Dear New World Investor:
Tuesday’s July retail sales report increased 0.7% from June, more than Wall Street’s estimates for +0.4%. Sales excluding auto and gas increased by 1.0%, well above estimates for +0.3% compiled by Bloomberg. June sales were revised up to +0.3% from +0.2%.
Not surprisingly, the Fed meeting minutes released Wednesday showed that most members were concerned about “significant upside risks” to inflation and suggested more rate hikes could be needed. “A couple” of participants indicated they favored leaving rates unchanged, noting “the possibility that the macroeconomic effects of the tightening in financial conditions since the beginning of last year could prove more substantial than anticipated.”
The NY Fed’s July Underlying Inflation Gauge was up 2.3% in July, the lowest level since August 2020, compared to +2.5% in June. It measures 215 subcomponents of CPI based solely on price change (it doesn’t include non-price measures). Inflation is much closer to the Fed’s 2% target.
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And Powell knows it. In his comments at the July 26 meeting, he said he wasn’t yet convinced on inflation to let off the gas because he needed to see leftover distortions from the pandemic on supply and demand ease. As, of course, they are doing.
Powell said: “So we intend, again, to keep policy restrictive until we’re confident that inflation is coming down sustainably to our 2% target, and we’re prepared to further tighten if that is appropriate.” Which it will not be because “the macroeconomic effects of the tightening in financial conditions since the beginning of last year could prove more substantial than anticipated.” As they always do.
Market Outlook
The S&P 500 lost 2.2% since last Thursday as the summer slump continued. Still, the Index is up a respectable 13.8% year-to-date. The Nasdaq Composite lost 3.1% but is up a more than respectable 27.2% for the year. The small-cap Russell 2000 lost the week, dropping 3.8% and is up a mediocre 5.0% in 2023.
The fractal dimension is rapidly consolidating the big upturn from last October’s low. This doesn’t feel good while it’s happening, but these consolidations are necessary to rebuild the fractal energy for the next push up.
Top 7
Changes this week: Added SCYX to Long-Term
Near-Term – chronological order
TGTX TG Therapeutics – Rapid recovery from overdone pullback
EQT EQT –natural gas price rebound
USL United States 12 Month Oil Fund, LP – crude should rise quickly
FCX Freeport McMoRan – copper shortage this fall
SFTBY SoftBank – for ARM IPO this fall
AKBA Akebia – Vadadustat NDA filing 2023; approval 2024
VLD Velo3D – Rapid revenue growth; low market cap
Long-Term – alphabetical order
EQT EQT – largest US natural gas company
GBTC Grayscale Bitcoin Trust – Bitcoin is headed for $100,000
NVTA Invitae – the winner-take-most of genetic testing
META Meta – a (the?) leader in the metaverse
RKLB Rocket Lab – #2 to SpaceX in space
SCYX ScyNexis –First new antifungal in 20 years
VLD Velo3D – Return manufacturing to the US
Economy
The Atlanta Fed’s GDPNow model is now forecasting blowout +5.8% real GDP growth in the September quarter. Both housing starts and industrial production are especially strong. The Blue Chip economists are up to +1.8%, revising their outlook in the right direction but lagging reality – as always. If 5.8% number is right, it will be the strongest quarter of GDP growth since December 2021.
Click for larger graphic
Coming Events
The summer doldrums are here.
Thursday, August 24
Short Interest – After the close
Big Tech: The Biotech & Digital Dominators MegaShift
There are at least four ways to make money in the stocks of these large, growing, dominant companies. You can:
* * Buy a stock and hold it
* * Buy a stock and write a call option against it
* * With a Level IV options account, write an out-of-the-money put option
* * With a Level IV options account, write an out-of-the-money put option and use part of the premium to buy an out-of-the-money call option
Apple (AAPL – $174.00) should be bought ahead of the iPhone 15 introduction on September 12 or 13. So says Citi, which said Apple stock typically performs well ahead of a new iPhone release and this year will be no different. I agree. AAPL is a Buy under $150 for new iPhone rollouts and augmented/virtual reality products.
Gilead Sciences (GILD – $76.50) and Tentarix Biotherapeutics announced three multi-year collaborations leveraging Tentarix’s proprietary Tentacles platform to discover and develop multi-functional, conditional protein therapeutics for oncology and inflammatory diseases. The molecules have the potential to conditionally target immune cells related to disease pathways without activating other immune cells that may create adverse events. It’s another on their many initiatives to turn into an oncology powerhouse. GILD is a Long-Term Buy under $80 for a first target of $120.
Small Tech
Enovix (ENVX – $13.89) probably noticed that EV maker Nikola has had to recall all its battery EV trucks and halt sales due to battery fire risks. Nikola suggested that owners of the $300,000 Class 8 semis park them outside for now. Gee, if only there was a lithium-ion battery technology that doesn’t spontaneously ignite. ENVX is a Buy up to $20 for a 4-year hold to $100+ as their BrakeFlow lithium-ion battery takes market share.
Primary Risk: A new competitor invents a better battery.
Fastly (FSLY – $19.12) acquired Domainr, an ICANN-accredited real-time domain availability API provider, and announced general availability of Certainly, their publicly-trusted TLS Certification Authority for Fastly customers. These add significantly to Fastly’s edge cloud platform, creating a global web infrastructure that is more accessible, trusted and secure. FSLY is a Buy up to $20 for a 2- to 5-year hold to $80+ as Compute@Edge drives customer acquisition and revenue growth.
Primary Risk:Content and applications delivery networks are a competitive area.
QuickLogic (QUIK – $7.60) reported a lousy June quarter. Revenues fell 35.7% from last year to $2.92 million, badly missing the $5.0 million consensus estimate. The pro forma loss of 12¢ a share compared to the consensus estimate for a one-cent loss.
The problem was just the timing of the award for the next phase of the large eFPGA contract they announced last year. The $6.9 million first phase of the contract was completed successfully. The next phase, with a total value of $15.0 million, is now in place and will begin generating revenue this quarter, with revenue extending into 2024.
This second phase is the same total value, revenue recognition timing, and duration they had been expecting to finalize during the June quarter. It was delayed, but not reduced or canceled.
On the conference call (TRANSCRIPT HERE), management said their sales funnel grew to over $140 million in the quarter, the largest in QuickLogic’s history.
They still expect to be grow total 2023 revenue by more than 30% over 2022. They expect to report non-GAAP profitability for the September and December quarters as well as non-GAAP earnings for the full year 2023. They guided for $6.5 million of revenues in the current quarter with a 75% pro forma gross profit margin producing 9¢ to 16¢ per share. That report will move the stock.
They ended the quarter with $20.6 million in cash. Although this quarter was a short-term disappointment, the stock is up a few cents from Monday’s close in spite of the broad market weakness. I still think Brian Faith is one of the best hands-on CEOs in Silicon Valley. QUIK is a Buy up to $10 for my $40 target as their sensor hub is widely adopted in smartphones, tablets and wearables.
Primary Risk: New sensor hub competitor emerges.
Rocket Lab USA (RKLB – $5.56) did a fireside presentation at the BofA’s SMID Cap Conference (ZOOM HERE). It offered a useful insight on how management thinks.
