By Tom Linzmeier, editor LivingOffTheMarket.com
Past – Present – Future.
Valuations in the market are drive by Investor Perception. The more fear there is in the market the more Investors need reassurance, the more investors place a higher value on historical past performance for comfort. As fear of the market subsides, we see stock price action move to real time reaction to news and events. When the market has no fear and is in fact FOMO, then the market participants look into the future and buy, hope and expectation. This is where the saying, ‘the market climbs a wall of worry” comes from. When there is nothing to fear, the market is overvalued and holds the highest price risk. The higher the market’s state of fear, the lower the price risk in the market.
- The market has been in the Hope and Expectation phase for a while in many sectors. Cathie Wood’s ARK ETFs are an example. So is the Redditt crowd activity.
- On the other hand, Gold and Silver Miners are in the rearview mirror (past phase). Valuations are very low; cash flow and earnings are very strong as are balance sheets. Everyone knows the value factor in Gold & Silver miners is very attractive, but few care.
- MKTY is in the middle phase. Revenue is about to grow rapidly. Q4 is the first full quarter of the new Data Center facility for Crypto. Three megawatts to 25 megawatts capicity by October 2021, followed by an almost immediate doubling again of capicity in megawatts by year-end 2021. Three megawatts to 50 megawatts in about four months. If the news story below is correct someone (below) is saying, 50 to 300 megawatts in the pipeline in eighteen months. Now that’s growth for a small company who did $9 million profitably in revenue for the year 2020. In Q1 2021 MKTY is projecting about $8 million in revenue – for the quarter. For perspective – one average megawatt is enough to power 796.36 Northwest, USA homes for a year. Yes, as mentioned in the article, all MKTY’s power contracts are Alt-energy.
EcoChain to Benefit from China’s “Great Unplugging” from Crypto
Yahoo finance July 28, 2021
Excerpt
Mining Capacity is Increasing to 50MW by Year’s End
EcoChain Inc. is a 100% owned subsidiary of Mechanical Tech (MKTY) green crypto mining company. Their goal is to develop a network of cryptocurrency mining operations powered by 100% renewable energy. The first link in that chain is a hydroelectric dam in the Columbia River Basin. The company is also actively looking for other investment opportunities in the renewable energy sector.
The “Chain” is ramping up 25MW of crypto mining capacity online, with plans to increase that to 50MW by years end. Their pipeline could get them to 300MW in the next 18 months, all from green energy sources. Uptime on existing facilities is currently at 83%, which is intentional because it keeps their kilowatt hour rate at just 2.3 cents per hour.
As for profitability, the company has already made back its investment on their TNT crypto mining facility in under 12 months of operation and anticipates solid revenue through the remainder of 2021, even with crypto pricing currently at its lower rate. Another facility, called Anaconda, will be fully deployed in October, and a third (Python) is being stocked with new equipment.
LOTM is very positive on MKTY regardless of the market phase. In the short-term, technical analysis and emotions rule the market day. In the long-run, Earnings and Cash Flow rule.
Long-term Performance results for MKTY are now concentrated in two years or less time lime. We consider MKTY a buy under $8.00 and an aggressive Buy under $7.00.
We have no upside price target at this time. Our expectation is a double to triple the current price over the next twenty-four months. We think the stock is cheap to what the company builds in the 12 to 24 month timeline.
Most recent Video Update from EcoChain Mining linked here.
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