25. February 2021 | 11:43 CET
BIGG Digital Assets, Palantir, Baidu: Crypto and Big Data - invest in the future!
The crypto world is evolving rapidly and with volatility. The latest continuous firing is now coming from big companies like Tesla, who are using the run on cryptocurrencies as a marketing tool to serve their own purposes. Elon Musk must now be called the "Magician of the Markets." He is the dazzling entrepreneur who throws entire industries into turmoil. His flagship Tesla is now investing proprietary money in Bitcoin, and at the same time, buying a Tesla vehicle using Bitcoin is possible. The perfect ring closure in a market that just can't seem to settle down. We take a look at companies that are making good progress with the crypto world and the topic of Big Data so far.
time to read: 4 minutes by André Will-Laudien
Born in Munich, he first studied economics and graduated in business administration at the Ludwig-Maximilians-University in 1995. As he was involved with the stock market at a very early stage, he now has more than 30 years of experience in the capital markets.
BIGG Digital Assets - Strong customer and revenue growth
Canadian security and IT firm BIGG Digital Assets is currently making a splash. On the one hand, the business in the area of software licenses for forensic investigations by public institutions is doing exceptionally well. On the other hand, the Company operates Netcoins, a licensed platform for online crypto trading in Canada. Two ingenious pillars!
As if that were not enough, the Company is also heavily involved in its crypto trading. The upward trend of bitcoin has been underpinned by increased proprietary trades, thus building up a stock of over 300 BTC in recent months. The Company's treasury is particularly pleased about the current daily growth in the trading portfolio. Of course, this commitment also entails risks should the mood turn. But one should assume that the experts have an accurate trend analysis.
At the beginning of the week, there was news about the subsidiary Netcoins. Here, the daily turnover of USD 100,000 has been exceeded in the meantime. The Netcoins business model is solely dependent on trading, and the income is fixed commission rates charged on every trade. Thus, the earnings potential is not measured by the cryptocurrency or its valuation itself but by the trading transactions' turnover rate. This turnover rate is continuously increasing as the platform becomes known and the number of customers increases. Highly volatile days are usually bad for exchange trades. Still, for Bitcoin and crypto assets, they cause even higher trading volumes and induce higher revenues, even if the assets are trending downwards. Netcoins sits in the middle of these trading flows!
As its popularity increases, the number of customers also increases dramatically. Verified customer onboarding has quadrupled since December, volumes per customer are increasing as well, and the platform is continually evolving. BIGG's stock has tripled year to date in February 2021, and in the US, there has been an upgrade to the next higher trading segment, OTCQX. BIGG is likely to be one of the stock market shooting stars in 2021 - The Trend is your Friend!
Palantir Technologies Inc - Consolidation at a high level
Another shooting star since the Initial Public Offering is Palantir Technologies. The Company provides customer analytics and evaluates big data, not only for private use but also in cooperation with government agencies. Because of its business model, not everyone is a friend of the Company; nevertheless, Palantir is sailing on the Big Data success wave.
It recently announced a major new collaboration with 3M. Accordingly, 3M will significantly expand its use of Palantir Foundry software. 3M will use Foundry to help build a dynamic supply chain that can quickly adapt to demand changes. It is hoped that using Palantir software, it will respond better and more directly to changes in demand related to the pandemic.
Despite the positive news, there is still no quick all-clear from a chart perspective. There is much to suggest that the share will continue to consolidate below the USD 30 mark. In this context, the broad corridor between USD 20 and USD 30 offers plenty of scope for adjusting the price structure. The profits of the initial subscribers at USD 8.5 will thus be successively processed in the market, and at some point, the price may continue to rise. In parallel, the business is growing at 40% annual growth rate. Palantir continues to be a good tech mover!
Baidu Inc ADR - Good 2020 figures and further growth
Baidu's 2020 annual results show a clear trend of change in revenue structure. With a continued shift of revenue to the non-search engine business, other ideas are now coming to the fore. Baidu's business is currently divided into two segments, consisting of Baidu Core and iQIYI. Baidu Core mainly provides online marketing services and new AI initiatives. iQIYI is an online entertainment service provider and offers original, professionally produced and partner-generated content on its platform.
Baidu reported a solid fourth quarter, with revenue up 5% after several flat quarters. There were increases in operating income and EBITDA of 7% and 24% on the operating side, respectively; admittedly, EBIT still accommodates quite a bit of depreciation and amortization due to permanently vigorous investment activity. Another bright spot is that Baidu Core's non-advertising revenue grew 52% year-on-year in the fourth quarter.
Baidu is China's tech giant and currently spends 23% of its revenue on research and development. We expect these investments should pay off in the foreseeable future. Without further expanding the existing multiple, Baidu's business mix shift could lead to a further upside of about 10-20% if the new businesses could gain significantly more revenue share in 2021.
This assumption is quite conclusive from current business performance, and the share could end up at around 40% as of 2021. Baidu shares consolidated very strongly in the last 5 days, falling from EUR 290 to EUR 238. If the tech rally continues, Baidu remains an Asian top pick.