With the volatility of Supply@Me Capital’s share price (LON: SYME) somewhat stabilising as of late, many investors may be asking if now is a good time to buy Supply@Me Capital (SYME) shares?
We think the answer is resounding yes, if you are looking for a promising growth story with the potential for exponential returns in the mid-long term – SYME could be a very worthy addition to your diversified portfolio.
When looking for exponential returns from a share in the long-term, it generally needs to have some key ingredients in its foundations and SYME appears to have them in abundance as now discuss:
Disruptive business model; introducing a new asset class for investors
SYME has a disruptive business model, its ability for businesses to effectively monetize their inventory that isn’t required in the short/mid-term is a new business model and has opened up a new asset class for institutional investors.
Institutional investors are very prominent in the wider asset-based lending space – SYME’s business model is just giving them a new type of asset to effectively lend against in a new and novel way.
While it may sound like an alien concept to the average investor and the associated terminology complex, the underlying mechanics of what SYME is doing through its fintech platform are sound.
Scalable business model; capable of going across borders with ease
For exponential growth to be achieved for any business, it simply has to be scalable – SYME is not just scalable nationally but it is also scalable internationally.
As a platform, with a light footprint, it can effectively reach new customers internationally with ease and generate rapid and exponential growth.
If we look historically at some of the best growth stories on the stock markets, scalability is key to that – Ocado, Boohoo and even Amazon – being able to scale a business locally but internationally is a crucial aspect for enhanced potential returns and big valuations.
Economies of scale; growth should translate into immediate profits
Management has already spoken about the fact that its generating positive cash flow at this early stage. The potential underlying profits for the firm are strong.
As a fintech platform with low-operating costs and a likely low global headcount even with expansion, the business can start to generate economies of scale fairly soon, generating incremental profit from each client that it helps to support.
Sound strategy; setting the foundations for commercial delivery
SYME itself has been very active in highlighting the moves it is making to deliver commercial traction within its business.
We can see that management is thinking ahead and giving the business the best possible foundation for growth.
Three funding options for inventory monetization including the establishment of a captive bank and pressing ahead to ensure initial reach markets in the US, UK, Europe and the Middle East are just some of the examples here of its strategy in play which will help to remove bottlenecks and grow faster.
It is also reassuring that the management is highly visible and has invested significantly in the business itself.
Domino effect; one good client leads to a snowball effect of many others
SYME is offering a new concept to clients and institutional investors despite the similarities with the wider asset based lending industry.
Potential clients will be asking does this work? How efficient will it be for me? Similarly institutional investors will be asking how can I be sure I will generate a return? How safe is it? SYME appears to have cracked the latter part with a big-name in the alternative investment space agreeing to provide funding through the captive bank!
The fact is that once a business model like this becomes proven and established, an element of ‘me too’ happens and it can snowball in terms of clients and volume put through.
Should this happen, it will also correlate with a snowball effect for the share price of SYME as well.
Therefore it is for all the above reasons we think that SYME has the potential to generate exponential returns for investors and could be a very worthwhile investment as part of a diversified and balanced portfolio.
This is a personal opinion piece and for information purposes only. It is not a recommendation to buy or sell or shares in SYME.