Hut 8 Mining Corp. (HUT-T)

Hut 8 is traditionally a bitcoin mining company which now has a few main operating segments; digital assets mining, managed services (infrastructure development), and high-performance computing (AI cloud computing). The majority of its revenue is from bitcoin mining (59%), 18% is from managed services, and 6% is from AI cloud computing. 

HUT has 17.8 EH/s, a pretty good level of compute power for mining. A $150M investment from Coatue to support the buildout of next generation AI infrastructure, and it holds 9,105 BTC on its balance sheet (equivalent to $590M today). HUT is a $2.6B company, sales growth is good, it is unprofitable, but AI cloud computing revenues can help to offset the weaker margins from its bitcoin mining operations. Momentum has been strong amid the recent rally in Bitcoin and the potential for a favourable political environment for the crypto asset space. We would consider it to be highly volatile and not without its risks, but we would be OK with a position while acknowledging its volatility risks and small-cap risks.
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HUTs valuation is close to its bitcoin holdings, and we feel this effectively means the market is either pricing in bitcoins price to decline or its operations to be worth near-zero. We think it looks interesting here as a value play. Overall, we would prefer GLXY due to its strong leadership, diverse operations, and history of success across crypto 'bull markets'.
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This name will follow the price of bitcoin. Fabulous run here. Not covered by a bunch of analysts, which is what you want for a young company. Pretty speculative. Management team looks talented. He needs to see an earnings path and a visible model.

Billy Kawasaki’s Insights - Billy’s most-liked answers from 5i Research. Recently added to the TSX index. A Canadian bitcoin mining company. They have strong revenue growth, low debt levels and good profitability. Valuation is good. There is risk but the company should continue to perform well in the future. Unlock Premium - Try 5i Free

(A Top Pick May 14/18, Down 21%) It had a tough go since he was on. He continues to believe it is one of the best plays to get exposure to bit coin. It is a well run company.

If you can't buy the coin directly this is a very interesting leveraged play. It is one of the biggest bit coin miners out there. Two years from now the net asset value of the company could double. (Analysts’ target: $7.85).