They signed a two-launch Electron deal with NASA to deliver the Agency’s climate change research-focused mission, PREFIRE, to low Earth orbit in 2024.
A Barron’s article said since you can’t buy Elon Musk’s SpaceX yet, so buy Rocket Lab. Precisely. According to @BryceSpaceTech, SpaceX lifted nearly 10 times as much mass to orbit in the June quarter as its closest competitor, the nation of China. Rocket Lab, which specializes in lighter-weight Low Earth Orbit satellites, made the list.
Click for larger graphic
RKLB is a Buy up to $13 for my $30+ target as low earth orbit satellites and space exploration grow.
Primary Risk: A new competitor emerges.
Biotech MegaShift: The $20-For-$1 Stocks
Say you put $2,000 into a stock that goes from 50¢ a share to $10. The $2,000 turns into $40,000. Then you put the $40,000 into another stock that goes from 50¢ to $10. That turns the $40,000 into $800,000. You did it with two stocks and never risked going negative more than $2,000. (Not that you won’t be mad at me if the first one works and then the second one doesn’t, taking your $40,000 to Money Heaven.)
If you can afford it – and it would not be too big a position in your portfolio – putting $2,000 into each of these speculative biotechs might be a good way to start. Buying these out-of-favor, fallen, or forgotten companies that can get important products through the FDA at very low market capitalizations seems like a good strategy to me.
Risks
Development-stage biotechs are subject to investor sentiment swings from wildly optimistic to excessively pessimistic – mostly the latter recently. After the Primary Risk for each company, I’ve added the clinical stage of their lead product, the probable time of their first FDA approval, and the probable time of their next financing.
As always, you need to think about an appropriate position size. You could buy a full position upfront and then just hold on, or buy some upfront and leave room to add more on the inevitable financings, transient clinical trial setbacks, and the like.
Akebia Therapeutics (AKBA- $1.25) filed a new Form 12b-25 saying: “In the course of preparing its financial statements for the quarter ended June 30, 2023, the Company identified certain accounting errors relating to recording and reporting of return reserves for the Company’s product, Auryxia (ferric citrate) (collectively, the “Return Reserve Errors”) in financial statements previously filed by the Company with the Securities and Exchange Commission (the “Commission”) for the fiscal years ended December 31, 2022, 2021 and 2020 and the quarter ended March 31, 2023. The Company requires additional time to complete its assessment of its internal control over financial reporting, and to prepare a complete and accurate Form 10-Q for the quarter ended June 30, 2023 due to the Company’s ongoing assessment of the Return Reserve Errors.” Well, that’s not good, but I suspect it’s minor.
As I said last week, they reaffirmed 2023 net product revenue guidance of $175 million to $180 million. They said their cash resources will fund the current operating plan through at least the next twelve months. They still expect to resubmit the New Drug Application (NDA) for vadadustat in the current quarter. Buy AKBA up to $2 for the vadadustat lunches in the EU, UK, and (after FDA approval in 2024) the US.
Primary Risk: Vadadustat not approved in the US.
Clinical stage of lead product: Vadadustat NDA to be refiled
Probable time of next FDA approval: Mid-2024
Probable time of next financing: Late 2024 or never
Arch Therapeutics (ARTH – $1.65) filed their June 10-Q, and it was another lousy quarter. They got a great product approved on a shoestring and nobody wants it. I thought avoiding amputation would be doctors’ and patients’ priority, but apparently I was wrong.
Revenue of $13,293 was less than the $16,654 reported for the March quarter and again had a negative gross profit margin. They slashed selling, general and administrative expenses from $1,252,786 in the March period to $870,053, a $382,733 reduction. But they finished June with only $86,542 in cash, in spite of another $998,015 coming in from “Proceeds from shareholder advances.” They are showing a balance sheet item of $690,015 for “Shareholder and Third-Party Advances related to Bridge Financing.”
On July 7 they raised about $1.65 million selling 1,749,245 shares of stock and 4,995,100 prefunded warrants in a bridge offering, supposedly to uplist to Nasdaq. But they can’t do that unless the stock is over $4 a share. So the Board has authorized another reverse split between 1.5-for-1 and 20-for-1, subject to shareholder approval. ARTH is one of the worst recommendations I’ve ever made. It remains a Hold for a buyout.
Primary Risk: AC5 fails to sell or the internal trial fails.
Clinical stage of lead product: External approved. Internal trial 2023
Probable time of first FDA approval: External done. Internal 2024
Probable time of next financing: March or June 2023 quarter
Compass Pathways (CMPS – $8.40) did a big private placement led by two healthcare specialist investors, TCGX and Aisling Capital. They got $125 million financing upfront with up to an additional $160 million tied to exercise of warrants. They sold 16,076,750 units of one share plus one warrant for $7.78 each. The warrants are exercisable at $9.93.
I had expected a financing in late 2023. This extends their cash runway to late 2025, which possibly is past FDA approval.CMPS is a Buy under $20 for a very long-term hold to a 10x.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 2
Probable time of first FDA approval: 2025
Probable time of next financing: Late 2025
Invitae (NVTA – $1.10) published results from their Proclaim trial in European Urology Oncology, showing that almost half of prostate cancer patients with clinically actionable pathogenic and likely pathogenic germline variants (PGVs) could be missing out on genetics-informed care due to restrictive criteria for genetic testing.
The principal investigator, Neal Shore, M.D., F.A.C.S., from the Carolina Urologic Research Center, said: “Real world evidence suggests that less than 15% of prostate cancer patients who could benefit from genetics-informed care undergo genetic testing, in part due to complicated and prohibitive testing guidelines. We found no statistically significant difference in the diagnostic yield of PGVs between those who met NCCN guidelines and those who did not, suggesting there are a significant number of patients with PGVs, many of which are targets for precision therapies, who are being missed when adhering to current NCCN guidelines for genetic testing.”
Buy NVTA under $10 for a first target of $50 and eventually $100+ when they become the Amazon of genetic testing.
Primary Risk: A competitor starts taking significant market share.
Clinical stage of lead product: NM
Probable time of first FDA approval: NM
Probable time of next financing: Not needed
Medicenna (MDNA – $0.39) opened a Boston office, hiring Brent Meadows, MBA, as Chief Business Officer. He has over 25 years of business development, commercial strategy, and marketing experience at large pharma and biotech companies, including Johnson & Johnson, Bristol-Myers Squibb, and Regeneron. I suspect his Job #1 is getting a licensing deal for MDNA55. Buy MDNA under $3 for a first target of $20, then maybe $40.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Entering Phase 3
Probable time of first FDA approval: 2024
Probable time of next financing: March 2024
ScyNexis (SCYX – $2.77) reported June quarter revenues up a ridiculous 9,862.1% from last year to $131.5 million, thanks to $130 million in licensing payments from Glaxo SmithKline. That was $36.1 million ahead of the consensus because ScyNexis got another $25 million milestone payment from GSK related to the hospital clinical trials. They earned $2.46 a share – almost as much as the stock sells for (!) – clobbering the $1.45 estimate.
The company said: “With cash, cash equivalents and investments of $91.9 million as of June 30, 2023, and future receipt of the $25 million development milestone from GSK, SCYNEXIS anticipates modest near-term spending and a projected cash runway beyond two years.”
