SPECIAL REPORT 2021

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SPECIAL REPORT Micro-Cap Black Book Three Tiny Tech Stocks Set to 10X Your Money By Jeff Brown

Transcript of SPECIAL REPORT 2021

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SPECIAL REPORT

Micro-Cap Black BookThree Tiny Tech Stocks Set to 10X Your Money

By Jeff Brown

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Welcome to Brownstone Research.

I’m certain that some subscribers reading this now have been following my research for years. I sincerely appreciate your support and trust in the research that we produce. It is something we take very seriously.

Your lifetime membership includes research from The Near Future Report, Exponential Tech Investor, Early Stage Trader, and the free-to-read newsletter The Bleeding Edge.

And as a member of Brownstone Unlimited, you’ll receive lifetime access to all current and future research products. In fact, I’m already hard at work on two new research products. And there will be more.

As a lifetime subscriber, you can also look forward to new content exclusive to Brownstone Unlimited. That includes beta recommendations for research products I’m working on as well as a quarterly update on our entire suite of products.

I look forward to a great future with Brownstone Research. And with this special report, I’d like to share with you three new recommendations.

The three companies I’m about to share with you are all excellent investments that I’ve been “keeping

in my pocket.” I’ve never recommended them in any of my other research services. I’ve saved them for members of Brownstone Unlimited.

And all three companies are powering trends that readers will be familiar with… the 5G wireless rollout, the transition to Wi-Fi 6E, and even 3D printing.

Let’s get straight to it…

Founded: 1995Headquarters: San Diego, CADate of IPO: August 12, 2016

Micro-Cap No. 1: Buy Airgain (AIRG) up to $12.75.

The Company

Airgain is a leading provider of advanced antenna technologies for wireless network devices. These antennas go into everything from wireless routers and gateways to smart TVs, home security cameras, ATMs, enterprise kiosks, public transit vehicles, law enforcement and first responder vehicles, and even Internet of Things (IoT) devices in highly automated warehouses.

Micro-Cap Black Book: Three Tiny Tech Stocks Set to 10X Your MoneyBy Jeff Brown, Founder, Brownstone Research

SPECIAL REPORT 2021

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Below is a snapshot of the applications using Airgain’s antennas.

As we can see, Airgain services a broad market. In fact, Airgain’s antennas have been deployed in over 250 million wireless devices to date.

But that’s just a drop in the bucket compared with what’s to come.

What’s most exciting about Airgain is how the company has positioned itself ahead of the most important technology trend of the decade. I’ll explain with a little backstory…

The Perfect 5G Play

Readers will likely be familiar with fifth-generation wireless networks (5G) by now. I have been pounding the table on 5G for more than three years – long before it was on the mainstream’s radar.

5G is the next generation of wireless network technology. For context, here’s what each wireless generation has enabled since 1G in 1983:

• 1G (deployed in the 1980s): Analog cellular technology, very low bandwidth, designed to enable mobile phone calls

• 2G (deployed in the 1990s): Digital cellular technology, digital voice phone calls, enabled SMS (short messaging service – sending texts)

• 3G (deployed in the 2000s): Widespread use of CDMA (code-division multiple access) technology, high-quality audio for calls, early stages of low-quality video over mobile, and internet access

• 4G (deployed in the 2010s): Significant increase in data bandwidth, enabled internet browsing and streaming of high-quality video, voice over IP technology (basically, free phone calls anywhere in the world using services like Skype or any kind of messaging application)

And 5G will be a historic improvement over 4G. Simply put, 5G will allow us to do things we could have never done before. Here’s a snapshot of what it will mean for consumers:

• Speeds on a 5G network will be an average of 1 Gbps (gigabit per second), which would be 100 times faster than what a U.S. consumer experiences in the U.S. today with 4G.

Airgain’s Applications

Source: Airgain

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• Self-driving cars will be connected in real time over wireless networks.

• Companies will be piloting trucks for logistics remotely, just as drones can be flown from halfway around the world over satellite networks.

• We’ll be able to surf the internet and make phone calls while riding on a high-speed train up to 310 miles per hour (500 km/hour).

• Consumers will be able to “sit in” on meetings by projecting themselves using holographic images in real time with no video or audio delay.

• The world’s top surgeons will be able to perform remote surgery on patients from anywhere in the world – distance will no longer be an inhibitor.

• And there will effectively be no latency (delay) over 5G networks. Latency will drop by 99% from more than 100 milliseconds down to a mere millisecond. Latency like this would enable a doctor to operate on a patient with robotic surgery… over a wireless network.

