Nxt-ID (NASDAQ: NXTD) skyrocketed in pre-market trading after it announced the commencement of testing for its WIFI notification device. Society is continuously striving to improve seniors’ indpendence, especially as our ageing population is growing at an unprecedented rate. Independency for seniors could include medical, physical, or financial independence. Thus, it should not surprise us that when NXTD produces a product that enables the elderly to notify their family when they need assistance, that the bulls come out to play.
Table of contents 1.Why is NXTD up? 2.NXTD's history 3.Is it too late to invest in NXTD?
Why is NXTD stock up?
Constantly checking up with your parents and or grandparents to make sure they are feeling 100% mentally and physically is often extremely stressful. Because sometimes families can be left out of the loop on the relatives current condition or arrive one day, and it might be too late. Reassurance is key in situations like these. However, it seems NXTD holds a promising solution.
NXTD announced they would begin testing their Personal Emergency Response System (PERS). NXTD’s PERS allows seniors to “alert friends and family via text messaging if they need medical assistance with the touch of a button on a wearable pendant“. The alerts are sent and received via the existing Wi-Fi network on smart devices. However, the line of communication does not end there. Once the senior citizen alerts their relatives the relatives can add a local respondent to the call, determining whether the user needs medical assistance. Also, the PERS involves no monthly fees, increasing the attractiveness of the device.
Furthermore, NXTD just began in-field testing, which takes around 30-45 days. Once the testing results give the green light NXTD will begin selling the monitoring device directly to the consumer, assisted living facilities, and medical device distributors. The pathway to market approval reassures both investors of future revenue upside , and relatives of future peace of mind. Especially in time where COVID-19 is causing unfamiliar family arrangements, PERS should provide many families and assisted living places with some comfort. Hence, the bulls rallied behind NXTD today, causing a 75% increase in pre-market (at the time of writing).
History of NXTD trading on the NASDAQ and the current position for Long Term Shareholders?
Since market inception in August 2013, the NXTD stock price has seen a significant downward trend. From heights of $56 in December 2013 to ultimately bottoming out at $0.29 in March this year as COVID-19 gripped the markets. The stock is set to hit $0.93 at market open this morning, a YTD all-time high. NXTD found a Pre-COVID 19 equilibrium price at $1.20 before investors fled market-wide in one of the worst sell-offs in market history. Since the sell-off, opportunistic investors reaped the rewards of a market recovery with NXTD making a 50%+ gain over the past 3 months.
The 5Y Beta for NXTD is not so flash – currently sitting at -0.11 alongside current Market Cap of 16.074 million (subject to change this morning). Now speaking fundamentals, the company has along way to go to deliver results to Long Term shareholders. However, a current trend shows a large portion of investors hold for 5 days or less per transaction. On countless occasions, we have seen investors flocking to inflated stocks with crippled financials or poor business direction to make a quick profit. After analysing the US market trends over the past 6 months, I cannot account for a day whereby speculators have not pumped a stock 40% or higher.
This volatility is only temporary. Thereofre, every investor must have a plan when entering any extreme fluctuation period of a stock’s life cycle. As NXTD surges today and possibly tomorrow it is wise to remember business fundamentals have already been tossed out the window. From my investment experience, I would prefer to take short-term losses on a company with great fundamentals as a safety net. If you miss the window of profit and the stock collapses, you know you are holding a great company that will continue to thrive for years to come. We leave it to you to decide whether NXTD holds the fundamentals to see growth for years to come.
Should you invest in NXTD – or is it too late?
Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area
Short answer: Yes a short-term or long-term investment could potentially pay off but the timing must be impeccable (opinion not advice).
After reading today’s price-sensitive announcement, some investors may be eager to invest and ride the growing hype. Especially, as we often see increased buying activity in the opening minutes as new investors become aware of the news. However, with the current turbulence in the market we should see investors cash in on their profits in today’s trading day. Thus, if your timing is off you could invest at the highest point, leaving your trade at the top on the mountain in hindsight. Also, because the announcement is about testing, with revenue not coming in for a few weeks it seems the event is priced in. Therefore, if you do decide to ride the short term investment, it is usually best to wait for a pullback during the trading day, to capitalise on the re-insurgence of bulls. (opinion not advice)
In light of the risks of a short term investment, a long-term investment might be the favourable option. (opinion not advice) Cementing your position will be the challenge. You could enter on today’s potential sell-off or decide to wait a few more weeks, if you expect more bearish activity. Nonetheless the long-term could pay off (opinion not advice). Especially if we use the bullish movement off today’s announcement as a level for future PERS updates. However, investors must understand that past performance is not a future indicator of future performance. Thus, the PERS’ market market update down the track might not mirror the explosive growth we saw today.
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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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Written by Patrick McLoughlin, and Tyger Fitzpatrick, Senior Manager, and Founder of YIG