Linius vs Brainchip

Brainchip vs Linius

This note is for Investors, not traders.

There are not many stocks that can grab the attention like the two above.

They both have a competitive advantage like few others. Brainchip ‘probably’ has a new computer chip that ‘may’ change the way that computers manipulate data. In regard to Linius, it ‘has’ a new way of segmenting video data into definable sections using AI. No other company globally has this.

Investing,not trading is all about searching out the companies that have a competitive advantage or as Buffet would say a “moat” around the business they are in.

So how do you value it? On a big picture basis you can look at the total market cap a company has relative to others with a similar competitive advantage even if they are in a totally different business. I think BRN and LNU have more similar traits than any others listed on the ASX.

Brainchip went from a market cap of $50m to a cap of $1.4 billion then back to the current cap of about $500m. It took years of development to finally get to the marketable product stage but that’s where they are today.

In regard to Linius, it has also taken years to get to the marketable product stage with a number of false starts . But here it is today. So the question is , should LNU have a market cap of $90m as it currently does, or should it be higher than that? In my view, and I guess in the view of the Sequoia analyst who just did a report on the stock valuing it at 25+ c ,it is worth more than the 6.5c it is currently trading at. If you say the analysts 25c DCF is fair,then the market cap would be about $400m which actually is close to the $500m that Brainchip is currently trading at.

To sum up then,I think that the analyst is correct in valuing Linius and it may actually be conservative given the relative competitive advantage that Linus actually does have over Brainchip. I do like both stocks and I do hold both.

Please note this is just my view and you should do your own research. Yes research. There are too many ‘traders’ in the market these days. It was not healthy seeing my Brainchip go from 5c to 94c and back to 35c. There are now too many current holders who are underwater and looking for their way out as soon as the share price improves. I would much prefer to see Linus go from 3c to 25c plus slowly with Investors doing their work on the company and understanding the business they own rather than seeing traders hype the 6c stock they own whilst potentially not even knowing the story behind the share price they are focused on.

Good luck to all

The Tankman.

Brainchip vs Linius

This note is for Investors, not traders.

There are not many stocks that can grab the attention like the two above.

They both have a competitive advantage like few others. Brainchip ‘probably’ has a new computer chip that ‘may’ change the way that computers manipulate data. In regard to Linius, it ‘has’ a new way of segmenting video data into definable sections using AI. No other company globally has this.

Investing,not trading is all about searching out the companies that have a competitive advantage or as Buffet would say a “moat” around the business they are in.

So how do you value it? On a big picture basis you can look at the total market cap a company has relative to others with a similar competitive advantage even if they are in a totally different business. I think BRN and LNU have more similar traits than any others listed on the ASX.

Brainchip went from a market cap of $50m to a cap of $1.4 billion then back to the current cap of about $500m. It took years of development to finally get to the marketable product stage but that’s where they are today.

In regard to Linius, it has also taken years to get to the marketable product stage with a number of false starts . But here it is today. So the question is , should LNU have a market cap of $90m as it currently does, or should it be higher than that? In my view, and I guess in the view of the Sequoia analyst who just did a report on the stock valuing it at 25+ c ,it is worth more than the 6.5c it is currently trading at. If you say the analysts 25c DCF is fair,then the market cap would be about $400m which actually is close to the $500m that Brainchip is currently trading at.

To sum up then,I think that the analyst is correct in valuing Linius and it may actually be conservative given the relative competitive advantage that Linus actually does have over Brainchip. I do like both stocks and I do hold both.

Please note this is just my view and you should do your own research. Yes research. There are too many ‘traders’ in the market these days. It was not healthy seeing my Brainchip go from 5c to 94c and back to 35c. There are now too many current holders who are underwater and looking for their way out as soon as the share price improves. I would much prefer to see Linus go from 3c to 25c plus slowly with Investors doing their work on the company and understanding the business they own rather than seeing traders hype the 6c stock they own whilst potentially not even knowing the story behind the share price they are focused on.

Good luck to all

The Tankman.

Brainchip vs Linius

This note is for Investors, not traders.

There are not many stocks that can grab the attention like the two above.

They both have a competitive advantage like few others. Brainchip ‘probably’ has a new computer chip that ‘may’ change the way that computers manipulate data. In regard to Linius, it ‘has’ a new way of segmenting video data into definable sections using AI. No other company globally has this.

Investing,not trading is all about searching out the companies that have a competitive advantage or as Buffet would say a “moat” around the business they are in.

So how do you value it? On a big picture basis you can look at the total market cap a company has relative to others with a similar competitive advantage even if they are in a totally different business. I think BRN and LNU have more similar traits than any others listed on the ASX.

Brainchip went from a market cap of $50m to a cap of $1.4 billion then back to the current cap of about $500m. It took years of development to finally get to the marketable product stage but that’s where they are today.

In regard to Linius, it has also taken years to get to the marketable product stage with a number of false starts . But here it is today. So the question is , should LNU have a market cap of $90m as it currently does, or should it be higher than that? In my view, and I guess in the view of the Sequoia analyst who just did a report on the stock valuing it at 25+ c ,it is worth more than the 6.5c it is currently trading at. If you say the analysts 25c DCF is fair,then the market cap would be about $400m which actually is close to the $500m that Brainchip is currently trading at.

To sum up then,I think that the analyst is correct in valuing Linius and it may actually be conservative given the relative competitive advantage that Linus actually does have over Brainchip. I do like both stocks and I do hold both.

Please note this is just my view and you should do your own research. Yes research. There are too many ‘traders’ in the market these days. It was not healthy seeing my Brainchip go from 5c to 94c and back to 35c. There are now too many current holders who are underwater and looking for their way out as soon as the share price improves. I would much prefer to see Linus go from 3c to 25c plus slowly with Investors doing their work on the company and understanding the business they own rather than seeing traders hype the 6c stock they own whilst potentially not even knowing the story behind the share price they are focused on.

Good luck to all

The Tankman.

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