Riot Blockchain: Recent Acquisition Is A Testament To Management's Long-Term Thinking
Riot Blockchain: Recent Acquisition Is A Testament To Management's Long-Term Thinking
August 18, 2021
Price (as of close on August 17, 2021)
$32.76
Rating
BUY
Price Target
Riot Blockchain is the largest publicly traded cryptocurrency mining company in North America. Its mining operations are based out of Coinmint LLC’s facility in Massena, New York and the recently acquired Whinstone facility in Texas.
Riot Blockchain Inc. (RIOT)
Riot Blockchain is the largest publicly traded cryptocurrency mining company in North America. Recent large-scale purchase orders of Antminers and the acquisition of Whinstone Mining has positioned the Company to significantly increase its Bitcoin mining hash rate. We initiate with a BUY rating and a price target.
Investment Thesis
- Riot Blockchain is the largest publicly traded cryptocurrency mining company in North America.
- Recent large-scale purchase orders of Antminers and the acquisition of Whinstone Mining has positioned the Company to significantly increase its Bitcoin mining hash rate.
- The acquisition of Whinstone adds 300 MW of capacity (expandable up to 750 MW) and provides Riot with a clear and de-risked path to growth.
- The declines in network hash rates following the crackdown on crypto mining in China is bullish for North American miners. The decrease in competition has created an enhanced profitability window for miners like Riot.
- The company is poised to grow revenues and earnings over the near-to-medium term. We initiate coverage with a BUY rating and a price target of .
PRIMARY RISKS
- The Company’s performance in linked to the market price of Bitcoin which has high volatility.
- Cryptocurrency regulation, both in the United States and internationally, could adversely affect the price of cryptocurrencies and the cryptocurrency mining industry.
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Singular Research's Compelling Values Webinar 9/16
Mon, Aug 16, 2021 at 6:15 AM PDT
REGISTER NOW
Please join us for our Compelling Values Webinar on Thursday, September 16 starting at 6:30 AM PDT. The prospective presenting companies are listed below. All times are in PDT.
- Voyager Digital Ltd. (VYGVF)
- Riot Blockchain, Inc. (RIOT)
- Bigg Digital Assets Inc. (BBKCF)
- Emergent BioSolutions Inc. (EBS)
- good natured Products Inc. (GDNP.V)
- Luna Innovations Inc. (LUNA)
- Iradimed Corp. (IRMD)
- Seabridge Gold Inc. (SA)
- Giga-tronics Inc. (GIGA)
- IEC Electronics Corp. (IEC)
- Esports Entertainment Group Inc. (GMBL)
- Canasil Resources Inc. (CLZ.V)
- Banco Latinoamericano (BLX)
- Dynasty Gold Corp. (DGDCF)
- Graphite One Inc. (GPHOF)
- Salem Media Group Inc. (SALM)
- Acme United Corp. (ACU)
- Comtech Telecommunications Corp. (CMTL)
- Harvard Bioscience Inc. (HBIO)
After registering, you will receive a confirmation email containing information about joining the webinar.
Emergent BioSolutions: Primed For Booster Takeoff
Emergent BioSolutions: Primed For Booster Takeoff
Emergent BioSolutions (EBS) is a global specialty life sciences company that develops and commercializes vaccines, drugs and devices that address public health biodefense threats. The Company is a preferred provider of biodefense products and services to the U.S. government under multi-year contracts. Its portfolio includes the only FDA-approved anthrax vaccine and smallpox vaccine and NARCAN nasal spray for treating opioid overdose. The Company’s products are sold mainly in the U.S. as well as internationally.
August 2, 2021
Price (as of close on July 30, 2021)
$65.92
Rating
BUY
12- Month Target Price
Emergent BioSolutions (EBS)
EBS secures FDA permission to resume production of the Johnson & Johnson COVID vaccine at its Bayview facility. We reiterate our Buy rating and price target.
Q2:21 Highlights
➢EBS announces plan to resume production of the Johnson & Johnson COVID vaccine at its Bayview manufacturing site. The facility has the capacity to manufacture 120 million doses per month
➢The US Dept. of Health and Human Services exercise contract options valued at $182 million covering delivery of doses of the company’s ACAM2000 smallpox vaccine in 2021 and $56 million covering delivery of its VIGIV smallpox therapeutic.
➢EBS builds revenues outside the US by securing a contract with the Canadian government for deliveries of Anthrasil, its’ treatment for inhalational anthrax. In addition, the company received approval from Belgium authorities to sell its’ Trobigard auto-injector, an emergency treatment of exposure to nerve agents or toxins.
➢Sales of the company’s NARCAN nasal spray rise 46% YOY to $106.2 million and EBS anticipates a decision regarding its patent infringement lawsuit currently being argued in the US Court of Appeals before year-end 2021.
➢The company’s CDMO business ends the June quarter with new business of $53 million, contract backlog of $1.1 billion and an opportunity pipeline of $672 million. New business was offset by $108 million of negative contract modifications mainly related to winding down work on the AstraZeneca COVID vaccine at Bayview.
