This is the year of the blockchain revolution. In one, small sense, this means crypto currencies. But in another, MUCH larger sense, this means huge increases in productivity, accuracy in accounting and record keeping, security, speedy transactions and communications, voting record security, etc. etc. etc. It is companies who deal with that latter group of uses for this technology that are going to lead the next iteration of technological advances, not the crypto mining.
In the short term, which is the time period most day and swing traders think in, blockchain has meant mining of crypto currencies. Traders have caused massive spikes in companies who determine that they are going to mine cryptos. Problem is, most of those companies are terribly run, and pay so much for their computing power that they need much much higher prices in crypto currencies to make it worth mining.
Additionally, a slew of companies, that are being exposed for the shells they truly are, have taken advantage of the market attitude towards blockchain and sucked a tremendous amount of wealth out of the market–mostly from retail investors. As they get exposed, their stock prices have plummeted (Ahem, RIOT). We don’t need to get into that, because this article isn’t about the sham companies. This article is about one of the good ones, which is working with Blockchain in capacities beyond crypto currencies.
TEUM is a company that has completely adopted this new technology, and is pushing products that take advantage of a multitude of uses.
- Instead of mining crypto currencies, TEUM is allowing its users to transfer crypto currencies, and pay with cryptocurrencies using their secure platform.
- TEUM has outlined how it plans on harnessing blockchain technologies in security, identity management and settlement. (Seeking Alpha, Pareteum Offers New Whitepaper on Blockchain Approach; shares rising)
- According to the same article, TEUM plans on monetizing blockchain uses in the telecommunications and Internet of Things markets.
Additionally, TEUMs contracts have been front heavy, where money comes in from large basises of existing customers that the companies TEUM signs on with already have. Like this one in Europe. Or this one in Asia.
TEUM has become a traders dream stock over this last year, as after years of stagnancy, there has been tremendous innovation. The market is starting to catch on to all of TEUM’s products, as seen by their many PRs about contracts they have signed. There have been some VERY significant moves in the stock price this year as a result. Lets look at the chart.
I want to look at the big move up in late June, the mid/late December move, the Nov. 13 EA, and the Aug 14 EA.
- The August 14 EA was a beat of 9.09%. They beat the EPS estimate by a penny. There was a small pop in the SP during this EA, but whatever it was that traders really wanted to see, had not quite fabricated yet.
- The Nov. 13 EA was another very narrow beat, and again the market wasn’t thrilled. But that lachrimose feeling ended quickly, when the SP started rising in mid December.
- In December everything really came to a head for TEUM. It started with a contract they signed in China to team up with Artillium and “pursue new and developed markets, and create accelerated growth and market penetrations for both companies.” (Seeking Alpha, add link)
- The hike continued through December and January as TEUM announced contract after contract, and partnerships, and smart cities in easter europe, etc. etc. etc.
- But it was the late December development, when TEUM added support for Blockchain in its billing and settlement services, enabling their customers to accept payments in many cryptocurrencies. The stock price popped 61% at that time. (Seeking Alpha, Parateum adds cryptocurrency support, shares +61%)
TEUM has created a huge backlog to support their growth, with a seemingly never ending supply of clients. Additionally, there are some technical indicators that make me somewhat Bullish.
A big one for me is the StochRSI. Briefly, we use the RSI to determine if a stock is overbought or oversold. But when the RSI is between 20 and 80 we can use the stochastic RSI which basically tells us whether the RSI is overbought or oversold “at its current level.” TEUMS Stochastic RSI is actually .60, which is arguably considered oversold.
Additionally, TEUM is trading above all its moving averages, which is a very bullish indicator for the short term. The VWAP is at 1.81, and CCI is at 172.88, both of which indicate a “BUY.” **[I get my technical analysis from the app Stock Tracker, which is unfortunately only on the iPhone.]
Last thing to note that is objectively bullish is the insider trades over the last year. There have not been any in the last 3 months. However, there were significant purchases by insiders over the last 12 months, and those insiders have not sold anything.
OK, it is time for some subjective analysis. It seems to me that traders have always expected more out of TEUM then the TEUM management forecasts. It shows when the stock price drops a little bit right after each of the last 2 EA’s, even though they did beat projections. But over the last year, and especially over the last 6 months, TEUM has mobilized their trajectory by signing contract after contract. They have expanded their backlog, and focused on the side of Blockchain that isn’t the fad.
I think that this year TEUM is likely to surprise the market with an EA beat that is significant. With the rapid increase in contracts, especially over the final 4 months of last year, this next EA may finally show what longterm investors have been anticipating for the last 2 or 3 EA’s, i.e. a beat of well more then a penny per share.
I started adding TEUM at 1.76 long ago, but recently added many more shares at 2.18. I would like to hold it through their next EA, which I am seeing as March 27th (tentatively) according to Stocks Live. I believe that TEUM could have a significant positive reaction to any objective proof in the next EA that the backlog and contracts are resulting in revenue windfalls. However, I will keep an eye on the stock price. If it increases more then 50% between now and the EA, I will likely protect my gains and trim my position substantially before the announcement. EA beats don’t always mean stock price pops-as evidenced by TEUM on the last 2 EA’s!
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Disclaimer: Nothing I say is investment advice. It is all a subjective opinion of a person who, honestly, has a lot of questionable opinions. I like Cheetos with caramel for example. I know, gross. But also, delicious. My point is, don’t buy TEUM because I said so. Do more research, and make your own decisions! But DO try some Cheetos with a caramel next time you have the chance. You will be pleasantly surprised.
Disclaimer: I already told you, but in case you didn’t realize it, I have a long position in TEUM.