Small-Cap Sunday: Amesite, Ames National, American Well, Ampco-Pittsburgh, and Glass House Brands 

The TDR Three Key Takeaways regarding Small Cap Sunday Highlights:

  1. Amesite (NASDAQ: AMST) is an AI-focused education technology company based in Detroit, Michigan. It offers AI-powered platforms for universities and professionals. 
  2. Ames National (NASDAQ: ATLO) has a dividend yield of 5.35% is well-covered by a free cash flow of $10.6 million.
  3. Glass House Brands Inc. (CSE: GLAS.A.U; OTCQX: GLASF) reported 66% revenue growth last year and a nearly 50% three-year CAGR.

Small Cap Sunday analyzes five small-cap stocks: Amesite (NASDAQ: AMST), Ames National Corporation (NASDAQ: ATLO), American Well Corp. (NASDAQ: AMWL), Ampco-Pittsburgh Corp. (NYSE: AP), and Glass House Brands Inc. (CSE: GLAS.A.U; OTCQX: GLASF), examining their market positions, financial health, and future prospects.

Amesite (NASDAQ: AMST), an AI-focused education technology company based in Detroit, Michigan, offers AI-powered platforms for universities and professionals. Founded during the pandemic,  Amesite trades at $2.86 with a market cap of $7.2 million. The company has 2.5 million shares outstanding and a daily trading volume of 4.17 million. The founder’s past success, including a $90 million exit with a battery company purchased by Dyson, adds credibility. Despite the high potential for revenue growth with products like the Nurse Magic App, the company’s burn rate of $600,000 per quarter raises concerns. With current liquidity of $2.8 million,  Amesite has a runway of 12 months unless revenue increases.

Ames National Corporation (NASDAQ: ATLO), a community bank based in Ames, Iowa, embodies traditional banking values with local decision-making and conservative lending practices. The bank trades at $20.16 with a market cap of $181 million and 8.9 million shares outstanding. Ames National operates with six brands across 11 communities and 18 branches. Its dividend yield of 5.35% is well-covered by a free cash flow of $10.6 million against $9.7 million in dividends paid. The bank maintains stable asset growth and low default rates, making it an attractive option for dividend-focused investors interested in small-cap companies.

American Well Corp. (NASDAQ: AMWL), or Amwell, is a telehealth company based in Boston, Massachusetts. During the pandemic, its stock soared from an IPO price of $18 to $35, driven by a surge in telehealth usage. However, as life returned to normal, the stock plummeted to $0.30, with a market cap of $89 million and 299 million shares outstanding. Despite Google’s $100 million investment at IPO, Amwell’s revenue growth has been a mere 1.8% over the last three years, far below the 20-30% expected. The company spends 45% of its revenue on R&D, contributing to a negative EBITDA of $233 million last year. With a burn rate suggesting a runway of 1.5 years, significant financial challenges remain, making it a cautionary example among small-cap stocks.

Ampco-Pittsburgh Corp. (NYSE: AP), a steel manufacturer based in Pittsburgh, Pennsylvania, has a history dating back to 1929. Despite a 97% drop from all-time highs, the company shows signs of turning around. Ampco has a market cap of $14.95 million, 19.86 million shares outstanding, and a working capital of $118 million. Positive EBITDA of $5.9 million and a leverage-free cash flow of $1.7 million in the last quarter indicate improved financial health. The tangible book value per share is three times the current trading price, suggesting a great opportunity. This long-standing company could rebound quickly with favorable market conditions, making it a compelling choice among small-cap companies.

Glass House Brands Inc. (CSE: GLAS.A.U; OTCQX: GLASF), a cannabis company based in California, has made significant strides, reflected in its stock performance—up 45% this year and 110% over the past 12 months. The company reported a 66% revenue growth last year, with a three-year CAGR of nearly 50%. Gross margin improved by 18.1% to 49.5%, aligning with industry peers. However, SG&A expenses remain high at 41% of revenue. Glass House’s balance sheet exhibits higher risk, with a current ratio of 0.43 and a debt-to-assets ratio of 56%. Despite turning cash flow positive, continued high CapEx spending underscores ongoing financial commitments. While promising, caution is advised due to the higher risk associated with its balance sheet and the upside of the stock potentially already priced in.

This is just a brief summary of what we covered on Small Cap Sunday. Check out the full episode to learn more about each company and what we found in our analysis. 

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