We updated our revenue and adjusted EPS estimates to reflect June quarter results and guidance and reiterate our BUY rating and
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Olympic Steel Inc: The Early Stages Of A Winner
Olympic Steel Inc: The Early Stages Of A Winner
Olympic Steel is a leading U.S. metals service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel, aluminum, tin, pipe, and tubular products.
July 19, 2021
Price (as of close on July 16, 2021)
$28.54
Rating
Buy Long-Term
Price Target
Olympic Steel Inc. (ZEUS)
Q1:21 earnings were strong from improving market conditions. Strong demand and limited supply have caused metal prices to rise, and the trend is likely to continue for the remainder of the year. We increase our target price and maintain our rating at Buy Long-Term.
Q1:21 Highlights
Q1:21 revenues were $463.1 million, up ~30.7% from Q1:20 due to higher pricing (+32.1% YOY).
➢ All three segments - Carbon Flat (+21.4% YOY), Special Metals Flat (+42.8% YOY), and Tubular & Pipe Products (+43.7% YOY) reported higher sales.
➢ Operating income was $31.5 million in Q1:21 versus operating income of $3.0 million in Q1:20. We note that there was LIFO income of ~$1.0 million in Q1:21.
➢ Adjusted EBITDA was $37.8 million in Q1:21 versus $7.4 million in Q1:20. All three segments delivered positive EBITDA for the quarter.
➢ Excluding LIFO income, adjusted EPS was $1.97 in Q1:21 compared to $0.02 in Q1:20.
➢ Management expects favorable market conditions to continue for the rest of the year.
➢ We adjust our estimates for 2021. We maintain our rating at Buy Long-Term and increase our target price to .
PRIMARY RISKS
➢ The Company’s sales and earnings are highly dependent on steel prices and any decline in prices could negatively affect operating results.
➢ The Company faces risks stemming from a heightened U.S.-China trade war. Any further escalation could weaken results.
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Kirklands Inc: Management Continues To Deliver Their Promises
Kirklands Inc: Management Continues To Deliver Their Promises
June 28, 2021
Price (as of close on June 25, 2021)
$22.82
Rating
BUY
Price Target
Kirkland’s Inc. (KIRK)
Kirkland’s Inc. (KIRK) The company announced strong Q1:21 results, delivering its most profitable Q1 in over five years. Management guided for margin improvement in the near to medium term, which should boost profitability. We decrease our target price to and maintain our rating at Buy.
Q1:21 Highlights
Q1:21 revenues were $123.6 million up 60% from Q1:21. For Q1, comparable sales i ncreased 75.3% YOY while e-commerce comparable sales increased 42% YOY.
➢ E-commerce accounted for 30% of overall Q1:21 sales versus 24% i n the p revious q uarter (Q4:20).
➢ Gross profit for Q1:21 was $40.2 million, up 293% compared to $10.2 million i n Q1:20. Gross margin increased 1,930 bps YOY to 32.6% in Q1:21.
➢ EBITDA was $7.7 million or 6.2% of sales compared to a loss of $17.1 million in the prior year.
➢ Adjusted net income at $1.8 million in Q1:21 or $0.12 per diluted share versus an adjusted n et loss of $17.7 million or $(1.27) per diluted share in Q1:20.
➢ We adjust our estimates based on the quarter end results and management’s commentary. W e decrease our target price to . We maintain our rating at Buy.
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Comtech Telecommunications: Recent Outerbridge Letter Proves Singular’s Thesis
Comtech Telecommunications: Recent Outerbridge Letter Proves Singular’s Thesis
CMTL is a leading provider of secure wireless communications systems for both commercial and government customers worldwide. The products include satellite earth station modems, troposcatter systems, and wireless 911 systems.
June 28, 2021
Price (as of close on June 25, 2021)
$26.59
Rating
Buy Long-Term
Price Target
Comtech Telecommunications (CMTL)
Comtech Telecommunications (CMTL) CMTL announced solid Q3:21 results. Despite the impact of COVID-19 and a loss of government business in Afghanistan, we believe CMTL has many opportunities ahead which should lead to strong growth. We maintain our target price at per share and keep our rating at Buy Long-Term.
Q3:21 Highlights
➢Q3:21 revenues were $139.4 million, up 3.2% compared to Q3:20, primarily due to higher sales in the Commercial Solutions segment (+16.7% YOY), partially offset by a decline in the Government Solutions (-15.5% YOY) segment.
➢ Gross margin declined 120 bps YOY to ~38% in Q3:21 versus 39.2% in Q3:20 due to increases in costs fromorder and production delays and supply chain disruptions.
➢ Adjusted EBITDA was $17.7 million or 12.7% of net revenues in Q3:21, compared to $12.4 million or 9.1% of net revenues in Q3:20.
➢ Non-GAAP net income at $6.8 million or $0.26 per share compared with $1.2 million or $0.05 per share in the same quarter last year.