It’s important to realize that ScyNexis now is a development-stage company with a next-generation fungerp, SCY-247, headed for human trials in 2024 and a boatload of incoming cash from the GSK license of ibrexafungerp. I expect GSK to buy ScyNexis for ~$50 a share when SCY-247 is in or completes Phase 2 trials. Everyone should own this stock. Buy SCYX under $2.50 for a first target price of $20 after ibrexafungerp is approved for hospital use and a buyout at $50.
Primary Risk: Ibrexafungerp fails to sell.
Clinical stage of lead product: Approved
Probable time of next FDA approval: 2023/2024
Probable time of next financing: Never
Inflation MegaShift
Gold ($1,918.30) continues to trade under $1,950 while central banks load up.
Click for larger graphic h/t WinfieldSmart CFA
Guess what’s next? The fractal dimension shows the consolidation of the last upturn rolls on and is getting close to the fully consolidated 55 level. I think we are setting up for a Fall/Winter rally that will make all those central banks look smart.
Miners & Related
First Majestic (AG – $5.86) closed its deal to sell the La Parrilla Silver Mine to Golden Tag Resources (GTAGF). First Majestic got 143,673,684 common shares of Golden Tag worth $11.5 million plus up to $13.5 million in three milestone payments of either cash or shares in Golden Tag. It was a small deal for a retired mine. AG is a Buy under $11 for a $23 next target price as production increases and the price of silver rises.
Primary Risk: Prices of precious metals fall due to US dollar strength.
Cryptocurrencies
Cryptocurrencies are a diversifying asset that offer a unique opportunity to make (or lose!) a lot of money quickly. You can easily buy bitcoin and other cryptocurrencies at Coinbase, Block, or Robinhood.
Bitcoin (BTC-USD on Yahoo – $27,790.47) dropped below $28,000 for the first time since June after another SEC stall in approving a spot bitcoin exchange-traded fund. They postponed a decision on Cathie Wood’s proposed ARK 21Shares Bitcoin ETF “for further public comment” on one aspect of ARK’s application. Yeah, right.
Click for larger graphic
BTC-USD, ETH-USD, GBTC, and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Grayscale Bitcoin Trust (GBTC- $18.53) still is selling at a 26.0% discount to net asset value. Any day now, the Court of Appeals for the D.C. Circuit is expected to decide whether the SEC erred in its reasoning for denying Grayscale’s bid to convert GBTC, which has $18.3 billion under management, into an exchange-traded fund. The judges on the case sounded skeptical in a March hearing about why the agency could treat applications for Bitcoin futures ETFs differently than those for spot Bitcoin. GBTC is a Strong Buy under net asset value.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Oil – $80.11
Oil prices ended a seven-week winning streak, but it’s increasingly clear that the recent gains are no fluke. Physical markets around the world have shown signs of robust demand, US commercial oil inventories are at the lowest since January and top buyers in Asia have been on a crude-buying spree. Oil demand hit a record in June and is on track to stay at high levels for the rest of the year, according to the International Energy Agency. Average oil demand is likely to hit a record 102.2 million barrels a day in 2023. They said that strong summer air travel has been a big reason behind the surge in fuel demand.
The IEA said oil demand rose to 103 million barrels a day in June, outpacing supply of 101.8 million barrels, and supply fell by another 910,000 barrels a day in July – a huge one-month decline. OPEC exports are way down, as the Saudis and Russians promised.
Click for larger graphic h/t @HFI_Research
The IEA’s latest oil supply and demand balance forecast is out, and it looks like much higher oil and fuel prices are coming:
Click for larger graphic h/t IEA & @HFI_Research
US Storage is way down, which also is true of most developed countries.
Click for larger graphic h/t IEA & @HFI_Research
UBS expects oil to hit $91 by the end of this year due to record demand and tightening supply. Meanwhile, hedge funds hate energy stocks. What could go wrong?
Click for larger graphic. h/t Goldman Sachs via @Mayhem4Markets
The July 2026 Crude Oil Futures (CLN26.NYM – $68.50) are a Buy under $65 for a $200+ target. Only buy futures for all cash; do not use margin.
The United States 12 Month Oil Fund, LP (USL – $36.74) is a Buy under $35 for a $100+ target.
EQT (EQT – $42.90) was cleared by the FTC to complete the Tug Hill and XcL Midstream acquisitions. CEO Toby Rice said: “This acquisition will lower EQT’s cost structure, reduce EQT’s development risk, and increase cash flow and net asset value per share, while maintaining our investment grade balance sheet.”
EQT is a buy under $35 for a first target of $70 and a long-term hold for much higher prices.
Primary Risk:Natural gas prices fall.
Energy Fuels (UUUU – $6.24) reported March quarter revenues up 6.0% from last year to $6.86 million, ahead of the $5.96 million estimate. They lost three cents a share, more than the one-cent loss estimate.
On the conference call (CORPORATE PRESENTATION HERE and TRANSCRIPT HERE), management said they sold 80,000 pounds of uranium to a major US nuclear utility for $4.34 million ($54.19 per pound), resulting in a 46% gross profit of $2.00 million, and 127 metric tons of rare earth elements (REE) carbonate for $2.27 million.
At the end of June they held $32.98 million in inventory, including 766,000 pounds of finished uranium and 403,000 pounds of uranium as raw materials and work-in-progress. They also had 906,000 pounds of finished vanadium oxide and one- to three-million pounds of solubilized vanadium oxide in tailings solutions that could be recovered in the future. They had 37 metric tons of finished high-purity, partially separated mixed REE carbonate.
At current prices, their inventory is worth $22 million more than is shown on the balance sheet. It is a hidden asset. They are well-positioned in uranium:
Click for larger graphic
And rare earth elements:
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As China tightens the screws on rare earth exports, UUUU will soar.
Click for larger graphic
They finished the quarter with $99.7 million in cash. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.
International & Other Recommendations
Acreage Holdings (ACRDF – $0.21) reported their 10th straight quarter of positive pro forma EBITDA (Earnings Before Interest, Taxes, Depreciation & Amortization), including record revenue growth in their focus states of New Jersey and Connecticut. June quarter revenue was up 3.8% from the March period to $58.1 million with adjusted EBITDA of $6.8 million.
But what’s important here, and what is driving the stock, is the impending merger into Canopy USA and Canopy Growth (CGC). The price of marijuana has collapsed as the capital that poured into growing it far outran the near-term demand. I’ve been looking for a large acreage parcel in southern Oregon, and it’s very common to find abandoned marijuana grows. I saw one recently, 150 acres for $495,000. They bought it as bare land for $295,000 five years ago and invested $2 million in roads, electric power, six wells, about a dozen greenhouses, and various outbuildings. Now completely abandoned.
Canopy Growth (CGC) has collapsed, too, but Constellation Brands still controls them and will buy them out in the next year or two. ACRDF is a buy under $2 for a hold for the Canopy Growth merger and beyond.
Primary Risk: Canopy Growth does not acquire the company.
