If you are smart, have a quick look right now at Ideanomics (IDEX). The company is expected to deliver a business presentation. In my opinion, the CEO may provide new information about the new agreement with NACFE, or information related to the acquisition of Timios Holdings Corp.
Needham Growth, Source: IDEX
IDEX signed an agreement to promote the NACFE advisory group. In my view, the management was quite smart. NACFE partners with other EV-related stakeholders. They are all well-known institutions. Investors will see IDEX associated with large corporations like Shell, Michelin, UPS, NIKOLA, or GoodYear. It will be extremely positive for the brand of IDEX. As a result, I would expect the share price to move higher in the coming weeks.
Source: NACFE
Most analysts out there don’t like IDEX because the company’s past financial performance is not great. Sales increased from $1.96 million to more than $44 million in 2019. Besides, in 2019, the company’s EBITDA was positive for the first time in many years. However, from 2014 to 2019, the earning per share was negative:
Source: Market Screener
In my opinion, financial analysts don’t understand well that the company is operating in a growing market. IDEX is operating in the electric vehicle industry, which is expected to grow at a massive rate from 2020 to 2027.
According to market researchers, the EV market will most likely grow at a CAGR of 22.6% from 2019 to 2027. In my view, if IDEX can grow sales at more than 20% y/y, the market will push the share price up:
Source: Alliedmarketresearch
How To Make Money Trading IDEX?
We noted in IDEX Share Price Goes Wild that IDEX traders follow the company’s transactions to understand the share price dynamics. Whenever there is a new transaction, traders study carefully what IDEX is about to buy. If they like the business combination, they buy shares and wait. It appears to be that simple. In this regard, have a look at the most recent transaction announced by IDEX. Investors need to understand whether IDEX will see business growth thanks to the acquisition of Wireless Advanced Vehicle Electrification:
Vancouver, British Columbia–(Newsfile Corp. – January 6, 2021) – Ideanomics (NASDAQ: IDEX), has signed a definitive agreement to acquire 100% of privately owned Wireless Advanced Vehicle Electrification, better known as WAVE. Roth Capital Partners acted as advisor to WAVE in the cash and stock acquisition, which is subject to the customary closing conditions. Source: Press Release
Conclusion
Currently trading with a market capitalization of less than $1 billion, IDEX operates in a growing industry. It does not matter that the company’s past financial performance is not brilliant. Finance is all about the future, not about the past. In my view, if the company’s business acquisitions are successful, the share price will most likely increase.
Disclosure: I don’t own IDEX shares.
Stay tuned, we will deliver more information about IDEX in the near future.
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