APX (ASX) Appen, Entropy, DCF Models &amp; Investor Behaviour

Originally posted by savvyinvestor: ↑

This is my 2nd biggest position in my portfolio these days after google, since accumulating gradually since the 2.50-3.00 days. Bought some around $20-21 on the last pullback and bought some more today at 20.10.

havnt been on the apx HC threads in many months so just saw the original post by TEP and read the subsequent thread posts. Whilst TEPs analysis is technically correct, the key factor is intangible which is whether APX has just lost either market share or whether the big customers are pivoting away from Apx in favour of either competitors or internal annotation processes or projects that won’t require the same volume of annotated datasets by humans moving forward. If Apx is losing customers from a highly concentrated customer base it would require a severe downgrade, and this is exactly what mqg’s thesis and downgrade is based on.

My impression is that mqg is wrong and Apx is not losing market share or customers or facing margin pressure. I agree with TEP that this is a temporary external shock that has minimal impact on my long term investment thesis or growth expectations. I also agree that the new projects being prioritised by Apx’s customers actually may generate more growth for Apx. Although I agree with one post that Apx cannot assume they will be the winner / market leader in new verticals for AI eg radiology and autonomous vehicles, they certainly have a chance to compete in this space due to their deep content relevance / annotation expertise, their huge pool of crowd contractors and their strong ties with leading tech giants.

I have no idea what the outlook/ guidance will be tomorrow and I wouldn’t be surprised if it’s conservative as I doubt that things will have changed much since the investor call in December, and Aussie/usd headwinds will continue for months if not years, but I think with a 3-5 year outlook that Apx is a strong buy in which the reward outweighs the risk.

I am accumulating wealth not trading, so with a 20-25yr horizon I think the mindset has to be that buying companies like Apx with a long growth runway at a reasonable price is the best path to wealth creation. Trying to guess short term sp movements is a fools errand in my opinion and ends badly unless you are a short term trader with extensive experience and technical expertise as well as access to deep live data and ideally the power to drive prices, ie the ‘market maker‘ hedge funds. like mqg GS CS MS etc that can actually move short term prices through their algorithmic trading, shorting, publicising downgrades and short reports etc etc. these big banks can’t affect my long term returns however, so I just beat them by playing the long game and opportunistically buying the best companies on the short term pullbacks.

lets see where Apx is in 3 years. I would be amazed if it’s less than $30, and would expect closer to $50+, so even at $30 conservatively that’s a 50% return over 3 years.

Expand

great post mate but hey I am mid term trader, bleeding from 31.5$ so feel for ppl like us and do care about SP but sure as hell this thing will fly...I have more conviction in Apx than I had in zip!!

No.	Vol.	Price($)
3	53102	$1.09

No.

Vol.

Price($)

53102

$1.09

Price($)	Vol.	No.
$1.10	12850	3

Price($)

Vol.

No.

$1.10

12850

No.	Vol.	Price($)
3	53102	1.090
2	55468	1.085
7	265980	1.080
3	88405	1.070
3	184832	1.065

No.

Vol.

Price($)

53102

1.090

55468

1.085

265980

1.080

88405

1.070

184832

1.065

Price($)	Vol.	No.
1.100	12000	2
1.110	26500	2
1.115	166496	4
1.120	81045	8
1.125	68098	7

Price($)

Vol.

No.

1.100

12000

1.110

26500

1.115

166496

1.120

81045

1.125

68098

(20min delay)
Last $1.10		Change 0.190(21.0%)		Mkt cap ! $244.1M

Open	High	Low	Value	Volume
95.5¢	$1.12	95.0¢	$21.82M	20.63M

Appen, Entropy, DCF Models & Investor Behaviour, page-174

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