Good evening!
Monthly report on the portfolio.
Sold small positions in BSPB, TGK-1 and Lenta (I don’t see the point in holding unpromising companies). HeadHunter, which currently occupies ~3% of the portfolio, received dividends from Sberbank using them. As I wrote earlier, 2 new companies appeared in it - Zynex and Virgin Galactic. Let's save Richard Branson for dessert 😄, let's start with a review of Zynex:
Review of Zynex (ZYXI)
In the portfolio now 10 stocks, bought at $14.5, current share 1.24%. Company capitalization ~$470 million, P/E = 48, PEG = 0.9. Traded on NasdaqCM since 2004, price range – $0.1-25.28 🙈
Zynex Pros:
1⃣ What immediately catches your eye is the increase in price over the past 5 years from $0.16 to $25.28 and the impressive growth in revenue (graphics in attachment) - in 2003 it was ~1 million $, in 2012 it reached $40 million, in 2014 it fell to $11 million, the result for 2019 = +$45 million, for the last 12 months = $68.67 million. And as you know, growth in revenue and profit leads to an increase in share price in the long term.
2⃣ Thomas Sandgaard founded the company in 1996 and is still the largest shareholder. Current share in the company = 43.29%. It's always nice when management owns a large stake; as a rule, such companies show better results. By the way, the CEO’s salary for 2019 with bonuses amounted to 526 thousand. $, which is according to SimplyWallSt is approximately 3 times lower than the market average for a company with such capitalization.
3⃣ The company has no debt. Generally speaking, if we take the latest history of Zynex, it was until mid-2017, then the company paid it off and increased its cash cushion, which now amounts to $54 million ~10% of capitalization.
4⃣ Current earnings per share EPS = $0.3, forecast range for next year: $0.3-0.69 (average $0.5). Analysts' forecasts are a little "fuzzy", there is no consensus, but in recent years the company has exceeded forecasts, perhaps the trend will continue in the future.
5⃣ A little cherry on the cake - On July 30, Chief Financial Officer Daniel Moorhead purchased $49,495 worth of stocks ($18.11 entry price). His salary is ~$700k per year, which generally makes the purchase not so significant (about a month’s salary), but the employees’ faith in the growth of the company’s stocks is positive in any case.
What’s confusing:
1⃣ High odds. It is clear that the entire market is like this and P/E = 50 does not look exorbitant now, but still.
2⃣ Stagnation of profits over the last few quarters + not the best latest report (due to which the stocks are more likely total and have been falling lately).
Total:
An interesting company, I recommend it for your portfolio in a small volume. My portfolio now has 1.42%, approximately I will bring it up to 2-3%. My optimistic forecast until 11.2023 = $30 per share, from the current ~$14 = +110% for 3 years, ~27% per annum in dollars. This is not an investment advice.
Attached graphics:
1) Revenue (2003-2019)
2) Revenue and profit (2014-2020)
3) Earnings per share, 2020 and beyond - forecast values.
Ideas
November 11, 2020