Steve10
Regular
Typically, companies create value for their shareholders by generating profits, increasing revenue, and growing their market share. Shareholders can also benefit from dividends or share buybacks, which can increase the value of their shares.
BRN is currently similar to a pre-production miner. The product TAM/resource JORC has been confirmed as significant & the production plant is being constructed. The miners have offtake agreements similar to BRN having licensee's/partners prior to production revenue.
Numerous pre-revenue lithium miners currently heavily shorted similar to BRN. They are good quality companies as is BRN. It's just the nature of the cycle & the shorters taking advantage. I can understand shorting the lithium miners now due to the lithium price more than halving & they are still many months away from production revenue but BRN doesn't make sense.
Semiconductor companies such as Intel, AMD, Nvidia & Qualcomm are above or near 200sma on daily charts. The semiconductor ETF SMH has golden crossed & is above 200sma. Anything AI related is very hot at the moment except BRN. WBT was hot for a while until the shorters took notice & shorts have increased from nil to 2.67% in less than a month resulting in SP decline of 36.7%.
So revenue is what is currently required by BRN for SP to increase. And some assistance from rate cuts to increase DCF valuation.
BRN revenue should commence soon with more licence agreements & royalties. If the Renesas M85 chip has Akida IP revenue should commence next quarter. Renesas's MCU market competitors such as NXP & STM will be next as they will not want Renesas to dominate the AI MCU market alone. They are all using ARM IP for their chips & Akida integration has been validated.
With regard to US interest rates, the US Feds will need to get above CPI rate. CPI should decline to around 5% by May & US Fed rate will be at 5.25% with one more rate hike. Should inflation continue to decline to say 4.5% in July then the US Feds could commence rate cuts as they will be highly restrictive with monetary policy at 5.25%.
Could cut 0.5% to 4.75% & still be restrictive above the CPI rate of 4.5%. US CPI would have declined 50% YOY from 9.1% in June 2022 to 4.5% in July 2023. Another 50% decline YOY would bring it down to 2.25% by July 2024 allowing the US Feds to reduce interest rates to 2.25% being neutral or lower if they want to stimulate the economy. That would imply 3% of rate cuts from July 2023 to July 2024.
High interest rates reduce DCF valuations & low interest rates increase them.
Tricky market at the moment. Big sell off last hour yesterday in US resulting in red day. Has been mentioned to me whichever way the market goes the night of FMOC it will break out in opposite direction. Finished red so hopefully we see some green now. US Futures green for the time being.
RSI is currently very low on BRN daily chart similar to November & mid-February sell offs. RSI has also bottomed on weekly chart similar to April 2019. Has to bounce soon. SP might do the same as 2019 when it doubled from 4.2c in April to 10c intraday by May when US Feds paused. Got rejected by 200sma on daily chart in 2019 at first attempt. Daily chart has declining 200sma at 78.5c so it appears shorts will cover around 40c range & SP will bounce to 80c range. Double bottomed after the 2019 run up so could head back to 40c again before breaking out above 200sma & holding above. Maybe we will get a decent announcement such as a license agreement soon causing SP to run up fast then back down to await US Fed pivot prior to getting above 200sma again.
Have to look ahead in moments like this at 2028 when BRN will have revenue growth, market share & NPAT with SP to suit.
BRN is currently similar to a pre-production miner. The product TAM/resource JORC has been confirmed as significant & the production plant is being constructed. The miners have offtake agreements similar to BRN having licensee's/partners prior to production revenue.
Numerous pre-revenue lithium miners currently heavily shorted similar to BRN. They are good quality companies as is BRN. It's just the nature of the cycle & the shorters taking advantage. I can understand shorting the lithium miners now due to the lithium price more than halving & they are still many months away from production revenue but BRN doesn't make sense.
Semiconductor companies such as Intel, AMD, Nvidia & Qualcomm are above or near 200sma on daily charts. The semiconductor ETF SMH has golden crossed & is above 200sma. Anything AI related is very hot at the moment except BRN. WBT was hot for a while until the shorters took notice & shorts have increased from nil to 2.67% in less than a month resulting in SP decline of 36.7%.
So revenue is what is currently required by BRN for SP to increase. And some assistance from rate cuts to increase DCF valuation.
BRN revenue should commence soon with more licence agreements & royalties. If the Renesas M85 chip has Akida IP revenue should commence next quarter. Renesas's MCU market competitors such as NXP & STM will be next as they will not want Renesas to dominate the AI MCU market alone. They are all using ARM IP for their chips & Akida integration has been validated.
With regard to US interest rates, the US Feds will need to get above CPI rate. CPI should decline to around 5% by May & US Fed rate will be at 5.25% with one more rate hike. Should inflation continue to decline to say 4.5% in July then the US Feds could commence rate cuts as they will be highly restrictive with monetary policy at 5.25%.
Could cut 0.5% to 4.75% & still be restrictive above the CPI rate of 4.5%. US CPI would have declined 50% YOY from 9.1% in June 2022 to 4.5% in July 2023. Another 50% decline YOY would bring it down to 2.25% by July 2024 allowing the US Feds to reduce interest rates to 2.25% being neutral or lower if they want to stimulate the economy. That would imply 3% of rate cuts from July 2023 to July 2024.
High interest rates reduce DCF valuations & low interest rates increase them.
Tricky market at the moment. Big sell off last hour yesterday in US resulting in red day. Has been mentioned to me whichever way the market goes the night of FMOC it will break out in opposite direction. Finished red so hopefully we see some green now. US Futures green for the time being.
RSI is currently very low on BRN daily chart similar to November & mid-February sell offs. RSI has also bottomed on weekly chart similar to April 2019. Has to bounce soon. SP might do the same as 2019 when it doubled from 4.2c in April to 10c intraday by May when US Feds paused. Got rejected by 200sma on daily chart in 2019 at first attempt. Daily chart has declining 200sma at 78.5c so it appears shorts will cover around 40c range & SP will bounce to 80c range. Double bottomed after the 2019 run up so could head back to 40c again before breaking out above 200sma & holding above. Maybe we will get a decent announcement such as a license agreement soon causing SP to run up fast then back down to await US Fed pivot prior to getting above 200sma again.
Have to look ahead in moments like this at 2028 when BRN will have revenue growth, market share & NPAT with SP to suit.