It is better to specialize, or to diversify? Investors who prefer to broaden their horizons into multiple segments should consider Ideanomics (NASDAQ:IDEX) as IDEX stock represents a broad range of market sectors.
I’m not saying that this company is perfect. As we’ll see, from an earnings perspective, there’s certainly room for improvement.
On the other hand, IDEX stock is cheap and it has a tendency to pop from time to time. You never know when the next moonshot might happen.
So, if you’re ready to open your mind to new ideas, then I invite you to take a glance at Ideanomics.
A Closer Look at IDEX Stock
First of all, let me say that penny stocks involve risk and therefore, investors should maintain small position sizes with them.
IDEX stock is no exception to this principle. This stock has the potential to double quickly, or to get cut in half.
On three separate occasions – in 2017, 2018 and 2021 – the bulls attempted to push the stock above $5 and keep it there. Each time, they couldn’t sustain the rally.
For the past few months, IDEX stock has clung to the $3 area, give or take a few cents. Could it be basing for another run to $5?
It’s certainly possible. However, you might want to take profits if it does reach $5 again, since there’s such strong resistance at that price point.
Finally, I should mention that Ideanomics has trailing 12-month earnings per share of around -32 cents. The stockholders will definitely want to see this number turn positive in 2021.
It’s actually hard to keep track of the number of market categories that Ideanomics is involved with.
For instance, Ideanomics announced its plan to acquire US Hybrid, a California-based clean transportation company.
Also, the company acquired a majority stake of the sales and distribution arm of Treeletrik, an electric vehicle company in Malaysia.
Moreover, Ideanomics acquired Timios Holdings, a U.S.-based settlement and title company.
And here’s another one that’s completely out of left field. Just recently, Ideanomics launched TM2, a global technology metals trading platform.
It’s an interesting idea, I must admit.
Apparently, TM2 enables institutional investors to trade technology metals such as cobalt (which is used in batteries), tellurium (used in solar panels and semiconductors) and rhodium (used in catalytic converters).
One nice feature of TM2 is that the metals traded on the platform are 100% physically backed. This allows the investors to “have direct title to the underlying physical metal,” according to Ideanomics.
Plus, the physical metals can be bought and traded on TM2 with instantaneous settlement. It will be interesting to see whether this platform becomes popular with institutional investors worldwide.
In case Ideanomics wasn’t already diversified enough, now we can add electric tractors to the company’s list of niche segments.
Not long ago, Ideanomics fully acquired California-based Soletrac. That company manufactures and distributes zero-emission electric tractors that use clean, renewable sources of energy.
The press release states that Soletrac’s tractors are 100% battery-powered. It also observes that Soletrac has “limited competition” in the North American electric tractor market.
I expect that over time, we’ll see more electric tractor start-ups. Therefore, I commend Ideanomics for anticipating this trend and making an early move.
Ideanomics CEO Alf Poor expressed his geographically broad aspirations for this new acquisition.
“With farmers and business operators eager to transition from diesel to sustainable alternatives, we intend to make Solectrac the reliable, go-to brand not just here in North America, but across the globe,” Poor stated.
The Bottom Line on IDEX Stock
The main point here is that Ideanomics, as the name implies, is all about ideas.
Or more precisely, the company puts many different business ideas into action.
If you’re on board with that, and would like to enhance the diversity of your portfolio, feel free to take a small position in IDEX stock.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
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