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Click for larger graphic
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Click for larger graphic h/t WinfieldSmart CFA
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Founding Editor
New World Investor
All Recommendations
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Buys
These are the stocks everyone needs to own because transformative events are happening over the next year or two, and I expect to hold them long-term.
Tech Dominators
Apple Computer (AAPL – $174.00) – Buy under $150 for new iPhones
Corning (GLW – $32.02) – Buy under $33, target price $60
Gilead Sciences (GILD – $76.50) – Buy under $80, target price $120
Meta (META – $285.09) – Buy under $250, target price $400
SoftBank (SFTBY – $22.02) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $13.89) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $46.91) – Buy under $40; 3- to 5-year hold
Fastly (FSLY – $19.12) – Buy under $20; 2- to 5-year hold to $80+
PagerDuty (PD – $23.41) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $7.60) – Buy under $10, target price $40
Rocket Lab (RKLB – $5.56) – Buy under $13, target price $30+
Velo3D (VLD – $1.43) – Buy under $6, target price $50
$20-for-$1
Akebia Biotherapeutics (AKBA – $1.25) – Buy under $2, target $20
Aptose Biosciences (APTO – $4.60) – Buy under $10, ultimate target $300
Compass Pathways (CMPS – $8.40) – Buy under $20, hold a long time for a 10x return
Inovio (INO – $0.45) – Buy under $7, hold a long time
Invitae (NVTA – $1.10) – Buy under $10, first target $50, then $100+
Medicenna (MDNA – $0.39) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $2.77) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $10.39) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($22.73) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $23.51) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $26.41) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $17.70) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $24.84) – Buy under $30, target price $50
Coeur Mining (CDE – $2.50) – Buy under $5, target price $20
First Majestic Mining (AG – $5.86) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.30) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.06) – Buy under $10, target price $25
Sprott Inc. (SII – $32.29) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $27,790.47) – Buy
Grayscale Bitcoin Trust (GBTC – $18.53) – Buy
Ethereum (ETH-USD – $1,614.72) – Buy
Grayscale Ethereum Trust (ETHE – $10.34) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $68.50) – Buy under $65; $200+ target
United States 12 Month Oil Fund, LP (USL – $36.74) – Buy under $35; $100+ target
EQT (EQT – $42.90) – Buy under $35; $70 first target
Energy Fuels (UUUU – $6.24) – Buy under $8; $30 target
Freeport McMoRan (FCX – $39.60) – Buy under $44; $65 target within two years
International & Other Recommendations
EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $30.02) – Buy under $38 for a $66 target in 12 to 18 months
KraneShares Bosera MSCI China A Share Fund (KBA – $23.21) – Buy under $40 for a three- to five-year hold
Morgan Stanley China A-Shares Fund (CAF – $12.71) – Buy under $18 for a three- to five-year hold
KraneShares CSI China Internet ETF (KWEB – $27.87) – Buy under $40 for a double over the next three years
Acreage Holdings (ACRDF – $0.21) – Buy under $2 for the Canopy Growth merger
Mongolia Growth Group (MNGGF – $0.90) – Buy under $1.30; long-term hold
Holds
These are holds but not sells – yet. They could get moved back to one of the buy categories if their prices drop or outlook improves, or they could become sell recommendations in the future.
Arch Therapeutics (ARTH – $1.65) – Hold for buyout
Graphite Bio (GRPH – $2.54) – Hold until they update their strategy
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First
2nd
MM,
Do you think Brent Meadows can get a licensing deal for MDNA55 by October so we can avoid a reverse split on Medicenna?
Probably not. The fact that none has happened yet probably means it’s going to take time.
So are you saying that a R/S is on the horizon?
More chances of seeing a World War 3 or UFO landing for all to see before long held stocks like AKBA, NVTA , INO etc take off !
Ok if I put this in the August 15, 2024, Radar Report a year from now?
8/17/23 close:
AKBA$1.25
NVTA $1.10
INO $0.45
YES PLEASE. All will be penny stocks or out of business in a year.
MM–thanks for your interesting post at the end of the last board on top 15 3D printing companies. VLD is #11, pretty good. GE is #1 by a mile, Xerox is #2. Is VLD the high end of product quality, or do GE or the other top companies challenge or beat VLD for quality? Lazerator and other bears fret that VLD has only made ONE sale in Q3, half over. Backlogs were used to book sales up to Q2, but they are gone now. Are other companies getting sales for high end products?
Lazerator says he bought some VLD at the bottom yesterday at $1.34. He could have created the extreme negative sentiment that suited his purposes. When extreme negative sentiment turns less negative as today, that’s a good sign.
No one else can produce the high-precision parts that Velo3D can, so their market grows with that demand – space, aircraft, defense, etc.
I agree. Gas , oil and fossil fuels are heading higher. Ukraine has now blown up a Russian tanker using drones. And that success will breed more of the same in Russia’s future. Not to mention now Saudi Arabia has plans to cut back production even further. China has very serious problems. US companies are leaving China in droves . Up to 20 percent of China’s younger population is unemployed aka NOT working. Xi is going to do everything he can to shift attention away from his failed leadership, including attacking Taiwan. Can you say severe social unrest? Just look at the amount of saber rattling coming out of China over the last few weeks. A four star general recently publicly stated we would be at war with China by 2025!! When top leaders in the world’s second largest economy get overwhelmed by the stress and tension of running such a complex and difficult society crazy happens. IMO
Wrong. Damage to the tanker was small and repairable. These are NOT Ukrainian drones but NATO drones. All the long distance artillery (Himars) and drone strikes of the VSU (Ukraine AF) are carried out with NATO equipment and guidance (C4ISR) possibly with NATO personnel/officers on the ground under the cover of contracts (mercs). We are de facto at war with Russia already and very close to a risky nuke confrontation that would spell the end of the planet.
But even if the conflict remains conventional we seem to have run out of 155mm artillery shells to give the Ukraine and have nothing left for ourselves. We also depleted our stocks Javelins and Stinger ManPads missiles and many other weapons systems. (Except for the Bradleys and their 25mm Autocannon shells, we got plenty of both). Our defense budget is a gargantuan $850billion/year but we have no ability to make tanks any longer as all of the production lines have been shut down. On the contrary, Russia makes 1600 new T-80s and T-90s a year and has inherited an enormous military industrial complex from the Soviet times that is still there and now cranking out prodigious amounts of ammo, missiles, tanks, IFVs, ships, nuke subs and Hypersonic Missiles which we still do NOT have let alone deployed (Russia has actually successfully used them in Ukraine to destroy our Patriot AD batteries among other targets).
We always read on WaPo, NYT or WSJ that if we were in Ukraine our offensives would succeed against the Russian Army because we would achieve Air Superiority from the getgo. Really? How would Maverick do in an environment replete with BukM2, BukM3, S1 Pantsir, S-350 Vityask, S-300, S-400, all run in net-centric mode? Assuming he can survive for 20 minutes and launch his payload, where is he going to land if in the meantime his base in Poland or Rumania has been flattened by a large salvo of Iskanders, Kinzhals and Zircons and a swarm of long range Lancet drones?
Our armed forces have been created and run to fight expeditionary wars against less developed and equipped adversaries (Iraq) but not peer type superpowers like Russia. Many at the Pentagon know this; hopefully negotiations will start soon.
