Date : August 19, 2019
There are a number of major trends defining the recent past, present, and near future in capital markets and the global economy. But surely one of the most important is the raging undercurrent of rapid innovation that has emerged in the form of the dominance of Silicon Valley, the popularity of shows like Shark Tank and Everyday Edisons, and the thriving impact of crowdfunding platforms like GoFundMe.
The trend is clear: invention and innovation have been democratized through connective technology. The world is much smaller place than it was just a decade or two ago. That allows anyone with a good idea to get it in front of the world and profit wildly from its success, if it strikes the mark.
One of the most explosive opportunities right at the heart of this niche right now may be Edison Nation Inc. (NASDAQ:EDNT). The stock has become massively devalued, and its most recent financial results frame a stock with big things in play and a ton of potential upside as the story evolves in this red hot market space.
Company: Edison Nation Inc.
Latest News: http://finance.yahoo.com/q/h?s=EDNT+Headlines
Who is EDNT
Edison Nation Inc. (NASDAQ:EDNT) has, since inception, invested ~$11M to create a propriety open innovation platform, allowing inventors to safely and securely submit their ideas to be evaluated for various commercialization paths from licensing to, most recently, crowd funding.
For inventors with a great idea, EDNT is a powerful ally. The company offers a platform covering fundraising, product development, manufacturing, marketing, and launch.
Understanding the typical crowd funding product development cycle is important for grasping the investment opportunity potential in EDNT: Edison Nation’s team of product designers and engineers work to produce a ready for production prototype, and produce media in-house to launch a crowd funding campaign. If a campaign is successful they will market the product in the “aftermarket” on sites such as Amazon & Jet. Products are generally manufactured in China with factories (“we have 10+ year relationships, generally shipping within 4-6 weeks from order”).
So, the next time you are sitting around, dreaming up the next better mousetrap, you will know where to turn to make it a reality. It’s plug-and-play capitalism for innovators and inventors.
And it’s also a fledging and possibly flourishing content and media company, with huge synergies between its media (the “Everyday Edisons” TV show) and its larger shareholder value and growth premise (an inventor-friendly plug-and-play route to monetizing strong ideas).
The most important recent catalyst is unquestionably the company’s strong financial report put out last week (and unjustifiably ignored by the market).
For the three months ended June 30, 2019, revenue increased 36.0% to $5.97 million, compared to $4.39 million in the same period in 2018. The increase in revenue was primarily attributed to successful product launches and scaling of EDNT’s acquired brands throughout 2018.
Gross profit increased 61.8% to $2.04 million in the second quarter of 2019, compared to $1.26 million in the second quarter of 2018. Gross profit margin was 34.2% in the second quarter of 2019, compared to 28.8%, in the same period in 2018. The increase is primarily a result of a favorable product mix of goods sold to customers.
“During the first half of 2019, EDNT achieved significant revenue growth of 49.7%, to $11.7 million, for the six months ended June 30, 2019, driven by the continued success of our IP and the scale of our consumer brands ,” said Chris Ferguson, Chief Executive Officer of Edison Nation. “The company continues to aggressively source innovative ideas via our proprietary Edison Nation Innovation Platform, which selects the ‘best-of-the-best’ inventions utilizing proprietary algorithms, and brings them to market quickly. EDNT’s intellectual property, media, and consumer product launch engine will continue to drive growth in 2019 and beyond. Simultaneously, we are leveraging our combined platform to achieve significant operational and cost efficiencies”.
