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Showing posts from June, 2021

Jam City: Cheap, Ignored, Yet Unproven

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  Jam City agreed to a business combination with the DPCM Capital SPAC. The mobile game developer is combining with Ludia to build a business targeting 2022 bookings at $868 million. The deal only has an enterprise value of $1.2 billion, placing the SPAC combination far below the multiples of established public stocks. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » After a period of SPAC stocks overheating, the sector is now ripe with cheap deals in the works. One such deal is the business combination of  DPCM Capital  ( XPOA ) and Jam City  announced  back on May 20. The mobile game developer is in ultimate growth mode, yet the market has mostly ignored the deal with the SPAC now trading below $10 providing a cheap entry point for new investors. Update - July 23 Guessing the struggles with the $ MYPS  SPAC has $ XPOA  deciding to take a different path with the stock trading below $10.  -DPCM Capital (NYSE:XPOA) a

Topps: Be Careful Here

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  Topps reported Q1 sales that surged 55% to $166.6 million. The sports card market has seen a huge correction since the SPAC deal was announced in April. The stock isn't exactly expensive with a market cap of $1.3 billion, but the company faces a tough road over the next year as card demand slumps. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » Since Topps agreed to a deal with SPAC  Mudrick Capital Acquisition Corp. II  ( MUDS ), the market has turned negative on their primary market and this vehicle for going public. Both SPACs and sports trading cards have cooled off in the last couple of months altering the near-term attractiveness of the stock. My long-term  investment thesis  remains bullish on Topps as a company, but the sports card market weakness is likely to push this stock lower heading into the merger close. Read the full article on Seeking Alpha.  Disclosure: No position mention

InterCure: True International Cannabis Play

InterCure offers a pure play on the European cannabis market with a focus on Israel. The company went public via a SPAC in April and now trades below the PIPE price at only $8. The stock is cheap at only 2x EV/'22 sales targets. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » The cannabis market is ripe with investment opportunities whether in the U.S. or Canada, but very few good investments exist for companies focused outside of North America. After closing a SPAC deal, InterCure  ( OTCPK:IRCLF )  offers an impressive opportunity to invest in European growth via a small Israeli company. The stock is a solid buy considering the company doesn't come with an expensive price tag like most Canadian cannabis companies playing in European cannabis markets. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.    Update - July 25 The Israe

Sprout Social: Limited Upside For Now

  Sprout Social offers a software solution for participating in the growth of enterprises leaning into social media. The company has recently ramped up revenue growth rates above 30%, but growth is likely to normalize back towards the mid-20% rate before COVID-19. The stock trades at an insane 23x forward revenue estimates as the P/S multiple expansion has fueled a lot of the recent stock gains. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » As the social media landscape becomes increasingly complex for businesses to manage,  Sprout Social  ( SPT ) provides companies with easy to use management software tools for marketing, sales and support. The company offers an attractive recurring SaaS subscription model, but the stock is priced for near perfection after the rally to nearly $80. My investment thesis is bearish on the stock until a more reasonable entry point exists. Read the full article on S

TerrAscend: Continue Avoiding This MSO

  TerrAscend reported strong Q1 results with very impressive adjusted EBITDA margins of 42%. The company is highly focused on branded wholesale products leading to strong margins. The stock trades at an expensive 12x '21 sales targets due to the contingent equity stake of Canopy Growth. Looking for a portfolio of ideas like this one? Members of Out Fox The Street get exclusive access to our model portfolio.  Learn More » Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Ayr Wellness: Doing Very Well

  Ayr Wellness forecast revenues soaring over 54% sequentially to $90 million. The small MSO will quickly rival the size of global cannabis stocks with market valuations in excess of $10 billion. The stock trades at only 7x EV/2022 EBITDA target of $300 million. This idea was discussed in more depth with members of my private investing community, Out Fox The Street.  Learn More » The cannabis space has taken a pause since a big rally that peaked in February based on the election of Joe Biden in the U.S Presidential election. With or without the Democrats now in charge pushing for federal legalization of cannabis,  Ayr Wellness  ( OTCQX:AYRWF ) continues to benefit by a slow approval process leaving most firms stuck on the sidelines. My  investment thesis  remains very bullish on the stock trading around $30 and valued at about half the EBITDA multiples of the sector. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more

Nikola: Making Progress, But Lacks Capital

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  Nikola has started making real progress towards becoming a legitimate BEV manufacturer. The company forecast delivering up to 100 units by year end after starting trial production this month. The company needs more capital and normal production delays are likely to disappoint shareholders. Investors should wait for a dip to buy the stock as a 9x EV/S target for 2025 is still expensive for the risk. Looking for more investing ideas like this one? Get them exclusively at Out Fox The Street.  Learn More » As someone ultra bearish on  Nikola  ( NKLA ) after the company went public via a SPAC to an irrational valuation, my view is now more neutral on the stock. The BEV company has made substantial progress towards becoming a legitimate manufacturer of trucks. Ultimately though, my  investment thesis  is neutral on the stock as the current price is still over 9x 2025 sales targets. Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please read the disclaimer page