There’s certainly a tremendous amount to like about Remark Holdings (NASDAQ:MARK). The company has unique products that appear to be very useful for fighting the novel coronavirus, one of several reasons to like MARK stock.
Remark also has an offering that can help brick-and-mortar stores a great deal, and the company’s products utilize artificial intelligence, which is a great technology and very popular with investors.
To top it all off, Remark has a stake in a company that’s backed by celebrities and is rumored to be launching an IPO soon.
Remark’s Products for the Novel Coronavirus
Remark offers “thermal imaging and scanning solutions” that are being used to combat the spread of the novel coronavirus. According to the company, its products not only monitor body temperatures like traditional thermal devices, but also automatically check whether everyone in a location is wearing required personal protective equipment, such as masks, and practicing proper social distancing. In addition, the system automatically counts the number of people in a building.
Further, Remark’s products can “scan high traffic areas to detect individuals with higher than acceptable skin temperature,” and they provide “contactless control access” to secure locations. Finally, Remark says that, unlike competing systems, its thermal imaging products can be easily used by those who have not been trained in the use of such devices.
It added that the device can “quickly find the most accurate part on the face to take the temperature” and indicated that it can scan more people faster than competing products.
As long as the coronavirus pandemic continues, Remark’s products can save a great deal of money for many companies. One employee can quickly check the body temperatures of large establishments’ customers and workers.
That same employee, who apparently will not require a great deal of training in using the device, will also quickly be able to detect whether everyone in the establishment is complying with rules about PPE. And they also could determine whether all the occupants are practicing proper social distancing and following capacity limits. Finally, according to Remark, the device automatically checks whether people are authorized to enter certain areas, eliminating the need for some person-to-person security checks.
Importantly, Remark’s CEO, Kai-Shing Tao reported that it was seeing “very strong demand” from top companies in multiple industries for its system. Tao added that the company was “closing on average one to two large deals a week” with firms looking to use the system to help cope with coronavirus issues.
Remark’s Products for Stores
Along with a partner, Remark’s Chinese subsidiary is carrying out a deal to provide AI products to China Mobile’s (NYSE:CHL) 17,800 stores in the world’s second-biggest economy. Remark and its partner have provided systems that enable “facial-ID, traffic counting, and smart queue management.” More specifically, the product allows consumers to find the nearest stores. check how many customers are waiting in line at each store, and obtain a ticket online that will allow him or her to be helped by a customer service representative at a store.
It sounds like Remark’s system will help consumers by enabling them to determine the best time to visit a store and the best location to visit. It will also ultimately reduce the amount of time that customers need to wait for service. Of course, companies that make their customers happier are more likely to succeed.
A Shot at Participating in a ‘Hot’ IPO
Immediately after going public through an initial public offering, or IPO, stocks often soar. That’s particularly the case for highly anticipated IPOs. But it’s usually very difficult for retail investors to get access to the shares of companies that are about to launch such “hot” IPOs.
MARK stock could give mom-and-pop investors a chance to benefit from such an event. That’s because Remark holds a 4.5% stake in a small healthcare technology company called Sharecare. The latter start-up was co-founded by the well-known TV doctor, Dr. Mehmet Oz and, according to a John Gilliam, writing on Seeking Alpha, it’s been backed by Oprah Winfrey and Sony (NYSE:SNE). Moreover, Gilliam noted that there have been rumors which suggest that Sharecare could file an IPO in the next few months.
Reason to Be Cautious
Remark’s CEO Tao appears to have no prior executive experience at a major technology company or any company that sells products.
Prior to becoming Remark’s CEO in 2012, he was “chairman and chief investment officer of Pacific Star Capital Management,” according to his bio. Founded in 2003, Pacific Star now says that it manages $1.6 billion of assets. Before joining Pacific Star, “Tao was a Partner at FALA Capital Group, a single-family investment office.”
Additionally, no other member of Remark’s C-suite appears to be listed on the company’s website. On a positive note, members of Remark’s board do have impressive resumes. For example, Theodore Botts worked as an executive for UBS (NYSE:UBS) and Goldman Sachs (NYSE:GS), while Dr. Elizabeth Xu was CTO of BMO Software and is currently an adviser at the Massachusetts Institute of Technology.
Bottom Line on Mark Stock
The company’s products and technology sound extremely useful and promising. Moreover, it appears to have important competitive advantages, while multiple large firms are interested in its products. Finally, Remark could give investors a rare ticket to an extremely “hot” IPO, and the stock’s market cap is below $250 million, making its valuation reasonably attractive.
I think that risk-tolerant, growth investors should buy the shares. But due to the CEO’s lack of technology experience and the fact that he has not previously led a firm that makes products, I would advise investors not to devote a large percentage of their portfolios to the stock.
Larry Ramer has conducted research and written articles on U.S. stocks for 13 years. He has been employed by The Fly and Israel’s largest business newspaper, Globes. Larry began writing columns for InvestorPlace in 2015. Among his highly successful, contrarian picks have been Lyft, solar stocks, and Snap. You can reach him on StockTwits at @larryramer. As of this writing, Larry Ramer owned shares of Remark.