Ticker Reports for November 25th
Abacus Life's CEO on Cracking the Code of Longevity Returns
Abacus Life, Inc. (NASDAQ: ABL) is a global alternative asset manager specializing in a unique niche within the financial markets. The company acquires and manages life insurance policies.
The company's core mission is to generate financial returns for investors and educate consumers on the often-overlooked value inherent in their life insurance policies. This dual focus positions Abacus Life at the intersection of financial innovation and consumer empowerment.
Life Insurance as an Undervalued Asset
The life insurance industry is a $13 trillion market sector that presents a compelling investment opportunity due to a significant and often overlooked market inefficiency. In a recent interview with MarketBeat’s Bridget Bennett, CEO Jay Jackson revealed this inefficiency stems from the fact that: "90% of those policies, or nine out of ten, never pay a claim to the beneficiaries." This statement underscores the inefficiency within the current system. He goes on to explain that this isn't a result of wrongdoing by insurance companies but rather a widespread misunderstanding of life insurance as a tangible asset that is similar to owning a home.
Many policyholders are unaware of the potential cash value locked within their policies, so they lapse on payments and forfeit a significant financial resource. This creates a market where policies can be acquired at a discount to their intrinsic value. Abacus Life capitalizes on this opportunity by purchasing these undervalued policies, providing liquidity to policyholders while simultaneously creating an asset class for investors. This process bridges the gap between the perceived and actual value of life insurance policies.
Abacus Life's Strategic Approach
Abacus Life operates on a distinctive business model centered around acquiring, managing, and monetizing life insurance policies often perceived as undervalued. The company employs a data-driven approach, leveraging proprietary actuarial technology and lifespan data to assess the market value of these policies. This process involves re-underwriting policyholders by obtaining updated medical information, which allows for a more accurate prediction of lifespan and informs the valuation process.
Factors considered include the policyholder's updated health status, age, and remaining premium payments. This data-driven methodology sets Abacus Life apart in the life settlement industry. As CEO Jay Jackson explains, "We are the only publicly traded company in our entire industry. There are other companies in our business that focus on different areas of the origination piece, but we're the only company that's taken it and gone the step further and said, 'Let's make this available and transparent and validate that everybody can now look at our assets and our balance sheet and potentially invest in it.'" This transparency, coupled with its unique public market presence, provides investors with a distinct opportunity to participate in this specialized market sector.
Further amplifying Abacus Life's strategic advantage is its proprietary technology platform, ABL Tech. This platform extends the company's reach beyond individual policy acquisitions by providing data-driven financial planning services to institutions. ABL Tech offers sophisticated data analysis and longevity forecasting, empowering organizations like pension funds and government agencies to more effectively manage their long-term financial obligations. This diversification of services not only creates additional revenue streams for Abacus Life but also positions the company as a technology leader within the broader longevity-linked financial planning market.
Financial Performance: A History of Consistent Growth
Abacus Life has demonstrated impressive financial performance over its two decades of operation. This consistency is particularly remarkable considering the volatility seen in broader financial markets. The company has consistently achieved mid-teen year-over-year growth rates and maintained a return on equity surpassing 18%, with profit margins exceeding 50%. To emphasize the rarity of these results, Jackson made a compelling statement: "Consider all the companies that trade on the Nasdaq…It's just us. We're the only company on all of Nasdaq that can state that." This highlights the remarkable financial health and consistent profitability of Abacus Life in its niche market.
Recently, Abacus Life’s earnings report for the third quarter of fiscal year 2024 (Q3 FY2024) significantly exceeded analyst expectations. The company reported earnings per share (EPS) of $0.20, beating the consensus estimate of $0.14 by $0.06 and posting revenue of $28.15 million, surpassing the estimated $26.08 million.
Despite this positive financial performance, it's crucial to acknowledge the presence of Abacus Life’s short interest. The recently reported increase of 14.7% in short interest represents a sector of the market betting against the continued success of Abacus Life.
Looking Ahead: A Vast and Expanding Market
Abacus Life's long-term growth prospects remain considerable. The immense size of the life insurance market, coupled with the company’s pioneering approach to asset management, presents a significant opportunity. The growing awareness of life insurance as a liquid asset and the expansion of ABL Tech into new financial applications further enhance this outlook. The pro-consumer nature of Abacus Life's business, which results in payouts to policyholders who are all largely over the age of 70, aligns positively with regulatory objectives. Jackson’s positive outlook captures the company’s potential: “Frankly, this is a pro-consumer transaction. So the regulators…really like this transaction…we have a lot of run room still left to go.”
A Unique Opportunity in a Growing Market
Abacus Life presents a unique investment opportunity for those seeking exposure to a dynamic and growing sector of the financial markets. The company’s solid financial performance, its innovative business model, its strong leadership position, and the substantial addressable market all contribute to its appeal. Abacus Life’s focus on improving the quality of life for seniors adds a compelling social impact angle. Ultimately, Abacus Life's future success will depend on its continued ability to execute its strategic initiatives, effectively manage risks, and capitalize on the growing awareness of its innovative approach to longevity-based financial products.