Apart from the strong execution, the company is also riding an explosive string of catalysts, including announcements detailing:
- An expansion of the company’s core inventor platform, highlighted by the addition of two new features – “Edison’s Design Challenge” and Entrepreneur Partnership;
- The licensing of the Ezy Dose Medi-Spout, a pill assisting bottle cap that utilizes patented technology to ease the swallowing of medication and vitamins, from Apothecary Products, a global leader in consumer wellness;
- The launch of a new product line targeting its theme park and entertainment customers – a list that includes the likes of Disney and Universal Studios, among others;
- The launch of the “911 Help Now” pendant in March, which drove $800K in initial purchase orders from Audio America, a leading consumer electronics distributor, in conjunction with a strategic sales and marketing association with Stealth Technologies;
- Expanded sales for its Goodie Gusher party product line in the North American marketplace, driving growth in footprint to nearly 650 retail locations across the region;
- The introduction of two new products in the toy and infant-sleep category – Lullaplayer and My Buddy Bernie, a children’s MP3 player designed to look and feel like a classic portable record player, and a voice activated, interactive playmate for kids that requires no set-up and works right out of the box, respectively;
- Successful entrance into the eyewear market in January with Smarter Specs, the first patented glasses with concave lenses, enabling consumers to wear the glasses higher up on the nose bridge, allowing them to look over the glasses without having to tilt their head down, easing neck strain;
- Its announcement of the relaunch of the Emmy award-winning TV show, “Everyday Edisons”, an inspirational reality TV series produced under license by Edison Nation, chronicling the stories of first-time inventors as they launch their unique products into the marketplace in conjunction with the Edison Nation product development platform;
- Partnerships with multiple Fortune 500 companies, including Walmart, Target, Rite-Aid, Disney, Home Depot, and Amazon.
This list of powerful drivers in the context of a management team that appears to be driving on all cylinders right now makes the undervalued and extremely cheap chart for EDNT all the more compelling.
The most important point to make right off the bat here is the float: it’s tiny, at just 2.9 million shares. That alone should spark interest. A constricted float is like a powder keg of dynamite that hasn’t been lit yet. If the crowd starts to realize how undervalued this stock might potentially be right now, the stage could be set for a squeeze as too many investors start to compete for too few actively floating shares. It’s basic supply and demand.
Beyond that, the stock is basing along support in the $2/share zone, with a recently broken down trend line now in effect defining the action. RSI is at a calm and supportive sub-50 score, and the MACD is holding positive on the momentum histogram – another potentially bullish factor in a basing range such as this.
Finally, the chart is sporting a huge bullish oscillator divergence dynamic right now as both the RSI and MACD are seeing higher lows against price per share recording simultaneous lower lows over the past 3 months. In other words, the stock may be showing a turn under the surface based on oscillator measurements, even though it hasn’t become manifest yet in terms of share prices.
EDNT (Edison Nation Inc.) is an inventor ecosystem driving IP, media, and innovative consumer products.
Edison offers innovation sourcing, design, sales, fulfillment and shipping services. Edison Nation’s model is to source innovative ideas for internal launch or license to brand partners.
Throughout 2019 and beyond, Edison Nation looks to establish prominence in the media space through its television show “Everyday Edisons” and additional properties such as Edison Academy.
For more information, please visit www.edisonnation.com.
- EDNT is a uniquely positioned business forging a new path to capitalize on the crowdfunding, start-up, and democratization-of-invention trends, with a first-rate media asset already in place to drive its marketing strategy.
- EDNT has a small trading float of just 3M, which suggests the stock could launch higher on any additional influx of interest.
- EDNT is making real money, with trailing revs already coming in at $20.4M.
- EDNT is starting to see major topline growth, with quarterly y/y revs increasing at 36%.
- EDNT is coming off an RSI trough under 40, pointing to a massively oversold stock now heading back the other way.
- EDNT just recorded a MACD Bullish reversal, suggesting a technical change in trend.
- EDNT is executing well, and has a stable of Fortune 500 partnerships to draw from as it pushes for new and accelerating growth.
The opportunity in what we might call “crowdsourced innovation” is ripe and remarkable. And EDNT may well be the only listed pure-play to move directly on this opportunity as a powerful model for shareholder value.
The fact that the company is already lining up a truly perfect marketing vehicle for this platform – its “Everyday Edisons” TV show – just adds fuel to the fire. With a number of key product lines all seeing growth, a stable of powerful strategic partners, and a very compelling technical pattern in play to go along with a tiny 2.9 million share float, the upside potential for this story after its strong financial report suggests EDNT bears close attention.
This is a perfect example of our objective: to get a stock with this kind of major potential in front of you today, ahead of the crowd.