And along with this revolutionary jump in technology comes additional hardware complexity.

If we go back to the days of 3G, antennas were merely an afterthought. Producers could slap any basic antenna in their device to make it work.

As 4G rolled out, antenna design became more complex. Not only did devices need to support 4G wireless networks, but they also needed to support 3G networks, Wi-Fi, and Bluetooth. Each of these radio technologies requires filters and antennas to work properly.

With 5G, the radiofrequency design and

complexity are significantly more complex, and that means antenna design is more critical than ever before. 5G operates at radiofrequencies that are higher than any network that’s come before. This high-frequency spectrum increases the antenna system demands substantially.

And that’s where Airgain comes in.

Airgain has been an innovative leader in complex antenna design for 5G. Antenna technology may seem less important than semiconductors in wireless devices. But the reality is that without the right antenna design and technology, the devices simply won’t function properly. And radiofrequency antenna design is very much an art form. It is very much a specialized area in wireless technology, and Airgain has more than 270 patents and applications in this space.

Applications like smart homes, smart cities, fleets of self-driving cars, holographic telepresence, and remote surgeries are only possible on 5G wireless networks.

And that means all the wireless devices that make these applications possible will need to have small, complex, and often custom-built antennae designed to operate over high-frequency bands on 5G networks.

Right now, Airgain features four 5G antenna designs for common use cases like smartphones, wireless gateways, and customer premise equipment (CPE) solutions. In addition, Airgain offers customizable solutions to match the needs of any new or upcoming application.

And Airgain’s patented Smart Antenna technology employs switching algorithms that ensure peak performance at all times. That makes Airgain a one-stop-shop for complex antenna design.

And 5G isn’t the only bleeding-edge technology trend that Airgain is positioned for…

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The Next Generation of Wi-Fi Technology

Back in April, the Federal Communications Commission (FCC) auctioned off spectrum for the next generation of Wi-Fi technology. This will enable Wi-Fi 6E – the biggest upgrade to Wi-Fi in decades.

Wi-Fi 6E refers to the 6 GHz frequency band. That’s what’s being unlocked by this new spectrum.

This is a big deal because our current 2.4 GHz and 5 GHz Wi-Fi bands are congested. We can simply look at all the different Wi-Fi networks in range of our home and office networks to verify this. I’ve got 12 other Wi-Fi networks in range of my home office as we speak.

And because we are all using the same frequencies, our networks interfere with each other. This slows down our speeds, and it sometimes leads to connectivity issues.

And here’s the kicker – the amount of spectrum

unlocked for Wi-Fi 6E in this latest auction was quadruple the amount available for Wi-Fi before. That means this new frequency band will be wide open. We’ll see a massive jump in performance on our home and office networks.

But to access Wi-Fi 6E, consumers and businesses will need a new router equipped with the hardware necessary to operate at this higher frequency. And that new router will need new antennas designed specifically for Wi-Fi 6. Who will provide those antennas?

That’s right – Airgain has already developed a product portfolio of antennas for Wi-Fi 6 applications. And just like it does with its 5G customers, Airgain can custom design Wi-Fi 6 antennas to meet customers’ specific challenges.

A Massive Market Opportunity

Airgain’s core competency lies in both 5G and Wi-Fi 6 antenna technology. The company seeks to dominate the market in those two areas. And that market is massive.

Airgain’s Total Addressable Market

Source: Airgain

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In total, Airgain estimates its total addressable market (TAM) size to be roughly $12 billion by 2022. That includes $780 million in consumer home and IoT applications, $4.4 billion in enterprise and industrial IoT applications, and a whopping $6.8 billion in automotive applications (think self-driving fleets).

Now, think about this in relation to where Airgain is today.

Airgain’s total revenues for 2019 amounted to $55.7 million. That means if Airgain can simply capture 5% of its total addressable market, it will 10x its revenues in three years.

Airgain has flown under the radar due to its small size and business model. The company works months, sometimes years, in advance designing antenna technology for devices. Eventually, the revenue follows. Airgain has been working on designing its technology for 5G and Wi-Fi 6 and 6E applications for quite some time now. As those products are manufactured, Airgain will see a jump in its revenues.

While the company’s revenues will decline year over year during the pandemic, it will grow rapidly over the next few years because of these two new radio technologies, 5G and Wi-Fi 6/6E. This company has the potential to really take off.

This is a rare chance to build a position in a great technology company that almost no one knows about.

