This stock is hugely undervalued right
now and in a position to seriously take
advantage of the current market dip.
Welcome back to the channel today I want
to be talking about nano dimension (#nndm)
as you know I like to find stocks that
are either undervalued or have catalysts
that could push the stock price way up.
First off I want to say congratulations
to anyone who listened about Petrotec Energy ($PQEFF)
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NNDM ($NNDM) is one of my favorite stocks and
the valuation of this company is way off.
In this video I will be discussing
exactly why it is off and where I feel
management can make huge advantages in
the current market I will also discuss a
few misconceptions about nndm and the
very latest news.
So let's get into it.
If you are new to Nano-Dimension nndm stock check
out my other videos where I explain all
about the company. NNDM (#nndm) ($NNDM)
Nano-dimension is essentially an AME 3d
printing company that produces
multi-layer circuit boards antennas
sensors amongst other things.
They provide nano technology based
conductive dielectric inks
switch software to manage the design
file and printing process and the
company's main
and the company's main hardware product
is the dragonfly
nano dimension is substantially
mispriced based on negative Ark Sentiment
(#nano-dimension) ($nndm)
For anyone who doesn't follow Cathie Wood
or Ark Invest, basically #ArkInvest ETFs
took a bashing throughout 2021 and
so far into 2022 with some stocks being
in these etfs being down as much as
eighty percent
following Cathie Wood (#cathiewood) investments made a
lot of investors very wealthy up until
2021 a lot of money has been lost over
the past nine or ten months
so this change in sentiment towards Ark
has provided an opportunity as this
stock in particular presents a deep
value play based on substantial
mispricing
you are essentially buying a dollar for
less than a dollar with an upside of
around 40 percent even if we assume no
growth.
The ceo has also recently bought more
shares
which may signal an opportunistic entry
point
and I will talk a bit more about this in
a moment
the current financials of the company
more specifically the cash on hand
the balance sheet and the current ev all
point to a case of substantial
mispricing
that the markets seem to have ignored
which may reward early investors in this
narrative
so this is the latest financial
statements of nanodemension you will see
here that they have
over 1.5 billion total assets and only
28 million in total liabilities giving
the company total equity of 1.495
billion dollars the market cap of nndm
stock
dropped below 900 million today before
finishing strong
so going back to what I said a moment
ago
you are essentially buying a dollar for
less than a dollar
with an upside of around 40 percent
if you could buy all the shares of nndm
at the current price you were
effectively
buying
1.495 billion at a price of only 900
million
and this is where the upside of 40 at a
minimum
rings true.
In the case of companies like this
there has to be a reason for this to be
priced so low and usually in this
scenario there is a huge cash burn
but that does not exist here
in the previous quarter nano dimension #nano
posted a loss of 18.2 million and while
that might seem like a lot of money nano
dementia could afford to make losses
like these every quarter for the next 20
years before they would ever burn
through the shareholder equity and if we
look at what they are spending their
money on I feel even more optimistic
about the future
the single largest expense is on
research and development not on
excessive director salaries
or something else that doesn't add value
although we will have to wait until the
annual report is released to see the
exact breakdown of these expenses so one
of the reasons for this valuation
mismatch
is the fact that revenues is so low
up until september
they had revenue of only 2.9 million
giving the company a terrible price to
earnings ratio
but we should be valuing this type of
company
based on its future potential as opposed
to its current
earnings #stocks #stockmarket #pennystocks
nano dimensions dragonfly printer prints
circuit boards and electronic devices
and its fabrica printer prints micro
objects
currently a large percentage of
nanodimension sales comes from its
hardware printers however like all
printers once a customer has bought a
printer he will need to continuously buy
the printer's ink and that provides in
NNDM another
recurring revenue source coming from its
service contracts.
