Is the SYME share price now too cheap to miss?

Rupert Hargreaves takes a look at the potential of the SYME share price over the next couple of years, considering its progress in 2022.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Stack of one pound coins falling over

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Whenever I have covered Supply@Me Capital (LSE: SYME) in the past, I have consistently concluded that the share price looks cheap compared to its trading history. 

However, over the past six months, the stock has continued to decline in value as the market gives the business the cold shoulder. 

Following these declines, I am starting to wonder if the stock is too cheap to pass up. Considering its market opportunity, I continue to believe the company has enormous potential. 

SYME share price outlook

Over the past year, the company has made tremendous progress on a number of fronts. The alternative finance specialist is working to progress agreements with parties worldwide.

According to its latest trading update, the group is working on completing the signing of a binding agreement with its first funder for the previously flagged inaugural Italian inventory monetisation transaction. 

At the same time, its inventory monetisation platform Trade Flow, which the group acquired in July, is on track to perform better than expected. 

Following a year of consolidation and marketing, Supply@Me Capital’s management seems to be optimistic about the year ahead. And I am as well.

The global trade financing market is worth hundreds of billions of dollars each year. And it is only growing.

The company is not the only corporation pursuing this business. Hence, competition is a risk, but it is working to produce a unique product and structure that could give it an edge over competitors. 

So what does this all mean for the SYME share price? Well, in theory, as the company’s fundamentals improve, the stock should track this improving performance. 

Rising losses 

Unfortunately, it could be some time before investors see any concrete results from the business. According to City analysts, the enterprise is expected to lose money for the next two years, at least. It seems likely that this uncertainty will continue to put the market off from investing in the company. 

I am also wary about investing in the business. While I have expressed optimism about its prospects in the past, it is taking longer than expected for the group to start earning returns for investors.

The longer it takes for the corporation to move into the black, the more money it will consume. In the past, the company has leaned heavily on shareholders to provide the funding to keep the lights on.

The number of shares in issue has increased from 9m to 27bn over the past six years as management has continually issued stock to raise money from investors. 

As such, I am not willing to invest in the company today. I think the SYME share price has potential. Still, until the group starts earning its keep, I believe the business will continue to struggle. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Rupert Hargreaves has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Up 26%, can the BT share price really push higher still?

The BT share price has surged on several catalysts in 2024, but there’s evidence to suggest that the stock could…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

What are the best dividend shares to buy right now?

As shares in B&M European Value Retail have fallen, the dividend yield has reached a 10-year high. Should investors be…

Read more »

Surprised Black girl holding teddy bear toy on Christmas
Investing Articles

My favourite FTSE 100 passive income stock that keeps the Christmas coffers full

The holiday season is expensive and can leave many consumers struggling to make ends meet. Here’s how I use a…

Read more »

Investing Articles

The latest growth forecasts suggest the Glencore share price will hit 555p!

Harvey Jones has been disappointed by the performance of the Glencore share price since he bought the commodity stock last…

Read more »

Dividend Shares

A closer look at the 11% dividend yield forecast for Phoenix Group shares

Phoenix Group shares have one of the highest dividend yields in the FTSE 100 index today. Could this be a…

Read more »

Investing Articles

If I’d put £25,000 into the FTSE 350 at the start of 2024, here’s how much I’d have today!

Many FTSE shares have rebounded this year as interest rates look set to keep heading lower and market appetite for…

Read more »

Investing Articles

Up 40%, but experts forecast the easyJet share price could soon hit 664p! Time to buy?

The easyJet share price has been flying lately and stock analysts are predicting more fun to come. But there's only…

Read more »

Storytelling image of a multiethnic senior couple in love - Elderly married couple dating outdoors, love emotions and feelings
Investing Articles

Worried about tax raids? Here’s how I’m targeting a £44,526 passive income with shares

Investing in a Self-Invested Personal Pension (SIPP) or Individual Savings Account (ISA) can supercharge one's passive income, says Royston Wild.

Read more »