Action to Take: Buy Airgain (AIRG) up to $12.75 per share. We will hold this position without a stop loss.

Risk Management: Because we will be holding this position without a stop loss, position sizing is essential. Micro-cap companies can be extremely volatile. We shouldn’t be surprised to see these stocks move double digits in a single day. As such, I would recommend a smaller position size than normal. Another way to think about proper position sizing is to not invest any more than an investor is willing to lose. And remember, I never recommend going “all in” on any one investment.

Founded: 2011Headquarters: Rolling Meadows, ILDate of IPO: June 26, 2019

Micro-Cap No. 2: Buy Cambium Networks (CMBM) up to $12.30.

The Rise of CBRS

Cambium Networks is a wireless communications company specializing in CBRS technology. CBRS stands for Citizens Broadband Radio Service. This is a radiofrequency (RF) spectrum band that the FCC has set aside to be licensed on a case-by-case basis. I’ll explain with a little backstory…

With the rise of fifth-generation wireless networks (5G), we may be more familiar with the radio spectrum and radiofrequency bands. Wireless carriers like Verizon and AT&T scrambled to buy spectrum so that they could build out their 5G networks.

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The radio spectrum consists of frequencies ranging from 30 Hz to 300 GHz. This is segmented into radiofrequency bands that are regulated by both national laws and an international regulatory body called the International Telecommunication Union (ITU).

Radiofrequency bands enable all modern telecommunications. Radio signals, television signals, satellite communications, GPS, Wi-Fi, 4G, and now 5G operate within specific radiofrequency bands.

That’s why these bands are heavily regulated – too many services operating in the same band would interfere with each other. Look at the visual at the bottom of this page.

When Verizon buys spectrum for its 5G network, what it is buying is the exclusive right to use a specific radiofrequency band. That’s how it knows that no other radiofrequency transmissions will interfere with its network.

As we saw recently, spectrum auctions are something of a land grab. Typically, whoever bids the highest price in each regional market wins the frequency. That makes it hard for smaller companies or nonprofit entities to secure spectrum for their own services.

And that’s where CBRS comes in. CBRS is spectrum that won’t be auctioned off in large blocks to the highest bidder.

Instead, the FCC established a three-tiered approach to determine who gets to use parts of the spectrum. And when a participating entity no longer needs its spectrum, that spectrum becomes available for use by another entity.

The three-tiered system looks like this:

1. Incumbent Users: This includes authorized federal users, some fixed satellite service stations, and certain other grandfathered licensees.

2. Priority Access: Entities can pay a fee to license a 10 MHz block of spectrum for a specific county for 10 years. No more than seven 10 MHz blocks can be allocated within the same county, with a limit of four blocks per licensee.

3. General Authorized Access: General users can operate throughout the band as long as they do not interfere with incumbents and priority access users.

The FCC officially established the CBRS in 2015.

Commercially Exploited Bands of the Radiofrequency Spectrum

Source: Encyclopaedia Britannica

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This model has never been tried before. The CBRS is essentially a giant experiment that the rest of the world is watching closely. If the model proves successful, we can expect to see it adopted by the international wireless community.

So where does Cambium Networks fit into the equation?

The Company

Cambium Networks’ mission statement is simply to connect people, places, and things. It sees itself as the bridge between legacy wired systems and next-generation wireless technology for a hyperconnected world.

To that end, Cambium designs purpose-built wireless technology for mid-sized service providers and mid-market enterprises. That’s Cambium’s sweet spot.

While the rest of the industry competes doggedly for the large Tier 1 service providers like AT&T, Verizon, Vodafone, Telefonica, and so on, Cambium focuses on the middle of the market. These are service providers that are the next tier down, but they still have scale and are an attractive revenue opportunity for Cambium.

Cambium now has more than 10,000 customers and a presence in 150 countries. Among its customers are companies like Exxon Mobil, British Petroleum (BP), Sprint, Penn State University, and even the United States Marine Corps.

And Cambium boasts a comprehensive product portfolio consisting of point-to-point, point-to-multipoint, enterprise Wi-Fi, industrial IoT, video surveillance, and software solutions. Here’s what each of those mean…

The company’s point-to-point solutions provide wireless backhaul solutions that serve critical applications in remote or formidable environments. A remote oil drilling site or a mining operation are great examples of formidable environments where Cambium’s services are needed.

It is common for oil and mining companies to discover new deposits in remote areas that lack modern infrastructure. In those instances, Cambium’s solutions can establish reliable, high-speed internet connectivity to the job site, which is critical for the success of the enterprise.

