Stockchase Opinions

Brian Madden Nuvei Corp NVEI-T TOP PICK Mar 23, 2023

Scorching hot, Covid-era IPO. Went up in parabolic fashion, and then down symmetrically. Regaining momentum. Global payments company in different verticals like online betting, social gaming, foreign exchange trading. Smaller business in crypto. Recent acquisition deepens exposure in less-cyclical verticals like healthcare, very accretive. Increased revenue guidance. Founder-led. Large addressable market. Despite the runup, undemanding multiple at less than 20x. No dividend.

(Analysts’ price target is $71.26)
$57.410

Stock price when the opinion was issued

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COMMENT

He bought it early this year. Has been disappointing. It's in the penalty box. He won't own it for long, but holding on for now. That said, there will be a bounce, because the recent sell-off was overdone.

WATCH

He got stopped out. Still likes it, watches it. Challenge is that unprofitable tech has been left by the market. Market's very particular about numbers and guidance. Wait for the tide to turn.

COMMENT

A leader in Canada. Report in June highlighted alleged financial discrepancies. Frightened the retail side, though perhaps not the institutional side. Great company, but needs to prove itself over the next quarter or two.

(Analysts’ price target is $30.50)
DON'T BUY

Doesn't know it that well. This hasn't bounced as much as other tech stocks, perhaps because it's in fintech, and that may mean it won't bounce back as soon or as high as other tech.

PARTIAL BUY

He once owned it, but was disappointed by it. They should have added more guidance before their last report. Guidance was a big problem. But it's certainly cheaper now and you can own it here, as well as $18.50 and maybe $16. In a competitive field with Shopify and PayPal.

HOLD
Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research

NVEI has $466M in revenue in Europe, Middle East and Africa (no individual country breakdown) so certainly is not immune to the sector's slowdown. Large cap US fintech stocks are also getting hit hard this week. Negative momentum does have a way of feeding upon itself, and NVEI's results and guidance and customer loss are adding more concerns for investors. The market backdrop has sharply turned, and small caps are getting crushed all over. NVEI's dividend confused investors, considering its debt. The crypto rally should help it, a bit, but for now fear, anger at the company and higher interest rates are driving the selling. 
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PAST TOP PICK
(A Top Pick Nov 28/22, Down 16%)

Recent IPO in Canada. Volatile business. 2023 a tough year for smaller tech names with higher interest rates. Will continue to hold business. Believes company will be able to raise earnings. Is expecting strength in share price. 

PAST TOP PICK
(A Top Pick Mar 23/23, Down 38%)

Timing on entry was not excellent. Loud and vocal short-seller took a lot of momentum away. Now discounted compared to other payment processors. Getting mojo back on the price chart.

BUY

Has recently bought shares. Stock weakness due to payment space difficulty. Technology changing which makes it hard to judge cash flow. Overall, is a good company. 

DON'T BUY

Has lagged the Canadian tech sector. Used to own, wouldn't be back in soon. On its recent partnership with ADBE, he tends to own the big payment systems like MA and Visa, big beneficiaries of the resurgence in the economy.