Stock Alert: BUY Immotion Group
8th April 2020 |
Originally published under Growth Stock Network on 8th April 2020.
On 6 March we recorded an exit from Immotion Group (LSE:IMMO), our virtual reality “edutainment” company.
The stock crossed our lower level trailing stop/loss and we were forced out with a 27.6% loss from our initial recommended entry. The loss wasn’t as bad as it could have been due to the fact with a trailing stop/loss as the stock moves higher, the conditional order follows it up, helping to mitigate some of the downside risk.
Either way, the use of these displayed its benefit as the stock continued to spiral lower with the wider market rout.
And on 17 March the stock really bottomed out at 1.25p. We continued to wait and watch. We anticipated that the influx on ongoing negative news around corporate restructures, rising unemployment and a march towards a deep recession would drag the market lower.
Astonishingly, it has not.
Not even the news that the prime minister has moved to an intensive care unit in hospital was enough to weigh on the market.
It seems now that with every smack of bad news, the market is just not “bovvered”.
Over this time though we’ve been keeping an eye on the stocks we were stopped out of and looking for the right re-entry. We think the time has come now to get back into Immotion Group.
The story hasn’t changed. Our long-term view of the stock hasn’t changed. The only thing that’s changed is the fact that under lockdown conditions people can’t go to places like aquariums, museums and centres to use the VR stands that Immotion has been rolling out.
Also, as a big part of its opportunity is US focused, it has really put the handbrake on the stock.
But as we know, these lockdown conditions won’t last forever. And we want to get ahead of the release of them on society. We think once the governments around the world start to release society from lockdown, stocks like Immotion will fly again.
Even if it’s a staggered release, the sheer fact of the vision that we might just return to a normal world will be enough to juice the market into overdrive.
As such, we recommend that you reread the original recommendation to refresh yourself of our rationale for the Immotion recommendation. You can get a refresher here.
The stock is currently trading at 2.00p and has been very volatile in the last few weeks. But should it return to its 20 January high of 8.75p – from here that would represent a 338% gain.
While the stock could trade lower should there be ongoing lockdowns and the situation of the virus spread gets worse again, it could drag on the stock. So you must be prepared for volatility and continuing high risk based on our original recommendation and the uncertainty that still surrounds coronavirus.
But we think the upside from here vs the risk of further falls is too good to pass up. Hence we’re recommending you BUY Immotion Group again.
BUY Immotion Group Plc. (LSE:IMMO) current price 2.00GBX, buy up to 2.30GBX. Make sure to use limit orders in case the stock jumps at the open.
Ticker: IMMO: LN
Price as of 07.02.20: 2.00 GBX
Market cap: £7.32 million
52-week high/low: 11.60p/41.25p
Buy up to: 2.30 GBX
Note: we’re not recommending the use of a trailing stop/loss this time around. The extreme volatility in the market could exit us from this position again. We believe over the long term, the stock will return back to its pre-coronavirus levels and we don’t want to risk being out of the stock should that happen.
Regards,
Sam Volkering
Editor, Growth Stock Network
