The share price of one of my longest-held stocks has been motoring in recent weeks. Since the beginning of January, the company’s valuation has soared 75%.
So, what is this hot stock and why is it the flavour of the month? And should I lock in gains or buy more for my ISA? Here’s my take.
The soaring SEE share price
The name of the company in question is Seeing Machines (LSE: SEE). The Canberra-based business develops and supplies tech that monitors levels of fatigue and distraction in drivers. But we’re not just talking about cars here. The adaptability of its products means that Seeing can have its fingers in many sector pies, including off-road, fleet and aviation.
As one might expect when it comes to the adoption of new technology, however, progress has felt painfully slow at times. Multiple fundraisings have tried investors’ patience, as has the ‘pop and drop’ behaviour of the share price. That said, many owners of the stock are, like me, perhaps in a more forgiving mood these days, I feel.
The gains seen in the SEE share price over the last few weeks appear to have been in anticipation of news released yesterday. This relates to confirmation that the company will partner with US computing giant Qualcomm Inc in designing a driver monitoring system. Perhaps most importantly for those already invested, CEO Paul McGlone stated that Seeing expects this relationship “to deliver significant incremental volume” on top of its existing business plan.
Having seen my stake in Seeing Machines rise so spectacularly since the beginning of 2021, I’m now left with a quandary.
Should I sell now or buy more?
One argument for selling is that some traders will seek to lock in some profit soon. This will likely make the SEE share price volatile or certainly more volatile than your typical FTSE 100 stock.
As mentioned earlier, this is nothing new to those already invested. Back in June 2018, Seeing hit a share price high of almost 13p. In less than 12 months, it was back down at 3p. In the March 2020 market crash, it fell to as low as 1.7p. This is most definitely not a share for the faint-hearted. If I was a prospective investor now, I’d definitely go in with my eyes open.
On the other hand, I find it hard to overlook the importance of SEE’s tech. Based on over 20 years of research, its AI driver safety systems already save lives and should continue to do so as safety features are mandated around the world. The link with Qualcomm could also lead the AIM-listed company to hit the radars of tech-obsessed investors across the pond. This could usher in more buying and more share price momentum. On a long enough timeline, I can even imagine the company being of interest to a deep-pocketed suitor. Not that such an outcome can be guaranteed, of course.
I suspect I will retain my full position for now. But I need to ensure my position doesn’t become too large relative to my other holdings. A concentrated portfolio where only a few stocks dominate can be very risky if some fail. Some diversification is essential.
For now, however, I’ll simply toast this development and salute the recent uplift in the SEE share price.
Paul Summers owns shares of Seeing Machines Ltd. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.