CLIP the turtle stock About CLIP
Microcap stocks are always a fascinating challenge...to pick the one that will grow and NOT go bust. Such was SCR (The Score) back in the day, when I watched it soar from 15 cents to $4.40 on PENN buyout. And now here's CLIP Money, up from a frail 15 cents to the low .20s - on trivial trading volumes. It remains unloved by the masses, and likely will remain unnoticed as it steadily grows its client base month after month. Because after all, who is interested in a company devoted to improved merchant cash management? Like, who buys goods with cash these days?
Well, it turns out plenty of people (15%?) in North America still DO pay with cash and likely over 10% still will in 2030. So merchants need to deal with it - meaning trudging to bank branches to use the cash depository - or using the time saving handy green CLIP machine.
With only publicly available knowledge, I can only guess at the CLIP big picture spreadsheet, but imagine it shows not a hockey stick, but a longgg arrow gradually upward in terms of revenue growth, and flatlining costs per machine user as the costs get shared by more and more mall merchant users.
In terms of a moat, who needs one? This business is not sexy like AI or Crypto or others that attract investors and headlines. No, this is the turtle of Fintech in my mind, and unlikely to attract competitors. It's a business with big startup costs more suited to patient capital, like the toll highway #407.
But eventually the revenues will catch up with, and exceed the costs, and then it's Nirvana thereafter...perhaps even a dividend stock. So that's the net of it. The newly announced just-in-time $2.8m cash infusion will carry CLIP forward another Q (whew!), and the time to acquire a long term investor with the patient capital that the spreadsheet forecasts that is still needed to reach the break even point.
In terms of pleasant surprises by 2025, what are the possibilities, beyond being bought out? The CLIP company might tap into a new side business with the vast amounts of merchant data its machines acquire (e.g. CRE companies would likely love that info). Or banks might get out of the expensive cash depository line of business en masse.
I will continue to hold it in my stock portfolio, untraded, next to a Bell or bank stock, for years to come. I don't expect a .15 to $4.40 surge like with SCR - but rather, a decent annualized 20-25% return (over 5 years) for the great risk I started with when first buying the stock.