It can be difficult to buy such stocks Argo blockchain (London Stock Exchange: ARB) When it drops. If I like stocks, I do want to buy them at a cheaper price. But if it will fall further next week or next month, I don’t want to enter.But ARB’s stock price has stable In the past few weeks, so I wonder if emotions will turn positive.
Having said that, the idea of Argo Blockchain’s stability must be seen in context. Prices may fall 65% from their peak in March. But in the past 12 months, it has still risen by more than 1,300%. This is what I call growth stocks.
All this corresponds to the price of Bitcoin, which has been stable at a level of around US$35,000 for the past month or so. It seems inevitable that Argo will follow the ups and downs of cryptocurrencies.
By the way, when looking up the current Bitcoin price, I found a title claiming that it is “Prepare for a shock of $1.5 billion in July“Oh, there is another saying that it will develop rapidly because it has something to do with Elon Musk and Harry Potter. I mentioned these not to be a joke, but to remind myself of the strange factors driving the price of cryptocurrencies.
What is the margin of encryption security?
Most importantly, none of us really understand the direction of cryptocurrency prices. But even if we know that we don’t know, is there an ARB stock price that I will buy? Yes, it might be, even if I haven’t figured out what it might be.
I like to compare crypto miners with gold miners. Although I will not buy gold itself, I will buy shares of gold mines. I must be sure that my miners can continue to profit within the possible future gold price range. So from this perspective, how does Argo Blockchain stack up?
Newest Update The company told us that it mined 167 Bitcoins or Bitcoin equivalents (BTC) in June, up from 166 in May. I think this is growth, just. Mining revenue in June was 4.36 million pounds. Argo’s mining profit margin is slightly down from 82% in May, but 78% still indicates that there is a safety buffer to some extent. But are there enough buffers to make current valuations attractive?
ARB stock price valuation
The market value of Argo is currently 477 million pounds. If we calculate June revenue at 52 million pounds annually, then the company’s valuation is about 9 times its value. On an asset basis, Argo’s value is approximately 11 times its 1,268 BTC held at the end of June. None of these numbers make me want to buy.
But one thing may boost ARB’s stock price. The company said it is exploring the possibility of a secondary listing on Nasdaq. There are no details yet, and it may or may not happen. But listing on NASDAQ will definitely attract the attention of more American investors.
But the most important thing for me is that the future value of Argo Blockchain depends on factors that I cannot quantify. So it does not suit me.
Alan Oscroft There is no position in any of the above-mentioned shares. The Motley Fool UK has no position in any of the aforementioned stocks. The views expressed by the companies mentioned in this article are those of the author and may therefore differ from the official recommendations we made in subscription services such as Share Advisor, Hidden Winners and Pro. At The Motley Fool, we believe that taking into account a variety of different insights, We are better investors.