Cambium’s point-to-multipoint solutions provide network operators with the ability to

Cambium’s Broad and Diverse Customer Base

Source: Cambium Networks

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deploy wireless networks across a geographic area consisting of diverse endpoints and a multitude of frequencies. In other words, these products enable one wireless solution to serve multiple needs at once.

Cambium also offers enterprise Wi-Fi solutions that enable businesses to operate robust wireless networks in any environment – be it small offices or high-density urban areas. Cambium’s Wi-Fi utilizes a cloud-first architecture that’s simple for businesses to manage. And it boasts “wire-like” performance at disruptively low costs.

Going hand-in-hand with the Wi-Fi offerings, Cambium also provides industrial Internet of Things (IoT) solutions. This is something we are going to start hearing more and more about. Industrial IoT refers to industrial sites with a wide range of interconnected devices and sensors that constantly talk to one another.

We can think about a highly automated manufacturing plant where machines coordinate

with each other to produce a final product. Another great example is an oil and gas site where sensors are constantly monitoring for gas leaks or weak spots in the pipeline system.

Additionally, Cambium Networks offers video surveillance solutions and software that enables enterprises to manage everything.

Cambium delivers to its customers whatever wireless radio technology its customers need. Whether a customer needs a long-range Wi-Fi network, a wireless backhaul system, or a private 4G wireless network, Cambium can deliver it all.

And this February, the CBRS industry completed its specifications for deploying 5G wireless technology over the CBRS frequency bands. That means that Cambium is also capable of deploying private 5G wireless networks for its customers.

The beautiful thing about Cambium’s product portfolio is that it is complementary. Each

Cambium’s Complementary Products

Source: Cambium Networks

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product solution works perfectly alongside the next. To demonstrate this, the graphic on the previous page is a great visual from the company’s most recent investor presentation.

So Cambium Networks provides scalable solutions that can be tailored to an enterprise’s specific situation. And Cambium provides cloud-based management solutions as well as 24/7 enterprise-class support. It’s the perfect offering for a digital-first world.

An Incredible Market Opportunity

Cambium Networks expects wireless mobile data traffic to grow at a 46% compound annual growth rate (CAGR) over the next two years. That’s thanks to a rapid migration to cloud applications, increased video streaming and video communications use, increased deployment of video surveillance, and increased IoT usage.

As a result, Cambium Networks estimates its total addressable market size to be roughly $22.5 billion. That includes $18.6 billion in wireless network and switching solutions, $3.3 billion for point-to-point solutions, and $600 million for point-to-multipoint solutions.

Now, think about this in relation to where Cambium Networks is today.

Cambium’s total revenues for 2019 amounted to $267 million. That means if Cambium can simply capture 5% of its total addressable market, it will increase its revenues by a factor of four.

Today, Cambium Networks (CMBM) trades at an enterprise valuation that’s just 1.7 times current sales. In other words, investors can buy Cambium Networks right now for less than two years annual revenues. That makes the stock undervalued today, even if Cambium never increases its revenues.

And that’s our big opportunity. By establishing a position in Cambium Networks (CMBM) today,

we are setting ourselves up to triple our money in the next 24-36 months as the company’s revenues explode higher.

Action to Take: Buy Cambium Networks (CMBM) up to $12.30 per share. We will hold the position without a stop loss.

Risk Management: Because we will be holding this position without a stop loss, position sizing is essential. Micro-cap companies can be extremely volatile. We shouldn’t be surprised to see these stocks move double digits in a single day. As such, I would recommend a smaller position size than normal. Another way to think about proper position sizing is to not invest any more than an investor is willing to lose. And remember, I never recommend going “all in” on any one investment.

Founded: 2012Headquarters: Ness-Ziona, IsraelDate of IPO: May 10, 2014 Market Capitalization: $98 million

Micro-Cap No. 3: Buy Nano Dimension (NNDM) up to $2.60.

3D Printing’s Early Flop

Nano Dimension is a company working in the precision additive manufacturing space. We may know this industry better as simply “3D printing.”

3D printing starts out with a three-dimensional model of an object on a computer. This model can be created from scratch using computer

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software, or it can be downloaded from a shared online repository.

The other piece of the puzzle is the 3D printer, which can range in size from something that fits on a desk to something large enough to print a house.

With the chosen 3D model up on the computer screen, users simply click “print.” Then the computer sends the 3D model to the printer and instructs it to build the object by laying down hundreds or thousands of horizontal layers of raw material.