➢ During Q3:21, the company won several new contracts for its satellite ground station technologies and 911 call routing solutions.
➢ For FY:21, CMTL is projecting revenues to be in the range of $580-$590 million. Adjusted EBITDA is expected to be in the range of $74-$76 million.
➢ We maintain our target price at .We keep ourrating at Buy Long-Term.
PRIMARY RISKS
➢ A broad economic slowdown remains a key concern as a majority of the company's satellite modems are sold into lesser developed countries.
➢ The business is highly dependent on the budgetary decisions of government customers, including the U.S. government. Any cut in budgets could impact CMTL’s earnings.
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GreenBox POS: A Potential Crypto Based Multi-Bagger
GreenBox POS: A Potential Crypto Based Multi-Bagger
GreenBox POS, a technology company, develops, markets, and sells blockchain-based payment solutions. The Company's blockchainbased systems are designed to facilitate, record, and store a volume of tokenized assets, representing cash or data, on a blockchain-based ledger. GreenBox POS was incorporated in 2007 and is based in San Diego, California.
June 28, 2021
Price (as of close on June 28, 2021)
$12.15
Rating
BUY
12- Month Target Price
GreenBox POS (GBOX)
GreenBox POS (GBOX) After the successful launch of their Gen 3 software, revenues grew 2,437% to $4.7 million in Q1:21. During the quarter, processing volume grew to $315 million which was a sequential increase of 141%. The Company has made several acquisitions and aligned management for their upcoming token launch which should transform the payment processing industry. We are bullish on GBOX’s long-term prospects. We initiate with a BUY rating and a .
Investment Thesis
➢ GBOX delivered a strong Q1:21 with revenues up over 2,437% an d p rocessi ng volume up 141%.
➢ GBOX is the only end-to-end, transactional ecosystem that is Payment Card In dustry (PCI) Level 1 compliant, the highest PCI rating possible.
➢ GBOX’s stabilized Gen 3 ecosystem fulfills both the back and front ends of the payment processing chain which will allow the firm to capture a more significant market share of transaction volume.
➢ GBOX’s token is reversible with a finite-life and settles instantaneously. No o ther token h as these similar characteristics.
➢ The Gen 3 ecosystem has no barriers to scalability which will bolster GBOX’s p rofitabili ty as processing volume increases.
➢ The Company has several patents on their technology, making it nearly impossible for a competitor to copy their ecosystem.
➢ We are bullish on GBOX’s long-term prospects. We initiate coverage with a BUY rati n g an d a price target of
PRIMARY RISKS
➢ Merchants could be slow in adopting Gen 3 and/or the token. This hesitati on co uld result in lower processing volume and revenue.
➢ The joint venture in the GBOX token may be delayed or be less than anticipated.
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Esports Entertainment: Competitive Gaming And Online Gambling Growth Equate To Large Upside Ahead
Esports Entertainment: Competitive Gaming And Online Gambling Growth Equate To Large Upside Ahead
Esports Entertainment is an online gambling company that offers esports entertainment, esports wagering and igaming and traditional sports betting. The company offers odds wagering, fantasy and pools on various esports events on its licensed and secure Vie.gg wagering platform and owns and operates an online sports book at SportNation.bet. In late 2020 Esports Entertainment became the first esports-focused gaming business to acquire a US gambling license.
June 30, 2021
Price (as of close on June 29, 2021)
$10.88
Rating
BUY
12- Month Target Price
Esports Entertainment (GMBL)
Esports Entertainment delivers 129% sequential revenue growth during Q3:21 and raises FY22 revenue guidance from $70 million to $100-$105 million. We reiterate our Buy rating and .
Q3:21 Highlights
➢ GMBL operating esports gaming platforms, event venues and owns proprietary esports infrastructure and technology. The gaming market consists of at least 2.5 billion gamers globally. Some 500 million of these gamers are esports fans. Surveys indicate that given the chance ,50% of gamers would like to wager on game outcomes, creating a $750 million esports wagering market projected to expand to $3 billion in five years.
➢GMBL generated $5.4 million of Q3:21 revenues, up 129% from Q2:21, and gross profits of $3.1 million, up 199% from the prior quarter as a result of organic growth and the acquisition of Lucky Dino.
➢In addition to completing the Lucky Dino transaction, during the March quarter the company closed the purchase of Esports Gaming League, completed a $30 million share offering, launches its Vie.bet and SportNation.com brands on its Malta gaming license, filed a New Jersey gaming license and signed esports tournament partnerships with several professional sports teams.
➢In late May GMBL acquired Gameday Group’s B2C business operating under the BetHard brand for €16 million cash and a 12% net gaming share for two years. This acquisition is expected to add at least $31 million to annual net gaming revenues as well as two new gaming licenses, including one in the Swedish market.
GMBL upped its FY22 revenue guidance to $100-$105 million versus consensus estimates of $70 million. We reiterate our Buy rating and .
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