The Motley Fool

SYME share price slide: Is [email protected] Capital a good UK share to buy?

I’ve been looking at covering [email protected] Capital (LSE:SYME) for a while, but couldn’t get my head round it. With billionaire Warren Buffett’s advice ringing in my ears: “Invest in what you know”, I thought if I can’t even get to grips with what this company does, it’s probably a warning to steer clear. However, with the SYME share price sliding after a significant rise, it’s again piqued my interest. I delved deeper to get a clearer understanding of what it’s about and whether it’s a good UK share to buy.

Inventory monetisation

  • It’s a fintech firm, meaning it utilises technology to offer a financial solution to businesses.
  • It’s giving companies an opportunity to make money from their inventory.
  • This inventory monetisation provides investors with a new asset class.

Combining these points, we come to the crux of the company. [email protected] has created a unique trading platform (the tech in fintech) giving manufacturing and trading businesses a chance to improve their working capital (the fin). At the same time, it provides investors with an exciting new area to get involved in.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

Putting inventory to work

Rather than be left with masses of unsold inventory sitting on company shelves, this platform gives companies a chance to generate cash flow from their unsold goods. The company can digitally add its inventory to the [email protected] platform. In return it gets certificates corresponding to the size of its digital allocation. The company then exchanges the certificates for cash from [email protected] The company can use this cash to keep its business ticking over. Meanwhile, if it sells the inventory, it buys back the certificates, removing its goods from the platform.

 

Supply@Me Capital SYME share price

Source: [email protected] Capital

[email protected] uses a private blockchain and legal formats, which makes each transaction fixed and transparent and garners trust from all parties involved. It appeals to funders because it’s less risky than small business loans and they receive a coupon payment on each certificate issued.

SYME share price volatility

Since the beginning of August, the SYME share price has enjoyed a spectacular rise, up over 1,000% at one point. But since mid-August it has seen extreme volatility. At this stage it’s very much a speculative investment, but the European inventory financing market has a potential value of nearly €2 trillion, which is largely fuelling the positive sentiment. Harnessing even a tiny portion of this could mean massive upside for this share, propelling it to become a UK share to buy.

Covid-19 has boosted the likelihood of this business model becoming successful. The disruption to supply chains caused at the beginning of the pandemic showed weaknesses in the system. This option to monetise inventory could encourage companies to boost inventory levels, protecting against supply chain issues that may cause a future loss in sales.

So, the penny has finally dropped, and I now have a clearer understanding of what this strange sounding company does. Its business model looks credible, the market potential is astronomical, and its recent bull run proves there’s confidence in its ability to deliver. Would I invest? I don’t think I’m confident enough yet. I prefer to invest in companies with a sound track record, growth prospects, and a dividend yield. Although it has growth prospects, the other factors make me think it carries significant risk. For now, I’ll wait and see.

Are you looking for growth stocks to boost your Stocks and Shares ISA? Let us help you boost your portfolio...

A Top Share with Enormous Growth Potential

Savvy investors like you won’t want to miss out on this timely opportunity…

Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this ‘pure-play’ online business (yes, despite the pandemic!).

Not only does this company enjoy a dominant market-leading position…

But its capital-light, highly scalable business model has previously helped it deliver consistently high sales, astounding near-70% margins, and rising shareholder returns … in fact, in 2019 it returned a whopping £150m+ to shareholders in dividends and buybacks!

And here’s the really exciting part…

While COVID-19 may have thrown the company a curveball, management have acted swiftly to ensure this business is as well placed as it can be to ride out the current period of uncertainty… in fact, our analyst believes it should come roaring back to life, just as soon as normal economic activity resumes.

That’s why we think now could be the perfect time for you to start building your own stake in this exceptional business – especially given the shares look to be trading on a fairly undemanding valuation for the year to March 2021.

Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Growth Share… free of charge!

Kirsteen has no position in any of the shares mentioned. 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.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.