Peter Cook converted $316k options.
Insider buying, confident Novatti boss buys $316k of stock
Kicking off what could be a big year for digital payments company Novatti Group (ASX: NOV), CEO and Managing Director Peter Cook has signaled his intent for the Melbourne-based fintech with a purchase of $316k worth of NOV shares in what could be a sign of news to come in 2022.
An original co-founder of Novatti, Cook has led the Company since it listed on the ASX in 2016 and remains one of its largest shareholders having never sold a single NOV share.
His purchase comes following a very productive year for Novatti which saw it double its headcount while also increasing its revenue by 55%.
Driving Novatti’s growth has been its digital payment services where the Company has a diverse portfolio of products that enable businesses to pay and be paid digitally, including with cryptocurrency. For example, Novatti clients can leverage its partnership with Ripple to make near instant payments into SouthEast Asia via RippleNet.
If Cook’s purchase, which came in the form of options being exercised at a strike price of $0.19, spending a total of $316,666, is a sign of things to come, it could be a very busy year for Novatti.
Making the purchase of new shares even more surprising was the fact the options did not expire until November 2022, thereby being exercised 11 months before expiry.
With those options exercised, Cook now holds 13,174,571 NOV shares which represents approximately 4% of Novatti Group.
In the months ahead, it is anticipated that Novatti will be granted their banking licence which will provide a new gateway to their digital payment ecosystem for both consumer and business customers.
The Company is also expected to scale their merchant acquiring division, following recent licences from Visa and Mastercard, while Novatti has also flagged its intentions to service the customers of accounting software platform Reckon Limited, in which Novatti has a 19.9% strategic stake. Cook has commenced discussions with Reckon, which could potentially see Novatti provide digital payment services to the 106,000 Reckon users.
Novatti also recently appointed SouthEast Asia specialist Abigail Cheadle to their Board of Directors after announcing their $8.4 million acquisition of ATX.
Podcast released yesterday by Emersion founder & CEO Paul Dundas.
"What's Coming From Emersion in 2022"
https://open.spotify.com/episode/6vZBxY8a8WbS7mCL3Yrq6y
The markets are slowly turning after last years rotation from growth to value shares. Inflation will prove to be transitory. Inventory levels are rising & sales are slightly up or flat at best. Supply chains will return to normal & bonds yields are declining. Only a matter of time until 'risk-on' again.
NOV is not the only company to be undervalued at present. Most growth/tech shares are currently undervalued by about 50% & some as much as 75%. Now is the best time to be buying & not during peak SP last year. SP will return to it's underlying fair value.
NOV generated $5.3M revenue in Q1 FY2022 comprised of $4.2M payment processing growing at 103% YOY + $1.1M flat growth component.
The $4.2M is growing at 19% MOM = $5M forecast Q2 FY2022 + $1.1-1.2M flat component = $6.1-6.2M forecast for Q2 FY2022. There is also about $0.75M per quarter to come via the ATX acquisition which completed end of November so there should be 1 month or $250k additional revenue this quarter.
Q2 FY2022 Forecast = $6.35-6.45M x 4 = $25.4-25.8M run rate x 10 = $254-258M MC + $20M cash + $21M RKN = $295-299M MC or 89-90c SP.
Current SP is about 33% of fair value. SP could easily have been $1 today if the markets didn't rotate so use this opportunity to buy NOV at a steep discount.
S&P 500 Climbs as Tech Comeback Continues on Less Hawkish Powell
By Yasin Ebrahim
Investing.com – The S&P 500 steadied Tuesday as tech continued its rebound as U.S. bond yields edged lower after Federal Reserve Chairman Jerome Powell delivered less hawkish than expected remarks, soothing fears of aggressive Fed policy tightening.
Powell confirmed the Fed plans to begin normalizing policy including ending bond purchases, hiking rates, and letting bonds on its balance sheet mature later this year.
“I would expect that this year 2022 will be the year in which we take steps toward normalization [of monetary policy],” Powell said.
That would involve “ending asset purchases in March, raising rates over the course of the year … and “perhaps later this year, we will start to allow the balance sheet to run off.”
Surging Treasury yields, which had weighed on growth sectors of the market like tech, took a breather, supported the rebound in tech pushing the broader market higher.
Meta Platforms (NASDAQ:FB), formerly know as Facebook, Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), Alphabet (NASDAQ:GOOGL), which make up about a quarter of the S&P 500.
The recent pullback in tech was linked to “to the fear of a Fed being more hawkish and more aggressive in its policies going forward … but Powell calm the markets in his hearing,” Darren Schuringa, CEO of ASYMmetric ETFs said in an interview with Investing.com on Tuesday.
“The most powerful lever the Fed has to pull on right now is starting to shrink its balance sheet by selling bonds,” Schuringa added. "But Powell backed away that saying we're going to let our balance sheet roll off … that’s not as disruptive in the market as selling bonds."
Semiconductors continued to pare recent losses, up nearly 2%, following a 5% jump in Advanced Micro Devices (NASDAQ:AMD) after KeyBanc upgraded its rating on the stock to overweight from sector weight, citing cloud data center growth in 2022.
Energy was also among the top gainers on the day, as oil prices moved higher on expectations that the demand impact from the omicron impact may not be as severe as initially feared.
Occidental Petroleum (NYSE:OXY), Hess (NYSE:HES) and APA (NASDAQ:APA), led the energy sector move higher, with the latter up more than 8%.
In a potential sign of renewed appetite for risk assets, defensive corners of the market such as utilities and consumer staples were on the back foot.
