Friday File: Benchmarked Returns, Some Clunker Updates, and Coinbase
by Travis Johnson, Stock Gumshoe | April 16, 2021 6:21 pm
Checking out recently weak MILE, WRAP and INTZ... plus a little buying, some updates on crypto investment valuations, and much more...
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Source URL: https://www.stockgumshoe.com/2021/04/friday-file-annualized-returns-some-clunker-updates-and-coinbase/
Thank you for the excellent writeup and the part about INTZ. My doubts about INTZ stem from their very broad claims about Shield. As a software engineer with nearly 20 years of experience, including in security, some of the claims seem very far fetched. I am an investor at 24 dollars and have taken a bit of a hit on this, but its a speculation for me.
As a security engineer for last 7 yrs Ill add to this point a little. The company is ringing a lot of alarm bells for me. The lack of detail and broad claims would never get the attention of a security or network architect looking to upgrade their firewall. Thats who you sell the product to. The buzzwords that dont really make since or apply to security made the eyes role out of my head and I know for a fact it will do the same to many others. They also dont have any third party testing (gartner etc…) Add that with the heavy weights they are up against like ZS,NET,CSCO,FTNT I see tremendous risk . If I was forced to throw money at a side I would be short. However Travis with your track record I’d never take the other side I just want to pass on the warnings/risk I see being in the field.
Thanks for the vote of confidence, but, to be clear, some of my speculations turn out to be real stinkers. I’m holding to await a fuller response from the company… the lack of one is, in my opinion, a bad sign.
It seems like you are not alone in your doubts. I came across a class action lawsuit against Intrusion (I’m a shareholder as well) for this very reason. Here is the link. https://www.glancylaw.com/cases/intrusion-inc/
…….. whoops I saw someone already mentioned this lower down
In re: INTZ, whether Kimberly-Clark is getting Shield at a huge discount or even free as opposed to paying full price is largely irrelevant as to the efficacy of the product. No company- and certainly not one of the stature of Kimberly-Clark- is going to launch a cyber security product that they don’t have a ton of confidence in.
KMB may well use dozens of cybersecurity products, I don’t know — its good news that Intrusion landed them as a client, but given the lightness of specifics I’m keeping an open mind and a healthy dollop of skepticism.
Luckily I was able to get out from INTZ at $25 booking in a profit of around 15% from my initial purchase price.
A Google sheets file might be a more convenient way to keep a watchlist, instead of having to manually update price. ie,
https://docs.google.com/spreadsheets/d/1EafKlya4yAu6-QxKRS9x5w4G3Zl546h_Gi-PvsImNxw/edit#gid=157757719
Dear Travis,
Fruits for thought:
Can you imagine only if 10 % of US corporations hold Bitcoin as asset reserve. Bitcoin price will stay high for a long time( supply and demand ). Why I say that? Cash is steady but de-appreciated in value over time, Bitcoin is very volatile but appreciated in value over time. 10% will not hurt the companies’ bottom line, will it?
I only hold cryto related securities.
You’re more adventurous than I am. I can imagine that, but I can also imagine a 90% drop in value for Bitcoin.
Can you imagine a situation where governments and central banks will give up control of money?
I have VYGVF and BRPHF etc and etc.
I forgot to mention one more thing:
BBKCF rises and falls, yet through it all , this much remains $3.20.
It held its price steadily better than V & B this wild week!
Hi Travis, Thank you for the highly informative update as usual. What are your thoughts on the battery storage tech from STEM Inc (#STPK). They seem to have gathered some fan-following among the investing newsletters recently, including Motley fool and Banyan Hill.
Haven’t ever looked at that one, but I’ll throw it on the pile — thanks.
Hi Sandmain,
I used to have 48,425 warrants of STPK, average cost $3.56, it went all the way to $30+, I unloaded most of them between $25- $29, but I still have 20,000 warrants here in my hands. I bought too many because the ” Green” things and the timing was very hot for SPACs at that time. Is it a good stock? I do not know for sure, this famous short seller, Mr. Andrew Left of Citron Research, said it would be at least $100 stock. For some reasons, it dropped quite a bit because too damn many JUNKS SPACS on the market right now and in the meantime SEC badmouths the SPACS, the climate is cooling down a lot but still a good place for me to invest.
