With deep connection to US government organisations, proven ability to sign big contracts with big organisations
Opened: 25-Feb-2022
Shares Held at Open: 4,385,547
What does WHK do?
WhiteHawk (ASX:WHK) is an ASX-listed, USA based cybersecurity company, providing cyber risk products, services and solutions.
What is the macro theme?
Global cybersecurity threats are growing and businesses and governments are ramping up spending on their cybersecurity defences. Increasingly state sanctioned, or state-tolerated actors are involved in major attacks, meaning cybersecurity has never been more important.
Why did we invest in WHK?
Strong management team
With deep connection to US government organisations, proven ability to sign big contracts with big organisations
Large contract sizes
WHK is slow to progress deals, but when they happen they are generally for large $ contracts, with big organisations that are sticky customers.
Partner deals to deliver revenue
Key partner deals signed with more in the pipeline, yet to deliver revenue
Tiny market cap
Around $25M with US$2.3M revenue in 2021 and a growing presence in a high-growth industry, the share price could re-rate if WHK announces sizeable contracts with major partners
What do we expect WHK to deliver?
Objective #1: More contracts, partnerships and proofs of concept
WHK management has proven they can sign contracts and partnerships with top tier large organisations, but the deals are slow to be delivered. We want to see the effort of the last few years in building the pipeline come to fruition in 2022, with WHK delivering the following:
Objective #2: First revenue from channel partnerships
WHK has already signed some interesting partnerships deals (Dun & Bradstreet, Amazon web services) which have great potential, we want to see the first revenue coming in from these partnerships.
Objective #3: Proofs of Concept (POC) increase to full, multi-year contracts
WHK is signing proofs of concept (small paid contracts to try the product, that lead to bigger contracts if successful) - we want to see WHK successfully convert several POCs to large contracts.
Objective #4: Double revenue in the next annual report
Objectives 1, 2 and 3 will lead to the ultimate goal of growing revenue, for a strong share price performance we want to see WHK double its revenue this US financial year - targeting a topline revenue of US$4.6M (which is double the recently released US FY21 financials at US$2.3M).
What could go wrong?
Sales Risk
Deals continue take a long time and investors lose interest, alternatively loss of key contracts
Market Risk
Covid resurgence delays government spending once again
Competition Risk
The cybersecurity industry is a competitive space. Other companies may step in and take key clients
What is our investment plan?
We have been holding WHK for a few years now, we announced it to our portfolio in May 2019. We really back the management team to deliver and are happy holders into 2022 despite recent share price weakness.
We will likely look to further increase our position in WHK over the next few months if prices remain around current levels.
We will hold a position in WHK for at least another 3 years. If the share price reaches near previous highs we will look to take some profit and reduce total position by up to ~25%
Disclosure: Disclosure: The authors of this memo and owners of Next Investors, S3 Consortium Pty Ltd, and associated entities, own 4,385,547 WHK shares at the time of writing. S3 Consortium Pty Ltd has been engaged by WHK to share our commentary on the progress of our investment in WHK over time.
WHK 3 cent rights issue, we are participating.
Jul 26, 2023
Jul 26, 2023 |
15 min
Our US based cybersecurity tech Investment, Whitehawk (ASX: WHK) is undertaking a rights issue at 3 cents and we hope this is at the bottom of the market.
WHK Quarterly: We are pleasantly surprised - here’s why
Jan 31, 2023
Jan 31, 2023 |
15 min
Our 2019 Technology Pick of the Year, Whitehawk Limited (ASX: WHK), has just announced its' quarterly results to the market. In the market announcement, we noticed a steady growth in revenue and sales of the cybersecurity products with a potential pipeline of new materialistic deals.
WHK to Thrive as Cybersecurity Takes Centre Stage
Dec 9, 2022
Dec 9, 2022 |
12 min
With all eyes now firmly on the cybersecurity industry, it’s the perfect time for our cybersecurity Investment WhiteHawk Ltd (ASX:WHK) to start announcing some of its long awaited large deals.
US braces for Russian Cyber Attacks in Response to Sanctions
Feb 25, 2022
Feb 25, 2022 |
10 min
Media has been reporting that sanctions placed on Russia by the US in the last 48 hours have sparked the real threat of imminent Russian cyber attacks on the US and our cybersecurity investment WHK is well placed to take support the increased urgency for cyber defences.
WHK comes out of hibernation with US$1.185M contract with the US Federal Government
Aug 20, 2021
Aug 20, 2021 |
6 min
After what has seemed like an eternity, one of our earliest investments and long term holds Whitehawk (ASX:WHK) has come out of a long “quiet execution mode” announcing a US federal government contract signing.
WHK extends US client contract
Jul 28, 2023
Jul 28, 2023 |
1 min
Today, our US focussed cybersecurity Investment, Whitehawk (ASX: WHK) announced that a US Federal Government client had extended its contract with WHK for a 4th year.
Up 20% on strong cybersecurity sales figures
Apr 29, 2022
Apr 29, 2022 |
2 min
Why timing is so important when investing in tech
Jul 29, 2023
Jul 29, 2023 |
11 min
In this weekender, we discuss how timing entry into a stock is no easy task, and we have learnt many lessons over our investing journey.
The stocks hit hardest by tax loss selling
Jun 17, 2023
Jun 17, 2023 |
12 min
Here we are, the final two weeks of June tax-loss selling. Those wanting to exit a stock and holding out for newsflow or a liquidity event are probably getting to the point where time is running out.
What happened at RIU Sydney?
May 13, 2023
May 13, 2023 |
15 min
This week we were at the RIU conference in Sydney, meeting our portfolio companies and looking at new investment opportunities. During this time, we saw Latin Resources (ASX:LRS) - our Brazilian Lithium Investment, have a nice little share price run. Let's dive in!
Tax loss selling over, market back in August?
Jul 2, 2022
Jul 2, 2022 |
19 min
Tax loss selling over, catalysts in, market back in August? A selection of 10 of the most beaten up stocks in our Portfolio in the last six months
The War Begins, Cybersecurity, Food Security, Energy Independence and Precious Metals
Feb 26, 2022
Feb 26, 2022 |
17 min
The Russian troop build-up had been happening for the last couple of months and we think the market had slowly been pricing in a potential conflict, especially one that could accelerate the “west versus east” tensions and all the ramifications that come with it.
