Overnight I had time to reconsider my NUH accumulation strategy.
For some time now in the 4's I have been topping up with small accumulations at each pip. Every one of them was filled including a lot at 3.9c yesterday. I have reset all buys down to below 3.5c as I believe we may see a 2-3 week period of small shareholder frustration, that will lead many to simply capitulate and throw the towel in.
Whilst I do not consider that to be wise, having seen it many times, suggests to me it is a very real possibility.
My current single biggest position increased by 10% yesterday and the stock made most news headlines, breaching $7 for the first time in 81/2 years. Where were the headlines when it was 4c (old money 40c after 1:10 consolidation)?
There was deadly silence and more people prepared to buy a hot dog than their shares. It was a near death experience and a slow burn recovery. Almost a life changing experience, except it was not my first Lazarus play.
I consider NUH to be positioned similarly. The OTC changes could easily create a re-rating. Likewise, a successful launch and product support of the HP Max2 product could easily create a re-rating. IQ Max Pro could easily create a re-rating. Each of these are genuine company game changers well more significant the DTC sales.
However, there's one major problem. NUH cannot control the timing of the OTC or HP deals and investors are not patient enough to wait.
I have found this to be a common characteristic of every 10 and 20 bagger that I have been fortunate enough to be associated with. It is also common of my 100% losses. Make no mistake, Nuheara could become insolvent quite quickly and before any of the opportunities I described are realised. That is the space this company occupies.
It is a capital intensive business, has only modest current income and has little control over its supply chains or distribution models. No investor, large or small should not consider the risk of a wipeout here.
I expect yesterday's 4c financial results took the wind out of most investors' sails. Many wise posters commented on the re-definition of the term "mass production". I was somewhat stunned that invoicing, which included HP was so light. The production run appears to be almost test scale rather than mass production, and I was not convinced JM's presentation indicated large volumes in the near term. Without being disrespectful, he had an almost "cocky" feel about him throughout the presentation without his words being particularly so.
I believe management are quite confident in the position of the business even though an empirical analysis of the year's results, the sales trends and the diminishing cash float suggest little to be confident about, but much to be hopeful for. I believe I have the competence to assess the financial position both historical, current and forward looking. My post today, bears in the essence of that assessment, rather than specific line items for which we are all fortunate to have kickit2me's quite brilliant analysis.
Based on what I saw and heard yesterday, I remain committed to my now significant investment. I sense an inflection point coming. But right now, in the absence of any new update over the course of August, I think the disappointment of yesterday's announcement, the soft SP of NUH and the frustration of long suffering shareholders will win the day.
Don't lose heart in the low 3's if that should come to pass. Then again, don't invest more than you can afford to lose.
I wish all here the very best of luck but the pain will endure for a while longer and there will be little any of us can do about it. My therapy is my other investments, my AFL football team and my family (not in that order). These distract me from the day to day musings of Nuheara posters some of whom I find wildly optimistic and others I find sadly sadistic and vindictive.
Good luck to all long term share holders GLTALTSH
Jack
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