Here’s a visual. This is the MakerBot, which is a popular consumer 3D printer.

The MakerBot Printer

Source: MakerBot

In this case, the MakerBot was used to make a bunny figurine out of a plastic resin.

And that raises an important question – what raw materials are used in 3D printing?

The answer is different types of plastic, nylon, carbon fiber, wood filament, and metal filament.

These have been the primary materials used in 3D printing up to this point.

Investment in 3D printing companies experienced a wave of hype in 2012, which continued through to early 2015. The market was anxious to project that there would be a 3D printer in every home and at every company. That may eventually be correct, but investors were a bit early on the trend.

Let’s have a look at the chart of Stratasys (SSYS) above, which is one of the largest 3D printing companies in the world. This is the company that acquired MakerBot Industries in 2013.

Stratasys (SSYS) went on a tear in 2009 as the world began to recover from the financial crisis and got excited about next-generation technology. The stock skyrocketed 1,638% from March 2009 to January 2014, going from $7.85 per share to a peak of over $136.

But then the stock crashed. Ultimately, Stratasys (SSYS) lost 90% of its value. Today, it trades around $14 per share.

Why did this happen?

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Simple. The industry wasn’t ready for mass adoption yet. The technology was great for certain applications, but it was not yet ready for a wide range of on-demand manufacturing. But while the industry cooled off for the last five years or so, the technological development in additive manufacturing didn’t slow down at all.

And that brings us to our last micro-cap recommendation today – Nano Dimension (NNDM).

The Company

Nano Dimension refers to itself as a developer of intelligent machines for the fabrication of additively manufactured electronics (AME).

In layman’s terms, Nano Dimension has developed a 3D printer for electronics that’s powered by artificial intelligence (AI). How’s that for bleeding edge?

DragonFly LDM

Source: Nano Dimension

The 3D printer is called the DragonFly LDM.

LDM stands for lights-out digital manufacturing. This is a manufacturing technology where the system runs 24/7 with little to no intervention necessary. Users simply tell it what to print, and it will work all night long.

The DragonFly system can produce things like circuit boards, sensors, antennas, magnets, and RFID (radiofrequency identification) tags. And it can often produce these electronics cheaper and more efficiently than legacy manufacturing systems.

What’s exciting here is that this technology paves the way for limitless innovation in a score of industries. Academia, aerospace, automotive, consumer electronics, defense, drones, industrial, medical devices, robotics, and telecommunications are among the industries that stand to benefit tremendously from Nano Dimension’s tech. A DragonFly LDM system could produce custom-designed electronics for applications across all these industries.

And Nano Dimension couldn’t ask for a better catalyst to drive adoption of its system than the one it just got…

Readers of my daily e-letter, The Bleeding Edge, know that I have been talking about a manufacturing renaissance coming to the United States. We are starting to see companies set up factories onshore again, where the finished products will be produced closer to the markets they serve.

But these aren’t the factories of old. They are high-tech, highly automated factories loaded with interconnected machines, devices, and sensors.

And the COVID-19 pandemic kicked this trend into hyperdrive.

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COVID-19 exposed the fact that most companies in the Western world have a supply chain problem. That’s because they are heavily reliant on goods produced in China and other parts of Asia.

That model worked fine in a normal world. But when entire economies go on lockdown and demand for certain goods spikes, the whole supply chain breaks down. Orders that were previously confirmed in two to four days and shipped within a week were suddenly being confirmed in two or three weeks with no estimated timeline for shipping.

As a result, American companies have struggled to get the goods they need to produce their products, which leads to local shortages of consumer goods, industrial parts, and even medicines.

The good news is that the world has realized this weakness. Bank of America surveyed 3,000 firms in 10 major global industries back in February 2020, including semiconductors, automotive, and medical equipment. Many of those firms said they plan to localize at least part of their supply chains, shifting production away from Asia and back to the U.S. and other parts of the West.

The only way relocalizing supply chains works from an economic perspective is if the production is automated. And what better way to automate production than an AI-powered 3D printer that can crank out high-quality electronics 24/7?

And whether or not customers use Nano Dimension to print electronics for custom manufacturing purposes or for rapid innovation and prototyping… every company that uses electronics in its products would benefit from NanoDimension’s latest DragonFly LDM.

So Nano Dimension is perfectly positioned to help power a key part of the manufacturing renaissance that has already started in the U.S.

The Razor-Razor Blade Model

And Nano Dimension is following a tried-and-true business model.

