Green Dot $GDOT downtrend but upside potential
Green Dot is not-quite a bank, not-quite a financial technology company Green Dot is feeling the burn of the market right now, but is a fundamentally valuable ticker to watch.
Research
Risk Management
Technical Analysis
Summary
I believe the $GDOT price trend could break its current support around $44.50 and, if that occurs, fall to the next support level of $38 (June 2020). That $38 figure is hopefully resonating with you if you have read all the way through this massive volume since our savvy man on the inside and hedge fund manager, Jeffrey Osher, loaded up 75K shares at about that price. If the $GDOT price drops to the $38 range I might be interested in a position with targets at $50.50, $54.50, and $58.50 on the way back up.
*Data in the "Research" section sourced from TipRanks, MorningStar, WhaleWisdom, OpenInsider, and Seeking Alpha
Research
- TipRanks median price from Analysts who have commented within the last 6 months is $55.50, closed Friday Apr-23, 2021 at $44.43, 25% upside potential from last price
- $GDOT price has been steadily drifting down since Jan highs at $60
- Short % of float per Yahoo is 6%, these are smart money managers because price is going down
- Most top shareholders are index institutions (BlackRock, Vanguard, State Street 22M shares combined)
- One top shareholder outlier, Starboard Value LP, owns 5M shares and continued to acquire in Q4 2020
- (Con) The "underserved" and "underbanked" demo they are servicing faces competition from Chime and Simple
- (Con) The fintech transaction business is also hotly contested, think Visa etc.
- (Con) Does not pay a dividend so they fail my "ok boomer" test
- (Pro) Board member Jeffrey Osher is their most active insider and runs his own hedge fund, Osher bought 75K shares in May 2020 (post-COVID, savvy investor buying the dip) around $35 to $37.50
- (Pro) Osher, who we have established is a savvy investor, sold 300K shares in Feb/Mar 2021 at $50 to $55
- (Pro) Green Dot's payment processing technology underpins Apple Pay and Uber's driver payments system
- (Pro and Con) Green Dot's secured debit card biz through Walmart accounts for about a quarter of their revenue, it's a great place for their underserved demo and makes them a valuable acquisition opportunity for Walmart, but it's also a big risk if Walmart decides to cut them out
Risk Management
- Clearly the $GDOT trend does not track the financial index $XFI or the regional bank index $KRE
- Clearly the $GDOT trend does not track the tech index $QQQ either
- $GDOT could offer your portfolio a hedge against overweight Tech or Financial holdings
Technical Analysis
- $GDOT price is below the 200-Day SMA
- RSI at 39
- MACD histograms are negative, but slowing, divergence on the last lows where price reaches a new low but MACD does not
- -DI line is above the +DI line signaling downtrend
Summary
I believe the $GDOT price trend could break its current support around $44.50 and, if that occurs, fall to the next support level of $38 (June 2020). That $38 figure is hopefully resonating with you if you have read all the way through this massive volume since our savvy man on the inside and hedge fund manager, Jeffrey Osher, loaded up 75K shares at about that price. If the $GDOT price drops to the $38 range I might be interested in a position with targets at $50.50, $54.50, and $58.50 on the way back up.
*Data in the "Research" section sourced from TipRanks, MorningStar, WhaleWisdom, OpenInsider, and Seeking Alpha