Investors are always on the hunt for the next, next big thing on Wall Street. Sometimes though and as Nano Dimension (NASDAQ:NNDM) points at, going small could a great vehicle for printing profits in your trading account. Let’s look at what’s happening off and on the NNDM stock price chart and what an appropriate risk-adjusted decision aligned with those findings might look like.
A year ago, NNDM was a much smaller stock. Not that it was alone. Apple (NASDAQ:AAPL). Alphabet (NASDAQ:GOOGL). Tesla (NASDAQ:TSLA). Last March, of course, the broader market was reeling from a historic bear market driven by the novel coronavirus pandemic. Undeniably though, that situation also produced one of the single greatest investment opportunities for many of those same stocks.
Since bottoming on March 23 at a price of $52.74, AAPL stock is up more than 100% in one year’s time. That’s no small feat, but particularly so given today’s market cap for Apple shares is a staggering $2 trillion dollars. Similarly, tech giant GOOGL is up about 90%. And of course, TSLA stock and the EV market’s undisputed top dog, has toppled those yearly performances with its rocket-like gain of more than 665%.
In one way however, tech company NNDM has them all beat.
Over the past 12 months, NNDM stock has ballooned by 1,260%. To be fair, the buck or rather the 75 cents also stops there. Today, after all, Nano Dimension is still only a mid-cap valued at just $2.5 billion after beginning this past year’s journey at a scant 75 cents a share.
Nevertheless and appreciatively, there is the argument that unlike its much larger tech peers, NNDM has become a much different company during this time. Moreover and today, Nano Dimension has the right kind of qualities to become one of the next, next big things in technology.
NNDM Stock Then and Now
Nano Dimension has been around the block. The Israeli-based tech company was established in 2012 with its primary business focused on 3D technology for printing electronics circuit boards. It never really amounted to much of a payday for Nano Dimension or its investors. Today though, and under the direction of a new management team, NNDM has pivoted. And all indications are that it appears to be working for new and important customers and key investors alike.
As ARK Funds’ Cathie Wood recently discussed, NNDM has turned itself into a broader application 3D printed technology device company. And with products like the company’s AI-powered DragonFly 3D printing system, which has radically shrunken a room of equipment for this type of additive manufactured electronics into a compact box-like machine, the strategy is working.
Wood is keen on global defense agencies increasing interest and becoming Nano Dimension customers given that base is quick to embrace highly differentiated technology. Follow the money, right? The trail doesn’t stop there either. As the CEO and founder one of Wall Street’s best performing ETF managers this past year, and ARK known for its calculated bets on new trends in tech, that smart money is also worth paying attention to. And incidentally, Wood’s does have more than just a small bias.
Today, the investment manager owns positions in Nano Dimension in two of its funds. That commitment includes the Ark Autonomous Technology & Robotics ETF (NYSEARCA:ARKQ). What’s more, NNDM stock is ARKQ’s single largest holding on a share basis with nearly 7 million shares owned and valued at a respectable 2% of the fund’s allocation. Enough said?
NNDM Stock Weekly Price Chart
Source: Charts by TradingView
Aside from governments’ and ARK’s support for Nano Dimension, what’s also nice to see are the results of NNDM’s multiple capital raises over the past year. Importantly, the company’s cash position now stands at approximately $1.5 billion. It’s not only healthy, but the war chest should allow management to continue investing in operations, R&D and talent so critical to successful growth stories.
What can also be appreciated right now is the larger correction in NNDM.
Short-term, the dilution from secondaries has proven a challenge for existing shareholders. But if we’re to follow the money and keep focused on the big picture, weakness like today’s is reasonably an opportunity for buyers. And with shares recently confirming a test of NNDM’s 62% Fibonacci level, shares now sporting a bullish oversold stochastics crossover and stationed near the signal price of the bottoming candlestick, enough said? Right?
For investors that are agreeable with buying into the Nano Dimension narrative, but maybe are a bit less risk-tolerant than Cathie Wood or ARK, the May $10/$17.5 collar on NNDM stock looks about right both off and on the price chart.
On the date of publication, Chris Tyler holds positions in Ark Innovations ETF (ARKK) and its derivatives, but no other securities mentioned in this article.
Chris Tyler is a former floor-based, derivatives market maker on the American and Pacific exchanges. The information offered is based on his professional experience but strictly intended for educational purposes only. Any use of this information is 100% the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.