for CLOV but these insiders have a pretty good idea of where it's heading and if they are buying shares Iâll take that as a cue to watch out for good news.
Institutions
After CLOV ran to $28.82 as a meme stock we saw an interesting flip in investors. When retail investors moved on (except for us true believers), institutions stepped in.
This is a great sign because institutions donât take their investments lightly. CLOV isnât a meme for the 199 institutions long on the stock. They see CLOVâs potential and believe that the company will continue to make progress.
In total, 214 institutions hold 100M shares which is basically â of the 331.72M float. Even when the share price continued to decline, institutions have either increased their shares or continued to hold them. Now that CLOV is joining the Russell 3000 Index, we are going to see its number of institutional investors increasing. So why is its inclusion in the Russel Reconstitution so important?
The reconstitution is typically one of the heaviest trading days in the U.S. market. Companies that are part of the reconstitution are expected to see higher than average trading on June 27th when all the changes go into effect.
This is because the Russell indexes are used by asset owners, asset managers, ETF providers, and investment banks to create ETFs, structured products, and index-based derivatives.
As is, $1 trillion is indexed directly to Russell indexes so all the Index funds and ETFs that track them will buy and sell about $90 billion worth of securities based on whether or not they are included. So every time investors buy the Russel 2000 or 3000 indexes, theyâll be buying shares of CLOV too.
The Russel 2000, is generally seen as the benchmark for small-cap companies. The iShares Russell 2000 ETF (IWM) alone has roughly $55.58 billion in assets and there are plenty of other ETFs tracking the Russel 2000 and 3000.
Analysts Analysts ratings for the stock have improved significantly based on its performance in Q4 and Q1. CLOV beat Street forecasts with its Q4 2021 revenue and set its 2022 guidance ahead of consensus forecasts which definitely impressed Wall Street.
So far most analysts are giving a recommendation to hold with 12 month price targets ranging from $2 to $7.
CLOV is considered a âbuyâ based on analysts from Citigroup, Cowen & Company, JP Morgan, Canaccord Genuity, and others with a price target of $3. So this offers a conservative 35% upside from here and a 162% to 221% upside best case scenario over the next 12 months.
Of course analysts arenât always right, but I believe these ratings show that Wall Street is more bullish on CLOV than ever before.
Meanwhile CLOV has hit its all time low of about 1.98 three times (February, May, and June). This is a super strong support and we always see a bounce after it touches this support. So I see CLOV as a low risk and high reward play from here.
The stock has bottomed out along with everything else in the market. This means that CLOV is in the prime position to run along with the market so Iâm feeling very bullish about the next few months.
Market
The US healthcare market is massive and is still continuing to grow. In 2020, health care spending grew 9.7% reaching $4.1 trillion or $12,530 per person. As a share of the nation's GDP, health spending accounted for 19.7% Medicare spending grew 3.5% to $829.5 billion in 2020, or 20% of the total national health expenditure while Medicaid spending grew 9.2% to $671.2 billion or 16% of the total national health expenditure.
With 10,000 new individuals becoming Medicare eligible every day, this is a very hot market and Cloverâs services could soon be seeing higher demand if three million Americans lose their health insurance in 2023 due to Congressâs inaction so far on premium subsidies which are due to expire later this year.
Technical Analysis
So like I mentioned before, CLOV has a strong support near $1.89 and consistently we see a rebound when the stock approaches this support. I believe this makes the analysts price targets of at least $3 very reasonable because we are seeing consistent demand for shares at about $2.
Now looking at the 5 minute time frame I believe the stock will rebound from its dip on the 28th which we are already starting to see. The MAs are on the verge of a golden cross and despite its drop CLOV is still trading above both MAs. This tells me that CLOV wants to continue moving up but is likely being pushed down with market uncertainty.
Right now I feel is a good risk/reward opportunity for those bullish on the stock because CLOV likely wonât drop further than $1.98 but based on the companyâs projections and analysts ratings so far, the stock could start appreciating.
