Is Tinybeans (ASX:TNY) the Next Tech Growth Story?
Jason McIntosh discusses why Tinybeans is an ASX small cap with loads of potential. This interview appeared on Ausbiz on 25 February, 2021.
Host: Jason, a stock you’re looking at is Tinybeans Ltd [ASX:TNY]. We recently spoke to Tinybeans CEO Eddie Geller. Tell us what you see with this stock.
Jason: This is a really interesting story. Tinybeans recently turned up in my algorithmic scans and the share price appears to be gathering momentum. Just a bit of background to start with, as Tinybeans is probably an obscure stock for most people. It only has a market cap of around $80 million.
Tinybeans is an online social app for parents with young kids. The idea is that you take photos of your kid’s everyday memories, upload them onto the app, and then share them with family and friends in a safe environment. The photos don’t go onto a newsfeed, it's just for the people you allocate. So it’s essentially an online photo journal.
The company is making good progress. It was Apple's app of the day twice, in 2019 and 2020, so its brand awareness is gaining traction.
Tinybeans has a subscription based model. A lot of companies are adopting these subscription models, and they often work very well for businesses with a good platform that people want to come back to. If you can get this right, you've got a valuable asset.
So what Tinybeans are saying is that 92% of people are resubscribing. I think this shows there's a real need for its product, and that it’s filling a need in the market. This really seems like the family-friendly online option for many people.
Tinybeans is cash flow positive, and growth is impressive. It’s just seen a 157% jump in annual revenue. This off a small base, but nonetheless, it’s a lot of growth. The average monthly user base grew 21% in the last three months.
I think the next big thing for this company is getting into the US market. They announced this week that their shares have just been given approval for electronic clearing and settlement in the US. This means US investors can buy the stock in American dollars. They can also trade in their own timezone. The company is saying this is going to improve liquidity, broaden the shareholder base, and expose the company to US capital markets.
Tinybeans is a small cap with a very interesting story. It’s one of those companies that, over the next 2-3 years, could rise three or fourfold. You just never know with these ones. The risk/reward looks good to me. While it may go nowhere, I see this as a numbers game. It’s about looking for stocks with interesting stories and with a lot of potential. You then let the good ones run and cut the ones that don’t work. I think Tinybeans is well worth a closer look.
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I'm Jason McIntosh, the creator of Motion Trader. My career began in 1991 on the trading floor at Bankers Trust. Nowadays, I trade my own systems from home in Sydney.
Motion Trader is for investors who value robust analysis, data driven entry and exit signals, commentary, and education. I use engineered algorithms to identify when to buy and sell ASX stocks. No biases or guesswork, just data driven signals.