Q: This is quite a small cap company that you have commented on a number of times, mostly favourably. Stock price has basically doubled since November, I bought some in February. I am just wondering, since you have some familiarity with the company, whether you can explain the reason for the recent price surge . Does your information suggest that adding to a small position may not be a bad, though granted risky, idea. Ie. what is going on here to suddenly drive this stock higher?
Thanks
Neil
Thanks
Neil
5i Research Answer:
Kraken this year has provided very strong financial guidance. It has also won some significant 'marquee' contracts (i.e. the US Navy). Market cap has also helped. Now over $200M, more investors can buy it. Cash flow has turned positive and EPS should more than double this year. It has a long sales cycle but it appears to be hitting on many strides right now. We think it is interesting, and would be OK adding, to a size representative of its much higher risk level.