SDC

Inflation! How to Think About Value Duration

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By Brian Nelson, CFA Investors continue to focus on the prospects of rising inflation expectations, which are impacting Treasury bond yields. The 10-year Treasury note, which is used as the foundation for discount rates within most valuation constructs, now stands at ~1.61%, up meaningfully from the ~0.5% lows set in early August 2020. The Fed/Treasury continue to be highly accommodative, and the growing market capitalization of cryptocurrencies is adding even more “new money” to the system. Investors continue to discount the longer-duration free cash flow profiles of the most speculative technology companies more aggressively. For example, the ARK Innovation ETF (ARKK), which is full of speculative tech names, has fallen to ~$105 per share from a 52-week high of $159.70 … Read more

SmileDirectClub Comes Under Fire

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Image Shown: SmileDirectClub Inc has come under tremendous regulatory fire of late, which has aggressively pressured shares of SDC. By Callum Turcan We covered SmileDirectClub Inc (SDC) back in September 2019 shortly after its IPO in this article here. Since going public at $23 per share (the unconventional orthodontics company’s shares fell aggressively during their first day of trading), shares of SDC have tanked with an eye towards growing regulatory concerns and related obstacles. In our conclusion we noted that: While SmileDirectClub’s growth trajectory is quite intriguing, we prefer to wait until we get a better idea of the regulatory landscape the start-up faces and what its financial performance will look like now that it’s a public entity in the … Read more

The Orthodontics Industry Is Getting Disrupted

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Image Source: SmileDirectClub Inc – S-1 SEC Filing By Callum Turcan SmileDirectClub (SDC), the teledentistry startup that makes 3D-printed clear aligners which are a cheaper alternative to braces (albeit with drawbacks when compared to the traditional braces route), went public this September at $23/share. The stock has come under pressure since then over concerns regarding its mounting losses. What makes SmileDirectClub different than traditional orthodontics practices is that customers don’t necessarily need to go into an office to get these types of services. The company has its SmileShops where customer’s teeth can be scanned in-store within half an hour, or offers remote impression kits that are shipped to the customer’s house and then shipped back. Another important consideration is that … Read more