Hey Captain,
Your analysis borders on hilarious. Your “superior” Russian military often has shown itself to be an underwhelming force including unmotivated, drunken prisoners, quickly assassinated or replaced generals, using hardware with many poorly sourced parts that failed in combat. They were unsuccessful in Afghanistan, and only successful after a decade of fighting Syrian and Chechen uprisings facing minimal military might, big deal. Most military analysts were surprised at how poorly the Russians have done in Ukraine so far. Except you of course. But its only year 2 of maybe 10 year conflict like other places?? Your claim that US supplies are depleted and Russian factories are running like a charm are just plain BS. Who do you think you are kidding? Why are you pushing this nonsense? First you tout your preferred book you read, whose author is a twice convicted child molester. You must know what Russia does with people with weaknesses….give them what they want, document, then extort their “cooperation.” So your favored author is compromised, not a reliable information source. Not to mention his serious underlying character issues.
Your overconfident claims about the “superior” Russian AF haven’t been borne out with their failure to control the skies over a third rate military power like Ukraine. Your claims about Russkie hypersonic missiles being incapable of being shot down turned out in some situations to be false. We shall see what happens starting next Spring when Ukrainians have F-16s. You’ve already predicted it will be a disaster with the almost unlimited number, variety and power of superior Russian missiles. We shall see.
Oh and you forgot to mention the Russian focusing attacks on civilian targets, raping women and children, destroying water and grain supplies, executing prisoners, kidnapping and “retraining” children, and shooting their own soldiers who question whether whether they will go on suicide missions. Do you support these war crimes? Why not mention?
Something like 100,000 educated men fled Russia to avoid service in this war. Sanctions have had a major effect on the Russian economy. Russia is being isolated. Funny you haven’t mentioned those troubles. Rather one-sided propaganda you speak. You aren’t being realistic. What’s your motivation here??
The one place we agree is “hopefully negotiations will start soon.” Unfortunately they should have started a year or two ago. Putin was overconfident and deluded by his information sources, despite his background. He should have known better, but he wanted a bigger place in history and doesn’t give a care about all the people he has slaughtered…military, civilian, children. And can’t imagine a dignified exit, maybe because there isn’t one.
Hey Oppio,
You had disappeared I thought something might have happened to you. Instead, you seem to have feasted on huge amounts of Kyiev regime propaganda recycled by the likes of CNN, MSNBC, WaPo, NYT etc. Good for you!LOL
Nothing wrong if it makes you feel better but what happens in your head has nothing to do with reality.
I have no idea about the Frontline as I am not part of the General Staffs in Moscow or Kyiev, but I try to read the propaganda on both sides and then pick and chose. I have my methods and a huge library of military history covering the last 5000 years but particularly the 20th century and the Eastern Front in WW2 to help me with the task.
I could rebut your points one by one but it would be a waste of time; let me just say that you have a memory problem as the book I quoted was NOT written by the individual that you are depicting as scum of the earth without mentioning the name (chicken!). You evidently have not read the first book, or the following 2, as you would be a LOT more cautious in some of your wrongheaded comments. BTW, he is writing a 4th one and believe me a lot of people in the Pentagon, US War College, DIA etc. are going to read it as much as they are following him on his blog.
I know you live on a Fantastical Planet so let me just help you by depicting a possible (high prob) scenario of what’s coming next.
The Russian Army could continue to attrite the VSU indefinitely by sitting in its current positions along the 1000 miles frontline, in defensive mode while engaging in small offensives here and there. This strategy, while very effective, will not bring a short term resolution to the conflict and an Ukraine unconditional surrender. That is why, as the Ukraine is committing its last well trained and armed reserves (82nd Brigade and others) to the Orikhiv salient and is left short of logistical resources and ammo, sometime next week or the beginning of September Russia will launch a 3 pronged massive offensive. From Belarus, Wagner will enter Ukraine and lay siege to Chernigiv. A powerful armored fist will move on a SW axis between Sumy and Karkhov and a third will launch an offensive from the South towards Zaporizah and Dinipro. A retired Polish army Colonel came up with this “Trident” offensive scenario and imho is the one that makes the most sense. We are VERY close to the start as Putin visited the SMO HQ yesterday for meetings.
Forget about the F-16s and the 6 Ukrainian pilots that need to learn English. Hopefully they will stay alive. Project Ukraine will soon be over and, like we did in Afghanistan, we shall throw them under the bus, discard them like a used condom.
What is this book you guys are talking about? Russia is losing a lot more soldiers than Ukraine. Unfortunately, not enough more. Ukraine would have to score at LEAST 3x as many Russian casualties as Ukraine is having to have a chance at “winning”. The fake “Wagner march on Moscow” was indeed just disinformation to distract from the repositioning of Wagner troops to Belarus. Then again, the Iranian Prisoner Swap was just disinformation to distract from the real deal which was the elimination of sanctions on Iranian oil which will hurt Russia’s oil revenues. If anyone wants to see why Ukrainians are fighting as they are, watch “Mr. Jones” on Amazon. I just hope Ukraine can hold on until Hijo de Puta Putin dies and then maybe his sick dreams will die with him.
Sorry wrong, in some battles Ukro losses are 17x the Russian ones as befits an Army constantly on the offensive for propaganda reasons and against an entrenched enemy with 10x the artillery.
When the history of this conflict is written and the true losses are revealed it will be a horrific shock. Ukraine will potentially have lost 500,000+ dead and 1,000,000+ WIAs.
An avoidable tragedy and a war crime if one considers that in March/April 2022, after a month of hostilities, a DEAL had been reached in Instanbul that was soon busted by Boris Johnson rushing to Kyiv under orders from Biden and the Neocons in DC to convince Zelensky to tear up the agreement, which he unfortunately did.
Let me see if I understand some of your assertions:
1. We should not believe official US government statements about our remaining stockpiles of weapons, Russian and Ukrainian weapons loss estimates, casualty counts, etc. ??
2. We should assume that the US military, despite being overall best in the world, is deceived or is deceiving us about its stockpiles, and the war in Ukraine, and our (and our allies) military capabilities.
3. We should assume that NATO is lying, and fighting the war inside Ukraine. Its not just member states providing training and hardware to Ukraine, who is fighting the Russian invasion.
4. We should assume that the largest, most popular, most established media in the US is all wrong, as well as the media from the most advanced European societies. Instead, we should assume that some of your obscure authors with unsavory backgrounds offer the best insights into the war in Ukraine and military capabilities of Ukraine, Ukrainian allies and Russia.
5. We should assume that if we oppose Russia, the entire world will be destroyed because Russia would obliterate us all in a nuclear attack. So best to just let them have Ukraine back under their control. Or whatever they want??
6. We should assume that the Russia-friendly statements about US stockpiles are correct, and that stories about Russia needing artillery shells from North Korea, drones from Iran, parts from China, etc., are just false propaganda?? Russian supplies and factories are in fine shape? Many draft-eligible Russian citizens are not abandoning their country rather than risk being drafted to fight in their invasion of Ukraine? RT is not Russian state propaganda TV, it accurately reflects the reality of the Russian invasion of Ukraine?
