The $50k Challenge – Update 14

The $50k Challenge Update 14 – 14/07/2020

Stock Code: 8CO

Shares Purchased: 255,000

Share Price: 0.065

Reasons for Buying:

  1. Management own 25% of the register
  2. No Debt
  3. $1.8m Cash in the bank
  4. Major clients including various Australian Government departments
  5. Financial Analysis:
    1. FY20 revenue up 8%. This would have been much higher if not for COVID impacts
    1. SaaS revenue up 30% in FY20
    1. The company achieved a net operating cash inflow of $46k in Q4 2020. This was the companies second positive operating cashflow quarter of the year.
  6. Impacts of COVID have started to subside with the last week of June experiencing a threefold increase in activity compared to April 2020.
  7. Enterprise value of only $11m provides high potential for future share price appreciation growth once revenue growth returns to normal as COVID lockdowns ease further.

Risks:

  1. If COVID restrictions do not ease in the short to medium term revenue growth will be difficult to achieve.
  2. The company has sufficient cash in the bank, however if COVID impacts persist the company may seek to raise additional capital.

To find out more about how I analyse stocks that fit the criteria of the $50k Challenge  check out my Penny Stock Investing course.

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