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Akoustis 1Q23 schedule and pre-midterm thoughts ?3

09:33 07-Nov-22


Akoustis has scheduled the report on its fiscal first quarter to be given on the morning of Monday, November 14th.  On average, 4 analysts expect a loss of 20 cents per share from $5.6M of revenue, increasing to $6.1M this quarter.  Although I think AKTS is undervalued for the long term, it has bounced off new lows recently, and I wouldn't be surprised to see those revisited surrounding the turn of the year.  Consequently, I will listen to and comment on management's forecasts, but not with great urgency.  I expect the report after the next one, in early May, to be of much more interest.

Ahead of tomorrow's midterms, markets appear to be anticipating a Republican Congress and viewing that as mildly good.  I've long expected this, but my underlying and more relevant stance now is that Washington is mostly ineffective and that states and corporations are the main drivers of change while that continues to be the case.  Furthermore, delays in official results are likely to make this week a political wash from a trading standpoint.

More broadly and importantly, American markets are acting as if they have already adjusted for a higher peak Fed rate and can now be sure of a return to a steady or declining regime starting mid to late next year.  I see this as more of a coin flip.  It could be argued that betting on that coin flip is a smart move since the Fed will certainly pause over that time, but I am equally certain that the market is not at all prepared for an extended double-digit rate scenario.  To wit, Henry Hub natural gas has regained $7.  Even for those who like to play short term macro moves, this is complicated by the CPI report on Thursday and the possibility of tax loss harvesting in December. 

However, if the peak lower peak rate scenario does play out next year, then it could be the time to act on some of my foreign equity ideas going into year-end.  Specifically, I may give some attention to Gorgoro, which has scheduled earnings for this Thursday and trades at less than a third of its IPO price.  It is expanding in India, where Renew has received a $1b loan to advance its ambitions and should be reporting progress soon.  For the record, I have eliminated Rolls Royce from consideration for the time being as developments seem to create a chicken and egg fuel situation for moving forward on nuclear.  In the meantime, select high yield like KNTK remains my top choice, along with sound volatility-loving investments like VIRT.