It all starts with the DragonFly 3D printer, which isn’t cheap. Nano Dimension is selling the DragonFly LDM for as much as $350,000 per machine. At that price point, the company doesn’t have to sell a lot of systems to drive revenues.

But the sales of the DragonFly system are only the beginning…

Nano Dimension also sells the materials that go into the 3D printer. These are called consumables because once they are used, they are gone – consumed. Then customers must order more.

It’s the old razor-razor blade model. If you can get the customer to adopt your razor, the customer will come back for new razor blades every month. That’s how you create a recurring revenue stream.

Readers of my Exponential Tech Investor service will recognize this as the same model Quanterix (QTRX) has used to nearly quintuple its annual revenues in just four years.

Naturally, that translates into big gains in the share price. With Quanterix (QTRX), we are now sitting on 101% gains in under two years.

Given how small the company is, we have the potential to see even bigger gains with Nano Dimension as 3D printing helps power the American manufacturing renaissance.

And that brings us to the opportunity that lies in front of Nano Dimension…

The Rise of 3D Printing

The market for 3D-printed electronics was a meager $176 million in 2017, and it is still well under $500 million today. However, this market is set to quintuple over the next five years.

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The 3D-printed electronics market is expected to hit $2.4 billion by 2025.

Yet Nano Dimension generated $7.1 million in revenues in 2019. That means this company can 10X its revenue by capturing just 3% of the industry’s market share. That’s not unreasonable at all.

Ultimately, I expect Nano Dimension to do much better than just 3% market share. And that’s because the company has one more trick up its sleeve…

As we have seen, Nano Dimension sells both the 3D printer and the materials that go into it. In addition, the company sells software that allows users to design their own complex prototypes to be 3D printed on the DragonFly system.

The software is called SOLIDWORKS, and it is primed to revolutionize this nascent industry. For the first time, enterprises can design and 3D print their own electronics with the push of a button.

Whether it’s circuit boards, antennas, RFIDs, sensors, electromagnets, or other experimental circuits, the industry now can experiment with innovative electronics designs at a very low cost.

Think about it – this is the first time a company can easily produce a single piece of electronics for testing and experimentation. That dynamic will unlock new ways of thinking about innovative solutions for today’s hyperconnected world.

So I am incredibly excited about the work Nano Dimension is doing. This company is in a unique position where the more systems it sells, the more demand it creates for its consumables and software solutions. That’s the perfect business model for exponential growth.

And we have a fantastic investment window to establish our position today. That’s because Nano Dimension has suffered the same fate as Stratasys and other 3D printing companies. The stock is down 98% from its all-time high.

As we can see from the chart above, Nano Dimension went public at the absolute top of the industry hype. Then it quickly hit an all-time high of $113.60 on October 12, 2015.

As I write, NNDM trades just under $2 per share. It would have to soar over 5,500% just to get back to where it was before.

Now, I’m not predicting a 55-bagger from NNDM. That previous all-time high wasn’t based on any fundamentals. But I do think we have a chance to 5x or maybe even 10x our money with this investment.

After all, Nano Dimension can 10x revenues just by capturing 3% of the market for 3D-printed electronics by 2025. And I don’t think it will have any problem doing so in time.

So let’s jump on this opportunity to invest in the budding American manufacturing renaissance and establish a position in Nano Dimension today.

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Action to Take: Buy Nano Dimension (NNDM) up to $2.60. We will hold the position without a stop loss.

Risk Management: Because we will be holding this position without a stop loss, position sizing is essential. Micro-cap companies can be extremely volatile. We shouldn’t be surprised to see these stocks move double digits in a single day. As such, I would recommend a smaller position size than normal. Another way to think about proper position sizing is to not invest any more than an investor is willing to lose. And remember, I never recommend going “all in” on any one investment.

Naturally, these micro-cap companies have a lot of volatility in their share price. We may see an initial surge in the stock right after this report

goes out. Please don’t chase these stocks higher if they spike above our buy-up-to price at first.

Rest assured the stock price will fall back down into our buy range after the initial surge. And we will likely have several windows within which to establish our positions at a fantastic price.

If the stock price shoots higher at first, investors can consider placing a good-’til-canceled (GTC) buy limit order at or below our buy-up-to price. That will ensure that the trade is executed as soon as the stock falls back down into range.

And remember, I will always alert readers if I raise my recommended buy-up-to-price.

Regards,

Jeff Brown Founder & Chief Investment Analyst, Brownstone Research