In this article, we will discuss the 5 best stocks under $30 according to Ravee Mehta’s Nishkama Capital. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Stocks Under $30 According to Ravee Mehta’s Nishkama Capital.
5. Magnite, Inc. (NASDAQ:MGNI)
Nishkama Capital’s Stake Value: $8.8 million
Percentage of Nishkama Capital’s 13F Portfolio: 2%
Stock Price as of October 27: $25.29
Number of Hedge Fund Investors: 29
Magnite, Inc. (NASDAQ:MGNI) is one of the largest independent advertisement platforms in the world. The online advertising company is helping brands reach millions of consumers globally while maintaining their privacy.
The ad-tech industry has come under immense pressure following the impact of Apple Inc’s (NASDAQ:AAPL) privacy changes on its advertising business. Ad platforms would now require users to opt-in for targeted advertising in iOS 14. Previously, users were targeted with ads without requiring them to opt-in themselves.
This has also caused the analysts’ view to change as well. In a note issued on October 26, Jason Kreyer at Craig-Hallum reiterated the Buy rating on Magnite Inc. (NASDAQ:MGNI) but lowered the target price from $52 to $45. He highlighted that Magnite’s branded advertising services would be less adversely impacted as compared to direct response offerings due to change in Apple’s ecosystem.
Magnite Inc. (NASDAQ:MGNI) was mentioned in the Q2 investor letter of Alger, an investment management firm. Here’s what the fund said:
“Magnite provides an advertising supply side platform for publishers. The technology helps publishers such as network television stations or cable news providers automate the sale of digital advertising inventory across different formats and channels, like desktop, mobile, video, audio, connected TV and over-the-top TV. Publishers monetize their digital advertising inventory by using Magnite’s platform to access a global market of ad buyers, including advertising agencies that use supply side platforms. Magnite also helps sellers decrease costs and protect their brands and user experience. Magnite receives ad inventory from sellers and optimizes publishers’ revenue yields by processing the highest buyer bids. Currently, Magnite keeps approximately 10% of ad spend as revenue (i.e. take rate) and passes on the remainder of the ad spend to publishers. Magnite’s clients include many of the world’s leading publishers of websites and mobile applications and the company believes that its platform reaches approximately 1billion individuals globally.
Shares of Magnite underperformed in the second quarter due to the growth market selloff and slower-than-expected growth in connected TV during the first three months of this year. We believe the 32% growth in connected TV was below expectations and due to a one-time issue with one of the company’s publishing partners that ran out of advertising inventory. Management noted the issue has been fixed and the company saw strong reaccelerating growth in April. Additionally, we believe Magnite’s recent acquisition of video advertising company SpotX will significantly bolster the company’s positioning within connected TV, a high-growth area of the digital advertising market that is taking share from linear TV ad budgets.”