7. We can ignore the Russian military attacks on Ukrainian civilians, civilian housing, hospitals, schools, civilian electricity and water supplies, grain, and the use of rape as a weapon of war and terrorizing the population? Kidnapping Ukrainian children en masse and “re-educating” them in Russian programs to be transferred to Russian citizenship and allegiance is actually saving those children from being casualties in the Russian attacks on Ukraine? These are not war crimes or atrocities? Russia has a right to do this, because its only one more example of formerly occupied satellite nations rejecting Russian control?
8. We should only believe you, your preferred authors (including the convicted child molester apparently compromised by Russia) and your preferred information sources (Russian propaganda)?? The dominant media in the US and Europe should be considered no more accurate than Kremlin government-controlled media? Or that pro-Putin authors and information sources are accurate and reliable?
9. You claim to read “propaganda from both sides” but only repeat the pro-Russian storyline. So how is it that your pro-Russian, anti-NATO, negative US and US media statements are somehow “balanced” in your diatribes?
Despite all your fancy English, long lists of military hardware, and massive self-confidence, your underlying conclusions seem out of touch with reality. Just because your ideas differ from the mainstream and grow from unpopular sources doesn’t prove you have some unique accurate insights. And given the choice between the statements of the US government, US military, NATO, major governments of Europe and the duly elected government of Ukraine vs. the Russian state-controlled media and a few Russia friendly (Russia compromised?) sources, just about any sensible person would listen more to the former and not blindly accept the statements of the latter.
I don’t remember the name of your preferred author you cited in previous diatribes, that was twice convicted of child molesting. But you do, and trust his analysis. So since you call people “chicken”, maybe you should be brave enough yourself to repeat that author’s name and his book title, since someone else specifically asked. Or maybe admit you won’t state his name again, because you are chicken and trying to avoid mentioning your past post. Or Murphy or subscribers could repost the name via New World Investor archives if you are too chicken to remind us.
Watched a good movie on Amazon the other night, “Mr. Jones,” about Gareth Jones, a Welsh reporter who interviewed Hitler in the early 1930s and warned people that he was a serious threat to peace in Europe, then went to Moscow to interview Stalin. The NYTimes reporter, Walter Duranty, was living a debauched life in Moscow while being fed Russian propaganda and writing about how wonderful Stalin’s regime was. Even when presented with Mr. Jones’ eyewitness accounts to the contrary, the Times stuck to Duranty’s reporting calling Mr. Jones’ reporting “a big scare story.”
No way did El Capitan imply that Putin’s regime is wonderful ala Stalin. He just presented some military analysis from people he follows. But the NYT had blood on its hands for publishing the praises of a murderous Stalin regime, and ignoring eyewitness accounts, stubbornly insisting that the Welsh reporter’s claims were a big scare of “misinformation” in the language of today.
If you have time (I don’t, because I am involved in more important intellectual pursuits), check out Mark Levin’s claims in UNFREEDOM OF THE PRESS that the NYT suppressed news about Nazi oppression.
Opie what are your thoughts about what Jake Trapper confirmed on CNN that Hunter and the Big guy have been on the Ukrainian payroll? Do you believe the Whitehouse doesn’t know who the cocaine really belonged to?
Your obsession with the sex-offender (who in the meantime served his time) is remarkable. I am not going to offer any names but remind you that you have a memory issue as he is one of a plethora of analysts I follow then there is a 2nd person, former Soviet Navy now a US Citizen who has written 3 books and coming out with a 4th one.
“This war could have been avoided and it is happening because of a tiny group of US officials with too much power, the Neocons, who want war at all costs.” Yes, this war could have been avoided. Russia could have not sent troops towards Kiev from Belarus. It is happening because Putin dreams of restoring the Russian empire by once again crushing Ukraine as a first step and then the Baltics, Poland and who knows how much more. Just like Hitler didn’t stop by taking over the Saarland, Rheinland, Austria and the Sudeten, Putin would not stop at Ukraine if permitted to seize it without a fight. Or perhaps you believe we should also abandon NATO and that nothing is worth defending.
You are accepting uncritically some basic current anti-Russian propaganda while missing some major parts of the recent historical record.
Minsk 1 and 2 were agreed upon and signed. Zelensky was elected in 2019 on a platform promising to implement Minsk2. He never did; more damningly, Angela Merkel, who with Sarkozy became a signatory and guarantor of that agreement, recently admitted that NATO carried out those negotiations just to give themselves enough time to build up the Ukrainian Army, VSU, between 2015 and 2022…talk about bad faith!!!!
So Putin continued to develop advanced weapon systems and modernizing his armed forces himself while negotiating, just in case.
Also, equating him to the Reich chancellor or some kind of Peter the Great reincarnation feels quite ludicrous; the man is extremely cautious, unemotional, approaches problems very deliberately and prefers jurisdictional/legalistic paths to internal/external policies when available.
A style that has worked for him given his 70%+ approval rating in Russia. Neither he, nor anybody else in the Kremlin I am sure wants to take, conquer, subjugate Ukraine west of the Dnieper the land of Stepan Banderas’ Nazi grandchildren let alone Poland or the pipsqueak Baltic Republics. (They will NOT, however, tolerate provocations regarding Kaliningrad or Transnistria).
And apparently they would have kept Crimea for Russia because of Sevastopol but would have gladly left the Donbass in the Ukraine with a degree of autonomy and guarantees that ethnic Russians would not be beaten, tortured, killed or become artillery targets and could continue to speak Russian. Maybe I am wrong but it appears that Putin and Lavrov were negotiating Minsk2 in good faith.
They were evidently hoping that Ukraine would see the light and become not a vassal state but a neutral one, like Austria and Finland during the Cold War, benefiting politically and economically in the long run like those to countries did.
LOL!!! So it was bad faith to build up the VSU but not for Putin to build up and develop his military…and to take Crimea…The “extremely cautious, unemotional, very deliberate” Putin 😉 so badly miscalculated that his oil revenues have shrunk, NATO has expanded and now the Ukrainian flag has again flown over Crimea.
Crimea is 90% Ethnic Russian FYI. It has been Russian for Centuries and only assigned to Ukraine for administrative purposes during Soviet Times.
We insist with our puppet Zelensky to retake it because the US Navy wants Sevastopol and, with that, domination over the Black Sea.
His oil and gas revenues are through the roof and the economy is expanding despite all of the sanctions. You are fact-challenged and have been brainwashed by all of the absurd propaganda.
Be careful in cheering all the warmongering as one of these days the Draft may be re-instituted and perhaps one of your family members will have to fight and die in one of the forever wars.
A China attack on Taiwan might be less likely due to domestic China economic stress. Sensible countries don’t engage in stupid wars which are costly in economic and social terms. If China attacks Taiwan, more companies will leave China, increasing China’s problems. At some point, more people will pay more for Apple phones produced outside of China, especially in developing Asian countries, rather than foster China tyranny.
I would gladly accept a bigger loss in my KBA (China stock) if China implodes. Socially responsible investing means avoiding China.
I totally agree with that. Fortunately for me, I have zero investments in China. Thanks for your insight.
