Okay, ive whipped up a few notes over the past couple of weeks of why i think RBO has bottomed out here and is ready to start its next phase of the life cycle which is the mark up period.
Firstly the company has had a rough time not being able to raise money in the past, constantly running on its bones and probably holding them back from really attacking the market and accelerating. They don't have this problem anymore as they are cashed up now with ~4.5mil in the bank. I'm just going to dot point some key things that i have noticed about the company that is being overlooked by the market or needs high lighting.
This sort of set up Technically and Fundamentally is my favourite sort as its got all the things i like to see when im looking for a stock...
Fundamentally - A good story, in a booming industry, but it has just lost its audience because its sh!t the bed corporately a few times, however the companies still been kicking goals and exceling in its field. All that looks to be behind it now though, because the bed messing was in relation to their cash prodominatly and that has been taken care of with a big raise recently to some big funds and major share holders at 4.5c.
MC undiluted - 12.3mil
Mc diluted - 16.3mil
Performance Shares activate at Tranche 1 - 10mil Revenue
(Prospectus) Tranche 2 - 15mil Revenue
Cashed up - ~4.5mil
Low SOI - 362mil
Management taking shares in lieu of cash - Tick
Stock has losts its audience and threads full of nay sayers and disgruntled share holders - Tick
Company still accelerating and kicking goals - Tick
Good management that listen to the market - Tick
Chart has been beat down to 52week lows and bassing - Tick
Long period of consolidation at lows - Happening now, Tick
Management with lots of skin in the game - Tick
Top 20 own ~55% of the register
Top 40 own ~70% of the register
Just a few things on my check list i like to see in a company, below are some facts about the company on why i think their kicking goals and really just stepping into gear now.
- RBO has surpassed last FY revenue of 3.2mil within 5months of the new financial year.
- The company has announced it is on track to make 4mil revenue for the first half of FY17 (Second half of 2017)
- They announced that they had surpassed the prior years revenue of 3.2mil before Black Friday sales on the 23rd of Novemeber and Cyber Monday sales on the 28th of November, which are both the equivelant to boxing day sales off the interent.
View attachment 899984
You think thats alot -
Black Friday had
682 Billion dollars worth of sales!
So they surpassed prior years revenue by mid November and before these two key dates and Christmas buying but their only predicting 4mil revenue for the for the 6months (Estimating only 800k revenue, for the second half of November and the whole month of December which are all the biggest spending bonanza dates in the year... i think not.), i think they've been cheeky here and under promised and going to over deliver here greatly. Something closer to 4.5mil - 5.5mil revenue would be reasonable i think, easily more.
They did
1.3mil in October and October is a nothing month and there only accounting for
800k for 1.5months...
To add to this under promising over delivering theory, they released their new R1 model on
Novemeber 1st, so after the big October sales figure and the R1 has been one of the best selling 3D printers on
Amazon.
Okay moving on from that bit of the story which is the online sales to the brick and mortar sales, ive mentioned they surpassed prior years revenue by mid November, this was off the back of penetration into
22 countries. On the 15th of December they released an annoncement saying that they have expanded into the middle east and now in
37 countries world wide, they've almost doubled their foot print now. More potential upside to the revenue growth, this company is now really looking like it is stepping into its stride in terms of growth with a release of a new product, world wide expansion and revenue growth accelerating quickly. Their still yet to penetrate into Asia as well, as that is a target for them, more news to look forward too.
- Directors have been taking shares in lieu of cash at a 33% premium (6 cents),
not discount.
- Their playing in a major growth industry thats just starting to get traction now, and their aiming to be one of the front runners for desktop 3D printers with their printers getting great reviews online. The picture below sums up the huge growth sector their in.
15x increase in 3D printer unit sales from 2016 - 2020.
*Note the remarks on the education sector, ill touch on this bit below.
View attachment 899978
View attachment 899294
- One of RBO's main objectives since listing has been to brake into the education sector, they know how big this is and i think its only piece of news that can really send this parabolic, a big contract in the education sector, and i know they want it bad because their trying! In Augaust this year they partnered with CDW which is a
10.4 Billion dollar company NASDAQ listed company which only partners with quality brands, "CDW, a renowned multi-brand technology solutions provider to business, government,
education and healthcare organizations in the United States, Canada and the United Kingdom. CDW operates at over
$15B in revenue and employees roughly 8,800 employees globally". From the way i understand it, schools and education systems would go to CDW as their one stop shop to buy stuff they need and CDW will have short listed a bunch of good brands for them to select from. Rather then schools going out and buying everything individually, from individual companies and brands. Now RBO is on CDW's short list of 3D printers and fillaments, along with these following brands.
