January 26th, 2022 | 11:17 CET
Novavax, CoinSmart, Netflix - A buy after significant setbacks?
Table of contents:
Novavax - Sometimes, the stock market is not rational
The US biotech company Novavax is a bit of a paradox. The vaccine maker offers an alternative to mRNA and vector vaccines and thus could be interesting for vaccine skeptics. But while just a few months ago, every approval for a new country was greeted with jumps in the share price, the situation is now completely different. In January alone, the Company received approvals for South Africa, South Korea and Australia. The shares have not reacted to this news with any upward movement.
From the Company's point of view, it is in a much better position than it was a year ago when there were not so many approvals and purchase agreements. However, the stock was at USD 331.68 and is now at about USD 77. What is clear is that Omicron is unsettling investors. Is this variant the end of the pandemic? Some countries are now foregoing protective measures, and Biden has failed in court with his mandatory vaccination. As an investor, it is important to remember that the Company has firm orders, sits on about USD 2 billion in cash and has a market cap of just USD 4.5 billion.
The market no longer seems to be acting rationally at the moment. The euphoria of the past year has disappeared, and the stock has lost 50% since the beginning of the year. The question is where a bottom can be formed. The next support is not until USD 61.50, a breakout edge from 2020. Below that, the next support level follows at USD 40.50. However, the market value would be in cash, and there are, after all, other products in the pipeline. On January 24, a distinct hammer was formed, indicating a reversal, provided that the low is no longer undercut on a closing price basis.
CoinSmart - Strong growth and a lot of future imagination
CoinSmart is based in Canada and provides customers with a secure and intuitive trading platform for cryptocurrencies. The Company's philosophy is to put the customer first. To build trust, the Company has complied with the required regulations in each market to obtain the licenses and permits. In addition, customers are offered a 3-step training process because only successful customers are long-term customers. The Company is available 24/7 for its customers in case of any problems, by email, phone or chat. Soon, a chatbot with artificial intelligence will help handle the increasing support requests.
The requests are increasing because customer numbers have grown rapidly since 2018. While there were 26,507 customers on December 31, 2020, there were 158,600 users on October 31, 2021. The Company is now active in 40 markets. Europe has also already been opened up via Estonia. Approvals for some US states and Australia are still pending.
Last December, the Company achieved record sales of CAD 2.15 million. At the same time, it is already operating profitably and is debt-free. Compared to other crypto exchanges such as Netcoins or Voyager, the Company is clearly undervalued. Therefore, the management announced a share buyback program on January 18 for a maximum of 2,764,765 shares out of currently just over 60 million outstanding shares. For the future, CEO Justin Hartzman wants to offer more financial services based on blockchain. The topics involved include credit and debit cards, tokenization of tangible assets, NFTs, and more. Those who want to get a more detailed picture of the Company should register for the International Investment Forum. There, the CEO will present and answer questions live. At the current share price of CAD 0.72, the market capitalization is only CAD 46.5 million.
Netflix - Weak growth prospects
On January 20, Netflix presented its annual figures. Revenue increased by 19% to USD 30 billion, and earnings climbed by 35% to USD 6.2 billion. The Company has 222 million paying customers, of which 8.3 million were newly acquired in the fourth quarter of 2021. Although this reads positively at first glance, it was a reason to part with the stock for many investors - the reason being the weaker growth figures. The Group itself had expected 8.5 million new subscriptions. In addition, some analysts had hoped for more customer traffic after the release of the blockbuster series Squid Games.
The valuations of tech companies are considered too high, especially given the expected interest rate increases. In mid-November, the share was still above UDS 700. Before the figures, the value was trading at USD 508.25. After the announcement, the share fell another 30% from its peak and marked a low at USD 351.46. The Company expects only 2.5 million new users in the coming quarter. Perhaps they intentionally stacked low to then surprise on the upside. The fact is that the Corona Bonus, which brought the Company many new customers, has probably been used up.
In addition, the number of competitors is growing. In Germany, Peacock is a new streaming provider. Nevertheless, Netflix has a clear lead over the competition in terms of content volume. Not for nothing does the company point to the most Emmy winners of any broadcaster and the most Oscar-winning and nominated film studio in its letter to shareholders. Whether the stock has found a bottom yet remains to be seen. First, it has to get through the FED announcement on January 26.
All three groups grew last year, but things are not always rational on the stock market. Novavax is doing much better than a year ago, but the stock is trading 80% lower. CoinSmart offers a regulated crypto trading platform and is growing tremendously fast. Unlike its competitors, the Company is already profitable and has a lot of plans. Netflix was badly punished for its outlook, but the streaming service is still the top dog in the industry.
Conflict of interest
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