MM – Virtually all of your international recommendations were initially made 5+ years ago (with one exception) and are very China-focused. Given today’s global market context, do you still strongly believe that China and your recommended funds represent the most attractive international investing opportunities? If not, I would appreciate your current best thinking in this regard. [Note: This question was initially posted on August 9th].
China is the second-largest economy in the world, the second-most populated country, and a leader in many technologies. I think it’s obvious to many that Xi and his policies, as well as the Party, are holding China back. I expect him to be overthrown at some point. I still like the China ETFs, especially KWEB.
Thank you for your response.
All Commie economies are inferior to free markets. Is Putin any better than Xi? If Xi is overthrown, where is any free market leader coming from?
JGMD,
I just saw your question on the last board. How long will it take For the ACXP trial to get 5 more patients? Who knows? But they got five in the past 3 months after only getting 1 in each of the previous two quarters. I bought more on the news. If not completed by the next earnings call, I am betting it will happen before the one after.
That question came up in their Q2 earnings call & the CEO said “in the coming month or two”. They added a new CRO which has resulted in a substantial increase in the number of patients that are screened, which has in turn resulted in better enrollments. We’ll see…
https://seekingalpha.com/article/4628254-acurx-pharmaceuticals-inc-acxp-q2-2023-earnings-call-transcript
“We’ll see…” I agree. I was looking at a worst case scenario.
MM – Taking into account VLD’s recent performance trends (e.g., revenue and new orders) and management guidance, have you done any financial modeling to conservatively estimate when the company will become cash flow positive?
“ARTH is one of the worst recommendations I’ve ever made.” Respectfully, I disagree. It was a fine recommendation when you brought it to NWI at 20 cents on April 30, 2015. This was borne out when it doubled in a year. And then doubled again a few months later. Your mistake with ARTH was not suggesting readers take some profits along the way. A $2,000 investment at $0.20 would get you 10,000 shares. When it reached $0.40 ($4,000) a year later selling half (+$2,000) would have resulted in a capital gain of $1,000 (100%), playing with House money and still holding 5,000 shares worth $2,000. A few months later the price doubled again. Selling half again (+$2,000) would have left you with 2,500 shares. remaining. At that point you would have doubled your money and still had 2,500 shares worth $2,000 which could have been sold at any point between late 2016 and today for real cash. Selling when it fell back to $.50 a share would have given you another $1,250, turning your $2000 investment into proceeds of $5,250. Even selling when it fell back to $.20/share would have given you another $500 or proceeds of $4,500.
So the recommendation in April of 2015 to buy ARTH at 20 cents was not one of the worst recommendations you’ve ever made. QUIK comes to mind instantly. Your mistakes were not taking profits along the way and not selling when sentiment turned sour. I have maintained a subscription to Biopub for years and learned that ARTH had problems which could have been overcome but for the obstinance of Terry Norchi. Anyone can buy a cheap stock. Knowing when to sell is more difficult.
Good points, agree. However, ARTH was a scam from the getgo with Norchi and the CFO treating the company and stock like an ATM machine for their personal lifestyles, while using their Boston location and Boston Brahmin MIT connections to pretend to be some kind of legitimate VC startup instead of an obvious fraud. I continued to hang on, mesmerized by the thousands of applications of the tech, but it was a sell come 2016, 2017 at the latest.
Chris, Look at BHP and tell me or us what you think,
Nice dividend yield! But I see earnings are expected to fall 10% next year. Not as bad as FCX expected 15% drop, though. My favorite energy play this year and for next year is still NAT and its 15% yield.
Chris, thanks for your thoughts BHP. You read my mind on why I asked. I don’t like FCX at 26 times earnings. SO Thanks again.
Chris, agree with your strategy. Arena (ARNA) was one of my best investments ever, when I loaded up (recklessly) after their unfair initial rejection as they completed work to resubmit for approval, and sold on the way up in front of and at committee and final drug approvals. Safer to take significant profits along the way (if they ever occur! 😉 Murphy’s close guidance during ARNA’s approval that year was his finest hour IMHO.
Unfortunately, the vast majority of small biotechs fail, maybe about 90%. These might be best thought of as trades not buy&hold investments?
I always thought SCYX was a winner but so far not so good, and my biggest loss. But maybe this one will grow into a more mature company with some upside? I always thought an epidemic must provide some juice to the stock price but didn’t seem to work out.
Ah, yes. ARNA was sweet. Going into the PDUFA date you could get $2.50 Calls for $0.60. Too bad I didn’t know about options when DNDN hit it big, but it was still a huge winner going from $4 to over $60 on approval.
Looking at the chart for ACXP, you may not believe it can go multiples higher in the upcoming months, but I see it as a great buy down here. And NGENF beginning to enroll Spinal Cord Injury patients in its 16 week trials for chronic and sub-acute SCI make it worth some of your money if you are the type who sometimes buys lottery tickets or engage in sports betting.
Look at AXSM going from $2 to $100 in 2019 and you will see just how the right biotech can pay off big.
NVTA
Thanks Michael M for your answer to my questions from last RR (as follows): zman
August 13, 2023 9:41 pm
MM Re:
NVTA
Nice reduction in cash burn. The street isn’t recognizing it because I don’t think that’s the number they are focused on. Let’s face it their growth is in oncology and that is relatively flat. They need a bigger piece of that $30 billion piece of pie you keep alluding to. When is that going to happen? Also, part B, how low can they go with cash burn and still maintain adequate R&D and product development and their market leadership? What sort of revenue/revenue growth at this point is required to turn a real profit. Grow or die–how are they addressing growth in the oncology testing sector? That seems to be the area to watch, don’t you think?
Last edited 6 days ago by zman
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Michael Murphy
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Reply to zman
August 17, 2023 2:01 pm
All good points. They said: “Despite solid volume growth in our hereditary cancer tests, oncology sales were impacted by lower-than-expected insurance payments and lower fee-for-service revenue.” So they are focused on improving payment rates and the average payment per test.
Revenues will grow as genetic tests become required for more and more cancers. But they need to double revenues to turn profitable.
I believe they have until 2028 to turn a profit/boost revenues? I don’t think investors will wait that long. I’ll give them two quarters to show progress and then rethink my hefty position. A marker for me will be a $2 share price.do you think that is realistic?
NVTA
About to be banished to the boneyard where dreams go to die. The pile is mounting. ARTH, INO, and now NVTA on top of the heap. Sub $1tomorrow.
EV’s are NOT selling. 12,036 Ford Mach, 9,356 VW ID, 5,805 Hyundai LoniQ, 3,767 Nissan Ariiyas, 2,347 Ford Lightnings , 2,155 Audi Etrons, 2,055 Kia Niros, 1.617 Chevy bolts and 1018 Cadillac Lyrios are sitting on dealer lots.
Interesting. You left out the 466,140 Teslas sold in the 2nd quarter of this year. What you meant to say is LEGACY auto makers are getting their asses handed to them by Tesla.
MM–please address my concerns about VLD. You gave a top 15 list of 3D manufacturers. If VLD is having trouble getting big new orders for their high end products, is that true of much bigger companies like GE or any other companies on that top 15 list?
Thanks.
Haven’t been reading these reports for a while but saw this: ARTH is one of the worst recommendations I’ve ever made. It remains a Hold for a buyout.