BTW, I used all the gain to buy or add to 3 stocks: BBKCF, IVPAF and PLBY that imo is the best stock for NFT play.( From Marilyn Monroe to James Bond girls, everybody in America love gorgeous babes)!
Travis told me I am one adventurous dude, I think I am. We have a different perspective in life. For me, I always seize that one moment in time, make it shine.
Travis, I saw you mention you loaned shares, so I looked up how I could do it . . . and found out I already have! Someone borrowed MILE shares from me . . . so I guess I encouraged the shorts . . Haha.
My MJ shares have been borrowed from the time I bought them last Aug, so someone got a good squeezing when the stock more than doubled 🙂
I hope you got paid! Lending shares is a money tree for brokers (if you buy on margin, they can lend out your shares), but Interactive Brokers is the only broker I’ve used who actually splits the income with the shareholder. Hopefully others are doing so as well.
Yes, I got paid. Doesn’t amount to much so I didn’t notice it before. I’m with IB.
PLTR
I agree with the Quantumscape skeptics. I have taken a keen interest in the technology to improve battery life ever since I was told the Li-on battery connected to my PV array would last 5 years (maybe 10). If it only last 5 years it wont have paid for itself in electricity bill reduction. The ranking customers who are putting their money behind the research like Toyota and Samsung seem to be backing the improved wet battery components approach of Novonix, or the upscaling of solid electrolyte cells of Ilika. They are not either/or. Both could work. Moreover both have proved their technology which Quantumscape does not appear to have done.
Hello Travis,
Whenever I click on the link to any article of yours from the newsletter in Gmail and then login, I’m taken to the homepage and have to find the article once again. It would be great if, after the login, I still remain in the article and am not redirected.
Oops, that’s not supposed to happen — thanks for letting us know.
I have been seeing the behavior since some time now, but thought it might be by design. Logging in automatically from email click was disabled as a part of security 🙂
I simply do not get the Boston Omaha concept. What is it if not a simple portfolio? They do not seem to have the capital to meaningfully invest in any given company. Buffett buys a gazillion of shares, then gets his man on the Board, then starts influencing the business; his implied power is always there like an “Icahn Lite”. Cathie Wood of Ark develops actively managed funds with the promise of creative disruptors. What is the promise of Boston Omaha?
Mostly, trying to build scale in non-sexy businesses at a low price — billboards, surety insurance, and now rural broadband… with opportunistic investments along the way, so far in banking (car loans funded by CDs) and real estate (DFH and others). They have started investing in publicly traded stocks recently, but that’s new and they haven’t talked about it much.
Sorry, if I missed it, Travis, but have you added anything to you Lockbox since SDHR and GSHD? Thanks!
This is probably common after a short report, but thought I’d share.
(I’m not even in the stock but have them on a watchlist that I get news for).
Kaskela Law LLC Announces Shareholder Class Action Lawsuit Against Intrusion Inc. (INTZ) and Encourages Investors with Losses in Excess of $100,000 to Contact the Firm
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$INTZ INTZ CLASS ACTION NOTICE: Glancy Prongay & Murray LLP Files Securities Fraud Lawsuit Against Intrusion Inc.
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$INTZ INTRUSTION ALERT: Bragar Eagel & Squire, P.C. is Investigating Intrusion, Inc. on Behalf of Intrusion Stockholders and Encourages Investors to Contact the Firm
Yes, those always show up after a short attack… and usually after any bit of news that drives a stock price down.
Thank you for the Friday file Travis, much appreciated!
I have a question, where do you get your news from? I ask because I tried to find news on WRAP and INTZ but couldn’t find anything as detailed as what you write about. Are you using a paid news subscriptions or which sources would be best? Thank you!
