Liberty Defense Holdings Ltd. (LDDFF)

[Acamar Journal]

All $ amounts in C$:

Laurentian Bank issued a research report in September 2019 on Liberty, where they put a 12 month price target on Liberty at $ 1.40. That makes it a 5.6 bagger, if it gets there. That's pretty compelling in my book.

The investors who got in earlier at much higher prices in the last financing are the ones who are suffering. With high beta companies, who don’t have market makers, initial hard selling usually begets a vicious spiral of further selling. Which is what happened with Liberty. Once serious selling starts, a lot of people can’t handle the pain of hanging on, and at 25 cents Canadian, those who took their losses early have done better than those who waited.

Exactly the opposite may be true now. If you think the selling has been overdone, then it is better to be among the first to buy at these prices. You get the biggest bang for your buck if the stock is oversold and ready to turn up. Multiples come from getting in at great prices.

Let’s look at the fundamentals for a second. Liberty is not an abstruse software company, whose market potential is hard to gauge if you are a layman. Nor a junior gold minor with one exciting drill result, but those geology or metallurgy most investors don’t understand.

It’s easy to see that there is a real-world problem of mass shootings and terrorist incidents around the planet and its getting depressingly worse. That Liberty’s technology is part of the solution is obvious. As it will be to so many others as Liberty moves towards commercial sales and becomes better known.

At $ 17 million, their market cap has becoming seriously compelling for those who are savvy and willing to write a cheque.

We can see the selling volume has dropped in recent weeks. The majority of the sellers in recent weeks would have to have been the investors who came into the last two private placements and then freaked out as the price fell, which they would clearly have not been expecting. So some of them rushed to cap their losses by selling, setting off a major sell-off.

At 25 cents and a $ 17 million market cap, and having taken a 70% bath on their investment, if I were one of those still hanging on, I would not be selling now, and would be looking to see when to buy back because the fundamentals have only gotten stronger!

Here’s a simple strategy to consider. If you are more inclined to take risks, then you have been handed a real opportunity to buy at a market cap that has fallen from over $ 45 million in mid-September to $ 17 million now. And you’re waiting for a further discount?!

For those who are more risk-averse, perhaps buy some now. Then if the share price rises, you know its likely that the trend has reversed, so you can buy more with more confidence. On the other hand, if the share price falls a bit more after you buy some (there is a limit to how much more it can realistically fall before the large buyers steps in), then deploy the rest, if you are willing to invest in the company.

Remember you are responsible for your own due diligence!

Read more at https://stockhouse.com/companies/bullboard?symbol=v.scan&slp=2&postid=30302392#7corlmA3G0vl8r7u.99