Welcome back from Easter holiday or if you are still on hols,...

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    Welcome back from Easter holiday or if you are still on hols, all the more better.


    Today’s Opportunity stock is little known Tinybeans Group Limited (ASX: TNY). TNY is a mobile and web-based technology platform that provides parents with one safe space to capture and share their children’s life stories with family. Tinybeans offers an experience without the distractions or privacy concerns that arise on other platforms (like Facebook) when sharing a child’s memories. Tinybeans generates revenue from advertising from brands, premium subscriptions and printed products.

    TNY is akin to Facebook (FB) but because TNY is an invitation only service, it does not have the security and privacy issues that FB has. And that itself is compelling, and through word of mouth TNY has achieved a month active user (MAU) base of 1.14m (registered users >3m) across 200 countries (but predominantly the US), a doubling of users in 2 years. Trading at just under $20m market cap, its annualised revenues is close to $4m, with its latest quarterly revenue results showing a 143% growth from a similar quarter a year ago. So this company has already received business growth traction, and receiving quarter-on-quarter cashflow growth with latest quarter showing $1m in cash receipts. And unlike many other tech microcaps, TNY is very prudent in its cash burn , focussing on a pathway to profitability – its cash burn is reducing quarter-on-quarter while its cash receipts are growing – a very rare case if you ask me. It is projecting a cash burn of $300-400k next quarter and a cashflow break even by the end of the year. Latest quarter shows a cashflow deficit of just $550k and it has $1.4m cash in hand.

    TNY business model is globally scalable and does not require much additional/incremental operating costs for every single new revenue dollar it gets – and for this reason, it is able to scale up profitability quickly provided it continues growing its revenues. But penetration rate into the US is still fairly low at 10% which provides considerable growth opportunity for the company. Valuation wise is reasonable as its market cap/rev is just under 5x. As this is still an early stage company, validated and ramping up growth (Phase 2), it is a potential multi-bagger as time progresses.
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