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Elon Musk and Trump Push for Self-Driving Cars: 3 Stocks to Gain
With the Trump administration taking over in January 2025, there has been much speculation about forthcoming changes, trends, and themes. With Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk firmly embedded in Trump’s inner circle, there’s been speculation that self-driving or autonomous cars will see an accelerated regulatory framework paving the way for Robotaxis and self-driving cars hitting the roads sooner than anticipated. If that turns out to be the case, here are three stocks that will benefit from the widespread deployment of autonomous vehicles.
Mobileye: Preparing For an Autonomous Vehicle World
Leading advanced driver assistance system (ADAS) and autonomous technology company Mobileye Global Inc. (NASDAQ: MBLY) would be a key beneficiary of the deployment of autonomous vehicles. The company makes ADAS system-on-a-chip (SoC) systems that are already used in over 130 million vehicles worldwide. It operates in the auto/tires/trucks sector.
Their proprietary EyeQ SoCs use cameras to interpret and navigate the environment rather than radio detection and ranging (radar) or light detection and ranging (LiDAR). EyeQ systems are used to provide enhanced safety and driver assistance with functions like adaptive cruise control (ACC), lane keep assist and lane departure warning (LDW), parking assist, automatic emergency braking (AEB), traffic sign recognition (TSR), and forward collision warnings (FCW) which alerts the driver of a potential collision with another car or obstacle ahead.
Mobileye's SuperVision: The Bridge to Autonomous Driving
While earlier EyeQ focused primarily on safety features, Mobileye’s EyeQ SuperVision takes it to the next level, focusing on advanced supervised autonomous hands-free driving. It's a bridge between semi-autonomous vehicles, which are deemed level 2 systems, and fully autonomous vehicles, which are level 5. SuperVision utilized cameras, sensors, rada,r and LiDAR for 360-degree perception. SuperVision systems generate more revenue and have higher margins. The company is deploying EyeQ5-based SuperVision systems in select ZEEKR Intelligent Technology Holding Ltd. (NYSE: ZK) electric vehicles (EVs) in China.
Mobileye Partners With Volkswagen for AVs
Mobileye has been testing its Mobility-as-a-Service (MaaS) Robotaxi product with partner Volkswagen AG (OTCMKTS: VWAGY) Commercial Vehicles in Austin, Texas and Hamburg, Germany, for several years. On March 20, 2024, Volkswagen ADMT announced an agreement with Mobileye on a fleet of autonomous vehicles (Avs) at scale using its ID.Buzz.Avs for mobility and transport services in Europe and the USA. Volkswagen is the first automaker to develop autonomous Level 4 service vehicles for large-scale production.
Ouster: 3D LiDAR for More Than Automotive, But Critical for Autonomous Driving
As a leading provider of digital LiDAR technology, Ouster Inc. (NYSE: OUST) sensors enable high-resolution and 3D mapping.
LiDAR is a remote sensing technology that utilizes laser pulses to create precision 3D maps of the surrounding environment by emitting rapid laser pulses and measuring the time for each pulse to return.
LiDAR Applications Beyond Automotive
Ouster sells its REV7 sensors that are used for applications ranging from warehouse and factory robotics and automation, mapping and surveying with drones and smart infrastructure deployment like smart cities. Ouster is also partnered with autonomous driving and Robotaxi development players like Waymo and Cruise, owned by General Motors Co. (NYSE: GM).
Generating Meaningful Revenue Growth in Robotics and Smart Cities
Ouster has been growing in non-automotive industries. The company reported Q3 2024 revenue of $28 million, up 26% YoY. GAAP gross margin rose over 2,400 bps to 38%, up from 14% in the year-ago period. Net loss was $26 million, down from $35 million last year. Ouster still has $154 million in cash and cash equivalents. Ouster shipped over 3,900 sensors in the quarter and over 100,000 sensors to date. The company expects Q4 revenue to range from $29 million to $31 million.
Ouster CEO Angus Pacala commented, “I’m proud of our third quarter results, which set new record levels of revenue, gross margin, and adjusted EBITDA. Our customers continue to adopt our REV7 sensors to harness enhanced range, accuracy, and precision. More customers are moving into production, with robotics and smart infrastructure deals representing the largest wins during the quarter.”
Pacala also noted that the company has focused on growing its installed software base and achieving its highest level of software-attached sales to date. Revenue was primarily driven by customers in the robotics and smart infrastructure verticals, which included use cases like mapping, perimeter security, and last-mile delivery.
Robotaxis Already Deployed on the Las Vegas Strip
Ouster has strategic partnerships like with Motional Inc., a leader in driverless technology. Motional has selected Ouster to outfit its Hyundai IONIQ-5 Robotaxis with Alpha Prime VLS-128 sensors through 2026, which are being used on the Las Vegas Strip in Las Vegas, Nevada.