- Robo 3D
- Flashforge
- XYZ
- Dremel
- Makerbot
- 3D systems
- Afinia
In the recent announcement about the raise going to institutional investors, there was a bit that caught my eye which was this snip below...
View attachment 899981
So looks like they will be tendering here for some big contracts, if they can break into this market this will be game changing for RBO and i think the company knows this very well and are striving for it. A snip from a HC poster below showing RBO taking 1st prize at a Education Product Shootout, this was not announced by the company yet but just shows they are attacking that education sector.
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The big education contract is coming!!?
- Industry Super Holdings (IFM), just come on as a Substantial holder, for anyone that dosn't know IFM they should look them up. They are one of the
worlds biggest fund managers, they recently became substantial holders on GETSWIFT (GSW) which went onto do 4 bags almost imediatly after they came on... these guys do their research. They would have some of the best analysts in the world working for them and they've parked their money here, more confirmation.
- There is also another large Instutional Investor that came on board in the last CR, which is yet to be announced, looking forward to seeing who this could be. There was obviously some interest in RBO as the big boys have now come onto the register and seeing value in the company at these levels when its just starting to step into its stride.
- More big money news i noticed and found very interesting was the recent SPP... now this was a big nudge for me. RBO recently announced a SPP to share holders for 4.5c (same price as the raise to the funds) to raise 1.5mil. The SPP was originally underwritten for 1mil, but then a few weeks later another announcement came out that the entire 1.5mil would be underwritten, increasing interest. Less than <2% of the SPP was taken up by shareholders and the underwriters took the lot. So in the past the company has struggled to raise cash, too now big funds coming on board and underwriters taking up as much as they can. Sounds like the stock is starting to turn... Potentially another Substantial Holder to come on here too.
- Company recently cancelled a terrible convertable note agreement, listening to shareholders concerns that the convertable note was a sham. Was nice to see a company listening to shareholders concerns. Ryan Legudi, RBO's Managing Director is on HC and listens to shareholders concerns, and when you email him he is pretty quick to get back to you which i like to see in a company, shareholder communication. His HC plug is
@ryanl, spam him!! jkz!!
- So recent CR has been pivotal for the company, bringing on new strong hands and filling the companies boots with cash. The sell side is finally starting to corrode, a few bits of good news like the revenue numbers for November and December i spoke about above being big (which i think they will be), or even a hint of the company announcing that their approaching cash flow positive this could easily take this betwen 6c-8c i think and a big education contract could take this too 15c+. The monthly revenue numbers are expected shortly as they normally release them along the way and the next Quarterly is on the 31st of January which lines up well with the chart breakout. A few catalysts lined up, if theirs a hint of cash flow positive i think it would work wonders for the stock as the CR's have been the big killer for here and taking that away would put many shareholders minds at ease especially with a pocket full of cash now.
- Another interesting fact i found out was that Randall Waynick is the VP of Revenue and COO for RBO, Randall worked at Sony for 25years in their hay day and was head of marketing for many years, he would be a very well connected man in the industry and know a lot of people and who to call. Randall has been taking his payment in shares in lieu of cash
That was most of my findings on the company which ive collated from company announcements and some other posters findings, i personally like the story and am waiting for this to kick. The way i see it playing out is this will consolidate along the bottom here between 4.5c - 5c till about mid to late Jan strengthening the register, then it will do a big volume spike day (20mil+) on the break out which will then put it on everyones screens, saying take a look at RBO, bringing everyone attention to the story. Seen it happen many times now with good stories in this formation. The only thing i dont like about this stock at this stage is that its in the tech sector, but the tech sector has been showing some strength recently on the ASX with some good tech stocks kicking, i battled long with myself on if i should take a position here because of the sector its in but ive seen signs of life here in the tech sector so i was happy to go ahead based on the fundamentals and the technical set up. I see RBO being back in flavour in a month or so and with brokers coming back to work late January this lines up well with RBO's breakout as well, i already know theres some interest behind this.
Some short term catalyst ive got jotted down to break us out of this holding pattern and just some general announcements that we should be expecting.
- *November sales figures being the record monthly revenues figures to date trumping Octobers 1.3mil, as this included the new top selling R1 printer release on Amazon and including Black Friday and Cyber Monday sales.
- December figures should also be high as this would have included the Christmas sales and more R1 sales
- *Company announcing there aproaching or have achieved cash flow positive - this is a big one
- *Some news around education tenders or contracts - another big one
- Another instutional investor/fund to come on as a substantial holder, possible 2.
- 31st of January is the Quarterly report
Any of the above could be the catalyst to break us out of our descending triangle formation below late Jan, just needs to simmer here at the bottom here for a bit longer till its ready, smart money will be getting set in here now.
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(20min delay)