I would toss INO and NVTA in there as well. Both at all time lows.
I applaud you for FINALLY admitting that ARTH was a mistake but way too late.
Chris,
I reviewed the phase 2b design for ACXP. So far, Ibexa has 100% cure rate for the small number of patients–10. For 2b of 18 patients interim look, suppose we get the same 100% cure for 18 patients, and for 18 Vanco patients we get 14-17 patients cure. Promising, but only a small sample with need for much larger studies. Then there is the more important question of recurrence rate. Historically, Vanco has about 25% recurrence, but I couldn’t find info about when the recurrences occur. When larger studies are done over a long time frame of maybe 1 year, it is likely that Ibexa will have much less recurrence, say 5% vs 25% for Vanco. The 28 days post 10 day treatment isn’t long enough for assessment. But this 2b study only measures theoretical markers such as microbiome proportions and secondary bile acids that are characteristic of the healthy colon, and predictive of very low recurrence. No doubt that the post treatment microbiome will be healthier for Ibexa than for Vanco, but that is only an interesting science experiment that doesn’t directly answer the question about recurrence.
The most likely scenario is a successful phase 2b, but with no direct data over a long enough time to indicate, but not merely to suggest, a lower recurrence rate. For Vanco or Dificid to be dethroned as the standard of care, these longer time studies will need to be done. We’ll get a bump in the stock price which will fizzle until more studies are done. Maybe $4 in 4 months fizzling to $3. No 5-10 bagger until longer term studies are done.
Further, a successful phase 2b won’t teach us more than what we already suspect. Yes, the efficacy of Ibexa will likely be better than Vanco. But the crucial demonstration of lower recurrence of C diff won’t occur with 2b, even though a healthier microbiome will be shown. We know that already. The rally in the stock from a recent low of $1.53 to the present $2.07 already anticipates a good 2b outcome. No Big Pharma will buy out the company based on the 2b. They might partner to fund larger phase 3 long term studies. This stock is still a moderately speculative long term play. I was foolish in buying my initial position at $5, then $4. I don’t expect to break even for a long time, unless I can average way down for a final purchase at $1.50 or less.
First, keep in mind that this is a non-inferiority trial, so even though I expect Ibeza to prove superior, the bar is quite low. While a participant is included in the trial when they return after 28 days, some continue to return for many weeks afterward because they receive $100 per visit. I disagree with your statement that “No Big Pharma will buy out the company based on the 2b.” Big Pharma WILL pay big money for a better C Diff drug. I believe the drug will be worth over $500M when it is FDA approved, based on what Big Pharma has paid for other C Diff drugs historically. If the data is as good as I expect, Big Pharma will buy the drug after Phase 2b. They won’t pay $500M, but let’s say they pay $250M. That’s nearly 10x the current $27M market cap, pushing shares up to about $20/share. Even if you bought at $5, that’s a very good return. I sold some when enrollment slowed to 1 patient per quarter, but bought back after the recent earnings call revealed a faster pace of enrollment and a finish line that is very near. Yes price will rise after data is announced, but if you sell then, you will miss out on the big bump when a Big Pharma deal is made.
Sorry, should be 38 days, not 28
https://www.clinicaltrials.gov/study/NCT04247542?term=acurx&checkSpell=false&rank=1#locations
25% of patients continue coming back to get that extra $100 per visit.
Don’t forget the impact of the Pasteur/Pasteur Light Act. Per Dave Luci on the Q&A portion of the Q2 conference call:
“Pasteur Light by itself is like a 6 round home run for us. And we think that public health needs it. And that’s been made very clear by those in public health. It’s already approved in the UK, which paves the way for us. So, we can’t speak at the timing, but wouldn’t it be ironic if this delay and the enrollment leads us to an M&A situation where Pasteur is passed and we can capitalize on it before we were able to do a transaction. That would be great.”
and later…
“The biggest bogey will be, if the Pasteur Act is passed, and we get designated as a critical need antimicrobial, that is an absolute game changer even under Pasteur Light that would have a dramatic impact on what we we’re able to sell for.
Now, we could sell before getting that designation. So hypothetically, if Pasteur is passed and we’re not yet designated, even though it would seem that we would be, one of the most qualifying a potential candidates. It could be a contingent value, right, in a deal that could be negotiated prior to having the designation. And we would just have to consider the various factors as we continue to talk to potential partners.”
Relevant info–“Patients were treated with 450 mg of oral ibezapolstat bid for 10 days. In segment 2A all (10 of 10) patients were cured of CDI at end of treatment and all (10 of 10) were sustained clinical cures 30 days after EOT. Ibezapolstat was well tolerated with no reported SAEs. The trial will advance to Segment 2B which is a double-blind comparison of ibezapolstat to the standard of care, oral vancomycin, in approximately 64 subjects (1-1 randomization) at up to approximately 15 sites.
Subjects will be evaluated for cure, safety, and tolerability. All subjects in both segments will have stool samples tested for microbiome profiles. Pharmacokinetic (PK) testing for systemic exposure will be performed on blood samples. Stool samples will be tested for study drug concentration.”
I like the 30 day sustained clinical cure in 100% of patients on Ibexa in phase 2A. Unfortunately, PK data is nursery school info–we know both Ibexa and Vanco are non absorbed and stay in the colon where they exert their therapeutic effects. Microbiome profiles will be done. This is akin to pre-clinical and phase 1 routine testing. There will be followup for only 28 days after the 10 day treatment. No longer term actual recurrence data will be known. This is an UNDERWHELMING phase 2B effort that supports my prediction that there will be no acceptable B/O until longer term phase 3 patient recurrence data is known.
Certainly Big Pharma will pay big money for a better C diff drug. After 2b, Ibexa’s 100% cure will be shown to be better than Vanco’s 80-90% cure for the first illness of C diff. But 2b is not designed to show actual patient numbers for short/medium/long term recurrence, which is the critical issue. We will almost certainly see better microbiome/bile acid data after Ibexa vs Vanco. This data will eventually be shown to predict recurrence after much longer observation and larger phase 3 trials designed to show that Ibexa actually reduces numbers of patients getting recurrences. Analogy–cholesterol is one risk factor for future heart attacks. Statin drugs definitely lower cholesterol, but it took long clinical trials to demonstrate that statins reduced actual numbers of heart attacks. The abnormal microbiome is a risk factor for recurrent C diff, just as cholesterol is a risk factor for heart attacks.
Suppose a Big Pharma makes a B/O after phase 2b. It will be a speculative leap of faith on the part of BP, and the B/O will be at a low price like $50M, unacceptable to ACXP management. Personally, I would like to see an offer much higher, after a large phase 3 shows what we want to see, a reasonably confident bet.
This is a weird situation. Usually phase 2 shows hard clinical data in small numbers of patients. Then a larger phase 3 shows the same hard clinical data, which generates more confidence from larger numbers. But with ACXP, this phase 2b is only generating microbiome/bile acid data to PREDICT recurrence, not hard clinical data on ACTUAL recurrence. I can see a 50% up move from here after successful phase 2b. But the much bigger payoff won’t occur until phase 3 or actual FDA approval.
The new Radar Report for 8.24.23 is posted. Sell GRPH.