Earlier this year I came across Tinybeans Group Ltd (ASX: TNY) and bought a parcel of shares at around $1.00 purely because I found the story interesting. A technical analyst I follow reviewed the company's chart and I decided to sell my position in late July at $0.97 for a small loss.
Fast forward 4 months, and the Tinybeans share price surged 260% from where I had sold, reaching an all-time high of $3.52. It is fair to say that I was (and still am) livid and have vowed to never sell based on someone else's opinion ever again.
The Tinybeans share price has been sold-off since hitting its all-time high and is currently trading around $2.20. So, is it a buy?
What does Tinnybeans do?
Tinybeans is a free social media platform developed in Australia and targeted towards parents who want to share photos and videos of their children within a secure community. I liked the company's story because it addresses the growing issue of cyber security and user privacy.
The Tinybeans platform is designed to boost online safety by creating a contained, invite-only environment. This allows parents to upload photos and videos of their kids and securely share the content within an approved network.
How has Tinybeans performed?
At one point this year, the Tinybeans share price was up an astronomical 1,125% for the year, after the company listed at 26 cents and hit an all-time high of $3.52. Tinybeans reported strong FY19 earnings, which saw operational revenue increase 118% from the year prior to $3.9 million.
The company also experienced a 31% growth in monthly active users of 1.23 million, with an engaged user base of 3.5 million members across more than 200 countries. In addition, Tinybeans boasts a 76% retention rate for FY19 and is well poised for accelerating growth with a $5.6 million cash balance.
Tinybeans generates revenue through advertising from brands, premium subscriptions and printed products. In the company's most recent quarterly report, Tinybeans saw revenue increase 91% to $1.12 million in comparison to the prior corresponding quarter.
Should you buy?
A recent report from Goldman Sachs called 'Millennial Moms' paints an optimistic outlook for Tinybeans. According to the report, approximately $1 trillion dollars are spent on goods and services for babies and children. This presents Tinybeans with a great market opportunity, especially with the emergence of complementary technologies.
All investors share the same experiences of buying or selling to early or too late, its part of the process. Personally, I think it's dangerous to let the fear-of-missing-out impact an investment decision. Some of the worst losses you can have are the result of chasing a company's share price after the majority of the move has occurred. Although the Tinybeans share price has pulled back I am cautious at the moment and will let the price action consolidate before making another investment.
