Expert analyst Darren Aftahi favors these 2 blockchain miners
In today’s “Expert Spotlight,” we’ll look at two top picks, Riot Blockchain (NASDAQ:RIOT) and Argo Blockchain (NASDAQ:ARBK) (GB: ARB), which senior Roth Capital analyst Darren Aftahi is optimistic about. Aftahi is the CEO of Roth Capital and an expert in the Internet, media and enabling technology sectors. Aftahi has extensive experience covering US and Canadian technology stocks.
According to the expert analyst, the main factors that can affect the performance of these blockchain miners include fierce competition, high electricity costs, the capital-intensive nature of mining, government regulations and the price of Bitcoin (BTC-USD).
Aftahi’s ranking among tipRanks experts
According to TipRanks’ Star Ranking System, Aftahi ranks #376 among all 7,998 analysts tracked on TipRanks.
Due to the recent weak performance of internet and media stocks, Aftahi’s overall success rate has fallen to 40%, with an average return of 18.10% over the past year. However, his calls during the same period generated an alpha of 9.20% and 8.10% over the S&P 500 (SPX) and the sector respectively.
To date, his best ranking has been at Digital Turbine Inc. (NYSE: APPS), which provides solutions for mobile operators, application developers, original equipment manufacturers (OEMs) and other third parties. Aftahi generated a whopping 800% return on his buy recommendation on APPS shares between the period of April 9, 2020 to April 9, 2021.
Riot Blockchain remains a top choice among BTC miners
Riot Blockchain is one of the largest US-based publicly traded bitcoin miners in North America. Riot is engaged in building, supporting and operating blockchain technologies. Amid the chaos in the cryptocurrency markets and a decline in the value of related currencies, RIOT has lost 66.5% so far this year.
In August, Riot produced 374 bitcoins, a 15% decrease compared to August 2021, while leveraging its proprietary power strategy to reduce overall power costs. As a result, Riot earned $3.0 million in power credits, which equates to approximately 136 bitcoins.
Notably, Riot sold 350 bitcoins in August for an amount of $7.7 million. By the end of August, Riot produced and held approximately 6,720 bitcoins. The company currently has a deployed fleet of 46,658 miners and a hashrate capacity of 4.8 exahash per second (EH/s).
Aftahi has a Buy rating on RIOT with a price target of $15, implying a huge upside potential of 96.6% to current levels.
Aftahi is particularly impressed with Riot’s debt-free balance sheet and strong liquidity position, which allows the company to consistently increase its hashrate. Also, the analyst is encouraged by Riot’s efforts to increase BTC holdings over the months and sell only a portion of BTC production.
In particular, Aftahi has consistently issued a buy recommendation on RIOT stock based on his belief in potential future growth. However, due to the market turmoil, his success rate on RIOT recommendations is 40%, with a negative average return of 18.55%.
Is RIOT a buy, sell or hold?
On TipRanks, RIOT stock has a strong buy consensus rating based on six unanimous buys. Riot Blockchain’s average price target of $14.83 implies an impressive 94.4% upside potential to current levels.
Aftahi remains optimistic about Argo Blockchain
London-based Argo Blockchain Plc is a global data center business that provides a powerful and efficient cryptocurrency mining platform. Like Riot Blockchain, ARBK stock has lost 51.1% so far this year.
In August, Argo produced 235 bitcoins, jumping 7.3% over July 2022 production. The company achieved a hash rate capacity of 2.5 EH/si in August. Also, with the installation of the new Bitmain S19J Pro machines at the Helios facility by the end of October, Argo expects the total hash rate capacity to increase to 3.2 EH/s. By the end of August, Argo had 1,098 bitcoins.
Notably, Argo also announced a new strategic hosting agreement with an undisclosed third party. Under the agreement, Argo will own and operate mining machines owned by the third party at the Helios facility and provide enough electricity to operate 10,000 mining machines. Argo will earn 25% of the net profit from the bitcoin mining from the hosted machines.
Aftahi has a Buy rating on ARBK with a price target of $10, implying a huge upside potential of 119.8% to current levels.
Our expert analyst is particularly encouraged by Argo’s new hosting deal and the possibility of having a fixed purchase price agreement (PPA) in place by the end of the year. Moreover, the increase in bitcoin mining and hashrate expansion remain favorable factors.
The only worrying factor for Aftahi is Argo’s falling mining margins in August to 20% (July 37%) due to the increase in spot electricity prices in West Texas to almost $0.09 per kWh. This represents almost a tripling of the increase in the average price in August over previous years. However, the fixed PPA should address this issue in the future.
Notably, Aftahi remains highly bullish on Argo Blockchain and has issued consistent Buy ratings on ARBK stock. Due to the disruptive factors affecting the cryptocurrency sector, his success rate on ARBK recommendations is only 10%, with a negative average return of 37.35%.
Is Argo Blockchain a buy or sell?
On TipRanks, ARBK stock has a strong buy consensus rating based on five unanimous buys. The average Argo Blockchain price forecast of $9.40 implies a whopping 106.6% upside potential to current levels.
Final thoughts
Aftahi has over 15 years of experience in equity analysis, risk arbitrage and investment banking with a focus on the technology, media and services sectors. Considering his impeccable track record, investors can choose to follow Aftahi’s investment choices to achieve reasonable returns. In particular, TipRanks accumulates the recommendations of several top experts, which can be considered while making investment choices to maximize returns.
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