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Technical view: Trinity Capital Inc. (TRIN)

Technical view
 

TRIN is in stage #2, but the recent SVB trouble may be spilling into this stock as well. That may send this stock into a further downward spiral and change the stage back to #4. TRIN invests in startups too and may be in financial stress the same way as SVB is. If the issue stays contained to SVB only, this will be a great blip (dip) to buy. As of now, it is more of a “wait and see” status.

 
Technical view weekly
 

The company is relatively new so there is not much data available, so when investing in his company, caution is needed. The company’s revenue was growing in the 3rd and 4th quarters last year after a sharp decline at the beginning of 2022. If the trend continues, it will help the stock to move higher. This can also be behind the recent rally:

 
Technical view weekly
 

Trinity’s free cash flow data indicate that the company is burning cash. Not good:

 
Technical view weekly
 

What can be seen positively however is that the company eliminated its recent debt and has cash in hand to sustain operations and dividends:

 
Technical view weekly
 

The company is also reducing shares outstanding which economically illiterate politicians see as a bad thing which in fact is a good thing:

 
Technical view weekly
 

The stock is fundamentally undervalued, and it offers a nice cushion of safety right now (unless something changes). There is a risk when investing in this type of company but as we see new “risk on” from the investors pouring money into startups again, TRIN will benefit from it. The company recently originated over $239 million in new loans. This indicates that the management is confident that the economy will continue growing. Of course, they may be wrong.

 
Technical view weekly
 

Technical view weekly
 

The stock is now MODERATE BUY
 

This post was published in our newsletter to our subscribers on Saturday, March 11th, 2023. If you want to learn more about our stock technical analysis subscribe to our weekly newsletter.
 





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