Q: Can I get your updated review of Kraken Robotics, your last question was in Dec. I know of a few pretty smart microcap investors that have been increasing their positions during this pullback. Those investors believe that the pullback is due to the ex CEO selling a ton of his shares. But they don't think there is any issues with the company that would influence him to sell off all his shares at these prices. I'm just a spectator but would love your unbiased review of the company. Thx
5i Research Answer:
It is not uncommon for an ex-executive to sell shares, regardless of a company's prospects. Often, they simply need money for their next venture. Q1 revenue rose, and the company affirmed guidance for the year. It has won some decent contracts since then. Revenue growth looks good, and it should be net profitable this year, with EPS forecast to double in 2024. Insiders still own 12%. Our cautious comments on its balance sheet and small size remain, but this year at least the fundamentals are moving in the opposire direction (up) to the stock price (down). This can often create good opportunities for longer term investors.