Cheers Ryzie, brilliant insight.

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Ghostyyy

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11/05/21

08:58

Post #: 53082806
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Originally posted by Ryzie: ↑

My view on this is that fund managers are looking to capture the increase seen by value plays that have been oversold during the pandemic. Their role is to create the best return on investment for their respective company or clients. Given the enormous run that we've just seen in growth stocks fueled by ecommerce, it's smart for them to take profits and some may not want to sell but investments are and should be managed by rules, and these rules are in place to ensure those big returns. Once a rule is triggered the sell has to happen. The rule could be a price target or a macro factor but once triggered the predetermined action of selling or buying occurs.

I'd say the increase in inflation regardless of whether it is demand pull or not, the rate of vaccinations across the globe and the gradual return to normal is giving these money managers a que to take profits and redistribute funds across value stocks. How long will this occur? Well it will continue until the rate of return in growth stocks becomes a better option. Those rules will get triggered and a change will happen. IOU in particular is the type of growth stock fund managers would be looking at imo. Given a quarter or two of strong growth, the rate of return from this investment would be hard to ignore especially as the price continues to squeeze lower and lower creating even more upside.

I recall when this initially ran to 28c and then rolled all the way back to 13c before it ran over 80c. The current price pressure is not dissimilar. It's easy for big money to ride the waves of sentiment when it comes to a business starting out like IOU. We see some epic pieces of news like the partnership with iPay88. It's an exceptional outcome and impossible to price in without knowing how much it adds to the bottom line. So we see a big initial wave of buying on the good news, then as there is no monetary value realized the price is free to drift lower as the hype dies down. The price at the moment is only 4x enterprise value so it's not exactly overpriced but without that growing revenue it's easy for a fund manager to jump in and out to ride the waves of sentiment. This is harder to do when revenue numbers come in strong each quarter like Z1P or APT. We're not there yet though so we have to ride the waves of sentiment as well. I'm expecting to see 28c at some point before a push higher based on news flow, possibly related to hard launch.

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Cheers Ryzie, brilliant insight.

IOU Price at posting: 36.0¢ Sentiment: Buy Disclosure: Held
1 Upvote

0 Great analysis

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Add OVT (ASX) to my watchlist

(20min delay)
Last 0.4¢		Change 0.000(0.00%)		Mkt cap ! $6.090M

Open	High	Low	Value	Volume
0.4¢	0.4¢	0.4¢	$502	125.5K

Buyers (Bids)

No.	Vol.	Price($)
38	18300713	0.3¢

Sellers (Offers)

Price($)	Vol.	No.
0.4¢	47338	1

View Market Depth

No.	Vol.	Price($)
38	18300713	0.003
11	15815000	0.002
9	24649999	0.001
0	0	0.000
0	0	0.000

Price($)	Vol.	No.
0.004	47338	1
0.005	7209552	17
0.006	4466638	10
0.007	1853165	6
0.008	1685714	4

Last trade - 15.31pm 05/09/2024 (20 minute delay)

OVT (ASX) Chart

Cheers Ryzie, brilliant insight.

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Cheers Ryzie, brilliant insight.

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