Good morning, I am still pretty new to the stock market and learning every day and have made some very good choices. I am curious on the XRP that I heard about the other day from a friend. Do you have any information or advice on this ? My gut told me not to buy crypto currency when it started and I still feel it is borderline evil owned … not sure if this feels right or not. Soooooo moving forward … is this XRP a good potential to start on to build some extra cash …. any insights are very welcome … remember this is something new for me so please be kind with your words lol Thank you … Bless you!
I own some bitcoin and ethereum and have dabbled in other little tokens, but never Ripple (XRP). The only time I looked at that one in any detail was a couple years ago when someone was touting it as “USA Coin” (https://www.stockgumshoe.com/reviews/manward-letter/will-trump-publicly-back-usacoin-to-become-new-no-1-crypto/)
Hi Travis
I would appreciate it if you can give your feedback on Nano Dimension Ltd $NNDM if/when you have the chance.
I am not an expert on the technology, but I’m skeptical that they will make commercial progress anywhere close to their timeline over the next year or two — there seems to be real potential, but it’s still really a small niche product for R&D and going from that to any kind of commercial product is extremely hard in the chip space, where costs are huge and mass production is always going to be vastly more efficient.
That may be a failure of imagination on my part. If you like the R&D and are willing to wait five or ten years to find out whether it’s a great first-mover breakthrough company or a failed technology, then they are at least well-capitalized now to get through a few years (they have something like a billion in cash now, after raising money a bunch of times as the stock soared — which might be a telling counterpoint to the optimism, I expect management knows they need a lot of capital and time to move this technology forward). I thought the acquisition announced this week looked pretty silly on the surface, a company with this specific additive technology to replace printed circuit boards should be really focusing on commercializing that technology and not drifting into other areas.
That’s all I know about them at this point. I’d call this an extreme speculation — there’s room for those in most portfolios, but there’s also very high risk in counting on them or becoming too much of a “true believer” in these kinds of stories and betting more than you had intended to risk because you get wrapped up in the excitement.
Thanks Travis. What companies look attractive in this space with room to grow in your view?
I have yet to see a 3D printing stock that I like.
upcoming IPO’s – how about these two companies Velo3D or MKFG?
There was an article in Barrons about a model put together by a group of economists that sought to determine what stocks were more akin to gambling then investing, they presented a list of ten stocks that their model identified, NNDM was on the list. I see their product more as an R&D / marketing instrument rather than anything that has to do with production. A great tool for any electronics manufacturer or university with a electrical engineering department, a lab instrument. Your customer sends you a cad drawing of a part and the next day they receive a working prototype. I held shares at one time and sold them when it was obvious that the price had outpaced reality. I have not stepped back in.
Trade Note:
Tiptree (TIPT) got above $11 for the first time since I’ve owned the stock, inspired by the revised S-1 for Fortegra that came out on Tuesday — it’s all still preliminary until we know how the IPO of that specialty insurance subsidiary goes (assuming it does) and what that means for the value of Tiptree’s majority stake in Fortegra, but it was mildly encouraging to see the first guess at an offering price ($17 per Fortegra share) and the estimate that they’ll be raising not $100 million, which was the placeholder number they used in the first S-1, but $162 million. Again, not necessarily a huge deal, these numbers might well change… but it makes it seem more real, and is mildly positive while we wait to see if and when this actual IPO happens.
And in conjunction with that increased detail in the draft prospectus, they also provided draft Q1 numbers… so we now know that gross written premiums grew 29% in the first quarter, earned premiums grew 21%, the combined ratio fell further (which is good) to 91.5%, and adjusted net income grew 46%, with the adjusted return on equity going from 12.7% a year ago to 17.9% this quarter. So it seems this is a good time to bring Fortegra back to the public markets, but it’s still a tiny company and much will depend on how investors feel about a quiet little specialty insurance IPO when it happens. No word on when the IPO might happen, and no specific news from Tiptree, but things are rolling the right way for the moment, and Tiptree is now trading above book value for the first time since I bought shares a year and a half ago. You can never know the perfect time to buy or sell, but buying a decent business at half of book value is a good place to start… and having it double to trade at a meaningful premium to book value is probably a signal to take a little profit.
