January 18th, 2021 | 12:53 CET
Riot Blockchain, Upco International, Microsoft - Game changer Blockchain - more than just Bitcoin!
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"[...] Most of all we were on a mission to MAKE CRYPTOCURRENCY ACCESSIBLE [...]" Justin Hartzman, CEO, CoinSmart Financial Inc.
The native Rhineland-Palatinate has been a passionate market participant for more than 25 years. After studying business administration in Mannheim, he worked as a journalist, in equity sales and many years in equity research.
RIOT BLOCKCHAIN INC - Potential vs. Valuation
Riot Blockchain is focused on mining bitcoin. Based in the US state of Colorado, the Company holds minority investments in the blockchain space.
Riot is one of the largest publicly traded bitcoin miners operating and based in the US. It is gradually expanding its capacity and also implementing various measures to increase efficiency. As a miner of Bitcoins, the Company benefits directly from their appreciation in value. Riot's share price has multiplied in recent weeks in the wake of the bull market in cryptocurrencies. While the share price was still less than USD 4 in November, it reached USD 18 by the end of the year and then recently climbed to USD 30. At the current price level of around USD 25, the Company is valued at USD 1.7 billion.
In our opinion, the share price currently contains too many premature praises and the probability of a continuing price correction is high. Investors should keep in mind that Riot has not been profitable so far. Analysts expect a fivefold increase in sales to USD 50 million in the current year. But below the line, only USD 0.02 per share should remain as profit. The value of the minority interests also does not provide a justified explanation for a company valuation of well over USD 1 billion at this point. Nevertheless, Riot is a long-term beneficiary of rising Bitcoin prices and its holdings' operational progress. After a price correction, the stock is worth a look again.
UPCO INTERNATIONAL INC - blockchain revaluation underway?
The share price of Upco International increased significantly in recent weeks. In our opinion, the increase does not stem from developments in the core telecommunications business but is based on the potential of other "digital services." Specifically, this involves a proprietary blockchain-based solution for payment services.
Upco is a licensed global telecom carrier in the international VoIP (Voice over IP) wholesale business and operates primarily in niche markets. However, the fantasy for the stock, with the potential to revalue the Company, is UpcoPay. UpcoPay is an innovative, secure, and convenient direct payment solution between individuals and merchants. UpcoPay is expected to complement an e-wallet before the end of the year, including to top-up balances or enable payments via the app.
At the beginning of December, the stock was trading at just CAD 0.04, rising to CAD 0.17 in January. At the current CAD 0.14, the Company is still very moderately valued at just under CAD 13 million. Upco can convert existing telecom customers to "pay" and also attract other customer groups. According to the Company's statement, an important milestone is a proof-of-concept, which will initially be provided in Europe this year. If this is successful, the share will still have a long way to go before reaching its highs.
MICROSOFT CORPORATION - Basic Investment
The tech giant now has a market capitalization of USD 1.6 trillion. For the current year, analysts expect consolidated sales of USD 158 billion. That values the Company at about 10 times projected revenue, with a 2021 P/E of 32 and a 2022 P/E of 29.
Microsoft generates nearly half of its revenue from its Windows operating system and application development tools for servers. The fast-growing cloud computing segment accounts for about a quarter of revenues. The Company also offers a wide range of blockchain/smart contract solutions. After Amazon, Microsoft is the largest cloud provider in the world.
With the Microsoft share, investors participate in the growth of a broadly positioned, established, and profitable software Company that reflects all relevant trends. The stock is, therefore, a fundamental investment. The Company will present its Q2 figures on January 26.
Conflict of interest
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