The All Ordinaries Index (ASX: XAO) has had a pretty decent year so far in 2023, all things considered. Despite a bevvy of interest rate rises, not to mention other issues in the global financial system, the All Ords is sitting on a healthy 5.3% year-to-date gain as it currently stands. But we can't say the same for the Novonix Ltd (AS:X NVX) share price.
Novonix shares started 2023 on a decent footing. The battery technology company began the year at $1.41 a share, before rising as high as $1.94. But today, the Novonix share price is languishing at a new 52-week low. The company opened at $1.10 a share this morning, before falling to $1.075.
That's the lowest price Novonix has traded at since late 2020. This puts this All Ords share's 2023 performance at a nasty 23% loss:
But these new lows for the Novonix share price might be piquing some value investors' attention out there. After all, Warren Buffett's words 'be greedy when others are fearful' could fit this situation well.
So are Novonix shares a screaming buy right now?
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Is the Novonix share price a buy today?
Well, sorry to disappoint any bullish investors out there right now, but I am not interested in buying Novonix. Not today, not tomorrow, and probably never. When looking for my next ASX share, I like to see a few things.
For one, a strong business with a strong moat. But also a business that is robustly profitable, and will be resilient to anything the wide world throws at it. Novonix fits none of these criteria in my opinion.
When reporting its FY2022 full-year earnings last August, it revealed its most pleasing metric: a 61% increase in revenue to $8.4 million. While that is positive, Novonix currently has a market capitalisation of just over $540 million, so I wouldn't say that makes the company look especially cheap right now.
We could use other, more accurate methods of valuation here, if only Novonix was profitable.
Instead, the company reported a total loss of $71.4 million for the year or -15.4 cents per share on an earnings per share (EPS) basis. That was up from the loss of $18 million the previous year.
So on a conceptual basis, the markets are asking us to pay $540 million for a company that turned over $8.4 million and lost $71.4 million last financial year. That's not a deal I'm taking home.
Novonix is operating in an exciting area and could well one day become a profitable player in the new world of battery-centred energy. But that's not a gamble I'm prepared to bet on today.
