Ann: Tinybeans Launches Machine Learning to Brands, page-5

Very interesting little company with a service offering that appears to have real appeal in a very large addressable market.

There is clear signs of credentialisation of the business idea, not just in subscriber growth and strong NPS, but also is the on-boarding of advertisers.

These guys have custodianship of some really valuable date, so the revenue opportunity is large and the ease of scale-ability means that if the strategic execution is successful, this company could be generating quite significant levels of profitability in 4 or 5 years' time (in the several millions of dollars order of magnitude... low-tens of millions, possibly).

As is the case for any stock whose price has trebled over the preceding 6 months, the stock price is likely to do some work at the current level (or even below it) for a period of time.

But it would not surprise me if, in 5 years' time, the current market value of the company will be shown to reflect a P/E of 2.0 or 3.0 times earnings at that future point in time.

Put another way, yes, it's market value has gone from $12m to $35m in 6 months, but if the trajectory of this company's operating and financial performance continue, it will certainly not still be a $35m company for long.

The "space" in which it operates, and the large addressable market, leads me to think that any successful enterprise in that space doing what TNY is doing (not to mention all the optionality around what it could also do in terms of creating new revenue streams) would be fitting of a valuation measured in a few hundreds of millions of dollars, as opposed to just a few tens of millions of dollars.

Of course, like all these fast-evolving,"disruptive" technologies, it is hard to know what one doesn't know, or to predict from where an even better mousetrap might emerge, thereby rendering a service such as TNY's to be worthless.

Which means the level of investment conviction can't be high at this stage, and that portfolio positioning can also never be too punchy in terms of weighting.