My Penny Stock Pick of the Week
2022 is going to be a volatile year.
I don’t usually share personal anecdote, but today I will make an exception.
When my own job faced disruption in 2020, I too like millions of people turned to DIY investing. My portfolio like so many others had a great year, how good? My very modest starter portfolio had over 150% in profits.
It was good enough for me to do my due diligence on startups or struggling companies I felt had real value potential.
The tactic I used was to mostly wait till the bottom of prices and buy very little selectively for swing trades. If you do that right enough, the profits add up and compound. At least in 2020, it was the golden year of the retail DIY trader, and I was along for the ride.
My focus was on Penny Stocks. That was my major area of research from around May, 2020 till the present time. In the liquidity pumped equity markets, February, 2021 was the peak of speculation and crazy volatility to the upside.
Since then, Penny Stocks and micro cap stocks have been among the worst investment assets in a severe bear market that shows no signs of slowing down. While you can never “time the market”, the 5-year chart on Penny stocks can still have some relevance for buying low and selling high.
My Pick of the Week
Usually I save my exclusive picks for my premium members, but today I will openly share my buy call on this. As I used to do on Wordpress at the Last Futurist, I still continue to do here on sub stack. I cannot continue to do so without community support.
Here is a stock that’s down already 24% year to date. It’s down over 60% in the last year, so take my esteemed interest in this name with a grain of salt. When the going is awful in penny stocks, you are considered not much better than a gambler. However when there’s blood in the streets, I take notice.
So why do I like this company? Exela Technologies, Inc. is a global business process automation company. They have a diversified client base with some major contracts. The stock recently has a history of meme-support. Although this is recent and it was rather a brief flirtation.
The company has a market cap of only $122.7 million. That’s exceedingly small. Their sales is about 1.2 Billion and they are not profitable. They have over 17,000 employees, although I only saw about 7,000 listed on LinkedIn.
I believe the stock is worth buying at a price point of $0.49. The stock currently trades at about $0.67. The average analysts has a price point of $4 for the stock.
The stock reached $4.34 in July of 2021.
They recently added a contract worth about $6.2 million. Their penetration into the healthcare system is impressive.
Exela is a global business process automation company with operations in the United States, Europe, and other regions. I think they have a serious chance of rebounding and turning their company around.
Exela have announced a significant reduction in its debt and expects FCF to increase in 2022.
I like the industries they are involved in and they are very skilled at PR.
It’s incredible what one year of a bear market does to a sector like micro cap stocks. They have been competing and losing against crypto assets in recent years. Still there is such a thing as being a value investors for incredibly low-cap stocks, hard as it may seem to believe.
Their total revenue have been declining but so have their operating expenses. This implies to me that they are becoming more efficient. They also recently got a major Property Insurance firm as a client.
If you are interested in following the stock’s social media account they are:
Their bottom was around $0.40 in April, 2020 and it seems they could approach those levels again in early 2022. That’s when I will likely get back into the name. Always do your own due diligence, and this is not financial advice.
Exela is a bit like a firm that fell from grace with too much debt. The stock used to be a $30 stock and this also elevates its meme-potential. BPA is also just an industry that I personally as an investor can relate to. Here is how they describe themselves:
Exela Technologies is a business process automation (BPA) leader, leveraging a global footprint and proprietary technology to provide digital transformation solutions enhancing quality, productivity, and end-user experience. With decades of experience operating mission-critical processes, Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100.
Here is their website.
I consider Exela somewhat diversified in their client portfolio. This is due to how many different sectors they can impact with their solutions. Some of which are:
Finance and accounting
Human capital management
Industry-specific solutions for banking
Their HQ is based in Texas.
I think their robust niche in the market also means they are a bit less risky to invest in. The sentence that really grabs me personally is the following which I will repeat: Exela serves a growing roster of more than 4,000 customers throughout 50 countries, including over 60% of the Fortune® 100.
It is good marketing. In a way I think they are a digital transformation company if you think about it. Through cloud-enabled platforms, built on a configurable stack of automation modules, and over 17,500 employees operating in 23 countries, Exela basically rapidly deploys integrated technology and operations as an end-to-end digital journey partner.
Something lost on many of the analysts is that Exela was founded recently, in 2017. We haven’t really even started the age of automation proper yet. Startups like these are learning how to do it. The company operates through three segments: Information & Transaction Processing Solutions (ITPS), Healthcare Solutions (HS), and Legal & Loss Prevention Services (LLPS). I think given some more time, management has a favorable chance to figure out what works to become profitable, or they will get acquired.
So that in a nutshell is why I recommend the name and have been bullish on them for a couple of years. Share this article if it was useful to you.
Thanks for reading!