I don’t know how the Fortegra IPO will go, or whether it will be great for Tiptree or just good, but even dominant extended warranty/specialty insurance companies often trade at only 1.5X book value or so, like Assurant (AIZ), so we should be cautious about expecting anything truly dramatic. Maybe Fortegra becomes the next Assurant, and book value is really the floor for the shares going forward, maybe not… and maybe it becomes the next RLI and builds to a giant premium over time, but probably not.
The original reason to buy was that it was a decent company trading at a stiff discount to book value, with a reasonably attractive and experienced capital allocator at the helm, and that we were paid a rising dividend while we waited for the discount to close (as I thought it eventually would, given the decent and growing underlying businesses). The business is better now, the dividend is still solid but has not been raised in a year or so… but the discount is gone, too. I sold a bit more than half of my position today at $13.08, taking out my original cost basis plus a little profit, and will wait a bit to see how the Fortegra IPO goes before I decide what to do with the balance. This is still an extremely small company, and the range of possible outcomes is very wide from here — they could build the next great specialty insurer, they could blow it all on a bad investment in their very concentrated investment portfolio, and this is not a position where I have complete confidence in the strategy or the company’s management… I bought mostly because it was way too cheap, so logic tells me I should sell some because it’s no longer way too cheap. The details will show up in the next update to the Real Money Portfolio on Friday.
I am glad we are thinking alike. I also sold 1/2 of my shares. I did this before
reading your article. Thanks for watching for us.
In the same week that Travis wrote about the positive outlook for UBER on this thread, I came across two news feed articles– from Investopedia and Barron’s — regarding the dominant ride-hailing company halfway around the globe. Both articles discussed Singapore-based company GRAB, a household name in 8 countries in Southeast Asia. It’s mobile “super app” corners over 70% of the ride-hailing market in the region, a 50% share in food and grocery deliveries, plus around 23% share of digital wallet payment processing.
I am not sure if UBER ran into Regulatory problems or if it just could not penetrate the dominance of GRAB in that part of the world. Either way, UBER sold its business in the region but now owns over 27% of the Asian company plus a seat on the board for its CEO.
Dubbed as “the largest SPAC merger ever” at $39.6 billion, GRAB is expected to be listed in the Nasdaq sometime in July of this year through a merger with holding company Altimeter Growth (ticker AGC).
Unfortunately (for me), I read about this exciting merger-to-come and opened a small position in SPAC company AGC without realizing that US investor interest in SPACs had already begun to dwindle at about the same time.
While unhappy with the lack of momentum and volatility of AGC right now, I also think it would be a shame to abandon this unicorn deal, plus the chance at a backdoor investment in UBER in one of the most populous (and young!) areas in this world.
What would you advise in a situation like this?
GRAB is a phenomenal growth story, some similarity to SE — I haven’t looked at the valuation or numbers very closely yet.
I take this as a vote of confidence for now, purposely leaving out the numbers the newsfeeds were throwing around as I await the Thinkolator’s valuation. Gut feel – which can be totally wrong – says this’ll go into my own version of a “coffee can” portfolio.
INTZ class action today…
There’s been a new PR for an attempted class action suit at least once a day since the short report. Doesn’t really mean anything, lawyers have a prepackaged plan for trying to gather a class whenever a stock goes down or a short report gets some attention but the actual class rarely gets certified and the cases rarely move forward.
Not to say that INTZ is in the clear, just that the “we’re gathering a class action” press releases are like chum thrown on the water — they’re bait for angry investors, not news of a different legal complaint coming.
Hi Travis, INTZ is down a lot, can we add to average it
You can do whatever you like, of course.
I have not changed my position — nothing really new in the earnings report, but I’m chewing on that and will have more to say on Friday (or before, if I buy or sell tomorrow).