Invacare Corporation

Invacare Corporation (NYSE: IVC) manufactures and distributes non-acute care medical equipment. Home medical equipment suppliers, residential living operators, wholesalers, and government health services are the primary customers for its products.

Key Highlights:

• The company recorded an increase in net losses to USD 22.76 million in Q3FY21 vs. USD 7.28 million in Q3FY20.
• The company's gross profit as % to net sales was down to 26.9% in Q3FY21 compared to 28.3% in Q3FY20, with the drop owing to supply chain delays that resulted in increased freight and material costs.
• As surging energy costs, labour shortages, and supply disruptions combined with solid demand pressures, the annual inflation rate in the United States advanced to 7.5% in January 2022, resulting in negative market sentiments.
• The company's gross, EBITDA, operating, and net margins are all much lower than the industry median in Q3FY21.
• The stock is currently trading below its crucial support level 50 days and 200 days SMA from a technical viewpoint.
• The stock has made a new 52 week low today.

Stock Recommendation

Based on the company's increasing losses, the decline in margins, macro headwinds, and bearish technical indicators, we recommend an "Avoid" rating on the stock at the closing price of USD 2.00, down 5.66% as of February 22, 2022.

3-Year Technical Price Chart (as of February 22, 2022). Source: REFINITIV, Analysis by Kalkine Group

  *The reference data in this report has been partly sourced from REFINITIV.

Taoping Inc.

Taoping Inc. (NASDAQ: TAOP) is a blockchain technology company that offers intelligent cloud services. In China's Out-of-Home advertising sector, the company provides cloud-based ad display terminals, a digital advertising distribution network, and a new media resource sharing platform.

Key Highlights:

• The company posted a net loss of USD 14.46 million in H1FY21 compared to USD 7.94 million in H1FY20 due to hefty administrative expenses and rising revenue costs.
• As a loss-making enterprise, the company has generated negative EBITDA, operating, and net margins compared to positive industry margins.
• Due to new business developments in cryptocurrency mining and advertising, the company anticipates a significant decline in gross margin for the remainder of FY21.
• TAOP has risks connected with new businesses or assets acquired through mergers or acquisitions, and acquired companies may not perform as expected, resulting in adverse operational outcomes.
• From a technical standpoint, the stock is currently trading above its critical support level of the 200-day DMA. It has an RSI of 60.26, approaching the overbought territory.
• Stock is leaning towards the lower band of the 52-week range of USD 1.37 to USD 16.86.

Stock Recommendation

Based on the recurring losses, higher operating costs, unclear outlook, associated risks, and unfavorable technical indicators, we recommend an "Avoid" rating on the stock at the closing price of USD 2.02, up 1.51% as of February 22, 2022.

3-Year Technical Price Chart (as of February 22, 2022). Source: REFINITIV, Analysis by Kalkine Group

 *The reference data in this report has been partly sourced from REFINITIV.

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