The problem here is that to date they
have not sold many machines but like
with so many new technologies it can
take a few generations before a product
really takes off think of tesla (#tesla) go look
at tesla's sale figures for the first
few years
it is only in the past couple of years
that tesla has really taken off and the
share price has rocketed as a result
nano dimension only launched their
fourth generation dragonfly machine in
november and their first sales of the
new machine came in december and they
sold another machine in january
importantly look at who's buying these
machines
leading defense forces
and government agencies
these are exactly the types of customers
that you would hope for any company to
have
now I spoke about this in my last in
NNDM video but ceo Youv Stern recently
bought NNDM shares in the open
market citing his conviction and belief
in the vision strategy and future of the
company saying that recent events are
encouraging and not only that
Cathie wood has also been increasing her
position in the stock significantly
while Ark
made some major sell-offs and
reorganizations over the past two months
Cathie has continued to back up in ndm
stock
buying another 1.35 million shares only
last week on top of the several million
bought over the past few months
nano dimension ($NNDM )currently also trades
at a price to book value of 0.66
which is akin to buying the company
for 66 cents on the dollar which
presents a remarkable undervaluation not
on earnings but rather on net assets
which I have already said now for those
who say that nano-dimension have diluted
shareholders again and again although
this is true they did raise the
substantial cash on hand
via share issuance at fifteen dollars a
share
I always say if a company needs to raise
cash the best time to do this is when
the share price is high
and I say this not only from a company
point of view but also from the
long-term investor's point of view
for example
if a company needs to raise 100 million
dollars
if the share price is 100 then the
company needs to dilute shareholders by
1 million shares
but in this example if the company's
share price was only one dollar they
would need to dilute shareholders by 100
million shares
nano dimension offered 39 million shares
to raise half a billion back in february
last year
if they were raising that money right
now they would have to dilute
shareholders by nearly 150 million
shares
that's nearly four times the level of
delusion. #nndm
so in fairness they did what they did
when they needed to do it and they did
it at the best possible time and that
cash has not been wasted
as we've already seen
that cash is still sitting there in the
bank to be used to grow the business
make acquisitions and secure the
company's future which I will look at in
just a moment
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looking at trading view we can see that
nndm stock is now at the lowest point
since november 2020. the last time the
stock was this low was before all the
dilution
look at this the last time the share
price was this low
the company had assets
of 63 million
and liabilities of 10 million
giving nndm total equity of just 63
million
right now total equity is nearly 1.5
billion
looking closer we can see the steep
decline that the stock had taken in
november into december
but this appears to not be dropping as
deeply in recent weeks
this could indicate that we are
approaching
as low as this will go
that leads us on to news this week that
nano dimension announced a collaboration
with x
xt pl to develop new nanoparticle-based
conductive ink so basically xtpl's
patent protected technology provides
groundbreaking precision printing
solutions for the global electronics
market targeted for the manufacturing of
next generation microelectrics
flat panel displays and semiconductors
together they will focus on the
development
of new nanoparticle conductive ink for
ame applications enabling high
connectivity and high performance
material suitable for 3d electronic
printing and last week ndm announced the
strategic acquisition of global inkjet
systems limited who are well known for
inventing and delivering
state-of-the-art
2d and 3d printing hardware and unique
operating software
gis has more than 130 customers around
the world with a focus on high value
precision orientated applications gis is
a growing company with revenue for the
12 months of approximately 10 million
dollars and a gross margin of 51
nano dimension paid gis
18 million in cash and may pay more
based on certain financial performance
now this is very interesting for a
number of reasons
first of all gis has a gross margin of
over 5 million so 18 million dollars
seems very reasonable
seems a very reasonable price to pay
if this deal is a huge success then they
will have to pay up to 10 million more
but even that is not a big amount if
this is a huge success
secondly a lot of investors have
questioned the ceo over the past year be
raising the delusion and then not using
the cash to do anything
so a question that I ask you is
would nano dimension have had to pay a
far higher price for a company like gis
back just a few months ago
and thirdly has ceo jove stern timed
this perfectly
nndm raised tons of capital when prices
were at all-time highs then sat on the
cash
during an inflated market
and waited for prices to drop
in some cases up to 80 percent in less
than 12 months for some companies
so our nano dimension now in a position
to buy out competitors to acquire
companies at a huge discount and to
build up technology and patents at a
fair cheaper price
and do all of this without putting any
debt or financial burden onto
shareholders
as interest rates increase
there are a lot of highly leveraged
companies that will get crushed over the
coming years
the opportunity for in india
is now there
something that I speak a lot about in my
videos is not liking to see goodwill
making up a large part of a company's
assets
goodwill is where an acquisition is made
above fair value
to put it simply it is where a premium
is paid to acquire a company the
opposite of this is negative goodwill
or as it is also known
a bargain purchase
I think in the current market we could
see a scenario
where cash rich companies like nndm
begin to make bargain purchases nndm is
certainly in a position to be able to do
this if the right opportunities arise
so guys that brings us to the end of the
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is going to happen in the coming months
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make big gains this year
at the current price
I think this provides a great
opportunity to get into nndm stock while
it is still far below its net
asset value and in a position to truly
flex their financial strength over the
coming years
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