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what's up guys and welcome back to the channel today i want to talk about a stock that divides opinion i have covered nano dimension on the channel before but right now i feel that this is hugely undervalued and provides a unique opportunity i see a lot of comments saying that this stock is overvalued at the current price this is simply not true so today i want to discuss why the company is about 400 million dollars below its true value and why major institutional investors such as blackrock morgan stanley and kathy wood as well as management are buying up shares right now if you've been watching my channel over the past few months you'll have seen the huge gains that we have made recently and why patience really pays off in the stock market so could i ask you to kindly hit that like button and help me reach my target of 500 likes on this video this is not financial advice and i encourage everyone to do your own due diligence now let's dive into it with a quick overview of the company for anyone who's new to nano dimension so who are nano dimension nano dimension is a provider of intelligent machines and fabrication of additively manufactured electronics ame ama technology is a unique technique to print hype heads high performance electronic devices layer by layer from scratch high pits are electronic boards with complex geometrics that cannot be produced in the traditional pcb manufacturing process the technology injects simultaneously dielectric polymer ink and conductive silver ink from from a special printer called the dragonfly ldm ame technology presents significant advantages over traditional manufacturing processes for example in printed antennas it quickly adjusts to the required size of the pads and their distances between layers hence reducing production time it enables the printing of several types of antennas as one unit in a single print step unlike the traditional way in which antennas are assembled from multiple parts prepared by various technologies it enables varied components to be printed on the same batch which accelerates the optimization process the ama technology allows for multi-layer boards to be created by providing up to 52 layers with connections between layers this is a vast improvement from traditional technology which provides single-sided and double-sided pcbs this technology also allows the flexible circuitry the global flexible circuit industry recorded revenue of 13 billion in 2019 and is expected to grow at a rate of 11 for the next few years demand for this will surely further increase with the need for lighter smaller devices with greater functionality and wearable tech the company's main product is the dragonfly the light out digital manufacturing system is the industry's only comprehensive additive manufacturing platform for around-the-clock 3d printing of electric of electronic circuitry the precision platform uniquely integrates an extremely precise inkjet deposition printer with dedicated nano inks and optimized 3d software to print electronic circuits such as printed circuit boards antennas capacitors and sensors this is state of the air technology this is very much the technology of the future but today in my opinion their technology is so advanced that the market that they are aiming at hasn't even got to a stage of needing their technology yet what sets nano dimension aside from other operators in the 3d printing space is that they are specifically focused on the niche of 3d printed electronics this is a market that is expected to be worth somewhere between 2.3 and 3.9 billion by 2026 so this is a very interesting article nano dimension cheap with cash on hand and growing sum of parts nano dimension has seen a large pullback this year in stock price despite having nearly 1.4 billion dollars in cash on hand a fair valuation looks to be closer to six dollars when looking at cash on hand along with the current sum of the parts which would hint at potentially 30 percent upside now this begs the question of is dimension really undervalued or overvalued and there are a few ways to value a company i've had a lot of comments recently to my previous nano dimension videos telling me that i am wrong where i have said that i think the stock is undervalued and i have been told that the company is grossly overvalued and it would take over 100 years of growth for this company to be worth its current value of just over 1 billion dollars so let's look at the financial statements to see just how wrong that statement really is looking here at the balance sheet we can see that the company has total equity of 1.495 billion this figure is gone from taking the total liabilities away from total assets in other words if they were to liquidate all assets and use the proceeds to discharge all liabilities this would leave the company with 1.495 billion dollars the current market cap of nanodemention is just over one billion dollars so this stock is heavily discounted right now by about 400 billion and we can clearly see here that total assets is 1.52 billion and total liabilities is only 28 million dollars which leads me to the next point sometimes when you see this scenario where there are huge losses or a huge cash burn rate but looking at the profit and loss we can see that they have an operating loss for nine months for this year of just 53 million dollars so although they have extremely low revenues and are posting losses at this rate if they keep making the same loss of 53 million every nine months it would take approximately six years before they would burn through that 400 million discount so for those people who try to value nano dimension based on revenue that is completely flawed a company should never be valued on its p l now getting back to the seeking alpha article nndm has around 1.4 billion in cash available for future expenditures this alone hints at a discounted valuation for the company with a market cap of just 1.1 billion dollars due to the unique strategy of the company revenue growth can be a tough indicator to compare to peers valuation will become a sum of parts situation where each company acquired adds to the story ideonomics is a similar company with this strategy focused in the ev space so far nano dimension has acquired names such as a simtec deep cube and more focusing in the 3d printing electronics and machine learning industries this has led to big customer brands such as l3 harris and hinsolt as well as government contracts now these are huge deals l3 harris is a 40 billion company and is one of the largest government and defense contractors in the united states and hinsalt is a major german multinational with focuses on sensor technologies for protection and surveillance missions in the defense security and aerospace sectors based