Aurora Innovation: The Vehicle Agnostic Self-Driving System
Self-driving vehicle technology company Aurora Innovation Inc. (NASDAQ: AUR) was born from impressive pedigrees in autonomous driving. Its founders come from Alphabet Inc. (NASDAQ: GOOGL), Google's self-driving team, Tesla's Autopilot team, and Uber Technologies Inc. (NYSE: UBER) autonomous driving team. The company develops a complete self-driving system called Aurora Driver, which can be integrated into AVs to enable autonomous driving. The company raised $483 million to extend its runway into 2026. Aurora is partnered with Toyota Motor Co. (NYSE: TM), and OEMs include Peterbilt, Volvo, Kenworth, and Paccar Inc. (NASDAQ: PCAR).
Launching Aurora Driver in April 2025
Aurora Driver is comprised of a hardware kit that includes a computer and a suite of sensors (including radar, LiDAR and cameras) combined with a state-of-the-art perception, mapping, motion planning and simulation software automation stack. Aurora Driver for freight is coming to Texas. Aurora Driver will launch by deploying up to 10 driverless trucks, upon starting with one self-driving truck in commercial operations in April 2025. The second half of 2025 will focus on adding new lanes and expanding product capabilities and capacity to tend trucks by year's end.
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Discover the 3 Best Performing Stocks That Went Public in 2024
Investing in companies in their first year of being publicly traded can be an exciting and perilous proposition. It may take time for enough information to come out about a new stock before the market can gather a strong sense of its actual value, leading to volatility. Shares can see large upticks as well as large declines as investors fill in the picture around the company more and more. Below, I’ll detail three stocks that have been on the right side of this equation, rewarding those who got in early.
Reddit Takes the Market by Storm
Reddit (NYSE: RDDT) has provided a total return of over 300% since the company had its initial public offering (IPO) on Mar. 20. The communication services business revolves around Reddit.com, which has over 100,000 discussion boards on various topics. Users call each discussion board a subreddit. Users can read and post on these subreddits, sharing and taking in information that interests them. The company primarily generates revenue from selling advertisements on these subreddits.
Although there is little that is proprietary or groundbreaking about Reddit and its business model, the site is thriving. For many, it has become a de facto source when looking for informal or personal information on the internet. For example, in the "r/BeyondTheBump" subreddit, users share tips on transitioning from pregnancy to parenthood. The platform has become extremely popular, with over 250 million unique users each week. With that number of users, it's no wonder advertisers want to buy space on it. Additionally, each subreddit's niche lets companies target ads toward their most receptive customers.
The company has exhibited extremely strong and accelerating revenue growth. In Q1, revenue grew by 48% from the previous year. In Q3, the figure hit 68%. The company has also been handily beating estimates on revenue.
Amer Sports: Sporting Goods Company from Finland Jumps on the Scene
Amer Sports (NYSE: AS) has returned an astounding +500% since going public on Mar. 7. The company makes sportswear and sports equipment. Its three segments are Technical Apparel, Outdoor Performance, and Ball & Racquet Sports. Amer owns and operates well-known brands like Arc’teryx, Salomon, Wilson, and Louisville Slugger. Shares jumped an incredible 235% on their first day. Only institutional investors had access then, but shares have continued to climb throughout the year.
Beating estimates on revenue and recording a positive adjusted profit in three out of four quarters in 2024 has raised sentiment around the firm. The technical apparel segment, led by Arc’teryx, has been particularly impressive. The segment has grown revenues by over 30% in each quarter from the previous year.
Even more impressive is the growth in revenues within certain geographies. In Greater China and the Asia Pacific regions, revenue grew by 56% and 47%, respectively, last quarter. The company has also been growing its direct-to-consumer channel revenue at around 40%. This helps increase margins by cutting out wholesaler middlemen. In Q3, adjusted gross margin and adjusted operating margin both rose several hundred basis points from last year.
Nano Immediately Starts Riding the Small Modular Reactor Wave
As of the Friday, Nov. 22 close, Nano Nuclear (NASDAQ: NNE) had risen an unbelievable 740% since going public back in May. However, by 12:20 EST on Nov. 25, shares dropped 23%, bringing the yearly total return down to a still very impressive 540%. Like Nano, NuScale Power’s (NYSE: SMR) shares have soared this year. This is due to the potential of the small modular reactors (SMRs) these companies are working to commercialize. The proliferation of AI has created a need for data centers to receive reliable and clean electricity, which is exactly the type of electricity that nuclear reactors can provide.
However, there is one big problem: traditional nuclear reactors are extremely expensive and time-consuming to build. Analysts hope that SMRs can lower the initial cost and reduce the timeline for building nuclear energy capacity. However, this technology has yet to prove economical, and so far, no SMRs are operating in the United States. This results in Nano having $0 in revenue.
Nano is still very early in its journey to having a reactor built and in use. In 2024, it filed patent applications and is discussing its reactor designs with the Nuclear Regulatory Commission. In August, it purchased a 14,000 sq. ft. facility to serve as its nuclear technology headquarters. The company is also working to become a player in nuclear fuel transportation and nuclear consulting services.
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