on the current cash assets and some of the parts a very conservative fair price in our opinion would be a market cap of closer to 1.4 billion dollars this would hint at approximately six dollars price target are over 30 percent upside of current prices without even factoring in potential for growth again looking back at the nano dimension balance sheet looking at the total equity figure of 1.495 billion this is only 5 million dollars away from that 1.5 billion valuation this completely disregards the company the products the technology and patents i would agree that this is a very conservative valuation but like always there has to be a reason why a company would be trading at a price far below its fair value so let's look at the risks involved in ndm has no debt so the greatest risk currently is the time and cash burn which i have already discussed as well as the adoption of 3d printing manufacturing industry at scale but it does appear that ama technology is being adopted well in the small scale electronics industry and i do not see this as being a long-term issue but only time will tell so in summary nano dimension can be tough to gauge exact valuation with very few competitors in this new up and coming space the amount of cash on hand positions them very well to be a first mover and control a majority of the growing industry this has even attracted the eye of innovation leaders such as cathy wood who own shares of nano dimension in their portfolio which i will look at in a moment overall the apparent upside at current prices appears to be around 30 percent giving a stock a short-term price target of just six dollars long term this could go much higher with an estimated maximum downside of just 10 for the foreseeable future so this appears to be a solid small investment to tip one's feet in the speculative 3d printing space now since the time of this article a few days ago the stock did actually drop 10 to as low as 3.84 cents on friday but bounced back very quickly to finish at 4 15.
investors who closely follow kathy wood know that she is very fond of nano dimension she has gradually built up a position in the stock and now has over eight percent ownership of the company since may her two funds had made no purchases but starting from august 30th ark once again started buying in indian stock which raises the question of whether or not this is a good time to buy and kathy has been buying ever since kathy has added millions of shares to her nnd in position over the past three months which we can see here so with the all-time low prices what will trigger a recovery in nanodimension i looked at possible triggers in my previous video and not much has changed so the first potential trigger is acquisitions jobstern has spoken about this before the main purpose of raising 1.4 billion dollars is to acquire complementary companies that can either give better access to customers or help advance the technology capabilities of the company the second trigger is operational advantages now this is very interesting and for me this is the most likely nano dimensions 3d printers cannot keep up the status quo products but going forward the production will become cheaper faster less error prone and more flexible this point is similar to how 2020 seem to be an inflection point for electric vehicles as evs finally were able to compete with regular cares and soon be even better than them the next trigger is onshoring bringing back production to the us and europe i think this is less likely but it is possible at the very least western companies would invest more in production machinery of which at least a part of this could be in 3d printers for pcbs if an industry-leading company such as tesla would place a sizable order or enter into some kind of partnership with an ndm it would send out strong message to tesla competitors and even to companies from other industries the order or partnership would be a commercial proof of concept which will certainly make the company's vision more trustworthy so let's take into account here that the company have only sold about 70 machines to date of course another huge trigger would be that they actually start selling machines nano dimension has sold very few machines to date again i covered this in my last ndm video but they have just released a new dragonfly 4 machine in the past few weeks and this has been very promising straight away with news on december 6th of making their first sales of the dragonfly 4 systems to leading defense and government agencies and this is in addition to the two machines that have completed beta testing with other leading customers in other news something that i love to see in companies is large institutional investors and insider trading looking at market beat we can see the nano dimension is currently in the lower quarter of its 50-day range and just bounced off rock bottom of its 52-week range which suggests huge upside potential the market cap of the company is only about 1.03 billion with average volume of over 15 million shares institutional investors here own over 33 of the company and they have been buying up shares during the year this includes the likes of blackrock and morgan stanley amongst others 135 institutional investors and hedge funds held shares of nanodimension during the previous two years the most heavily invested institutions were arc investment management state street corp and black rock and with kathy very heavily invested into nano dimension again in the past few months i feel that the time is very near for this stock to bounce back strong but kathy is not the only one buying just this week ceo jove stern bought shares of nano dimension in the open market for approximately five hundred thousand dollars i always see this as a very bullish sign when management go to the open market to buy shares and stern added that recent events are encouraging such as the launch of the new dragonfly and its sales but also accommodate that increasing my investment in nanodimension stock was led by my conviction and belief in the vision strategy and future of the company in addition i have responsibility to create an upside for myself and my family and i feel that this is the safest way to do so so guys that brings us to the end of the video if you've watched all the way through then you are a true legend please hit that like button it really helps the channel out a lot i really like this stock and i think that this has huge potential and i really see the current price as being near rock bottom so if you want to know more about this and want to hear my thoughts on the future of nano dimension then comment down below if you're new hit the subscribe button and bell notification follow me on twitter and i'll catch you in the next one
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