Dear New World Investor:
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2023 was a good year for the market but a disappointing year for us. Although I (barely) outperformed the S&P 500 Index, I lagged way behind the Nasdaq Composite. In part that was due to my bias towards smaller companies in a year the Russell 2000 did poorly, and in part to the biotech bear market that (A) just started to recover at the end of the year; and, (B), I underperformed badly. I spent part of the holidays thinking about lessons learned and changes to be made.
Digital Dominators
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One of my strengths always has been knowing when Big Tech stocks are cheap. Buying Apple at a split-adjusted $27.25 or Meta at $159.34 paid off bigly. Buying Softbank at $22.35 hasn’t paid off yet, but it will. My long-standing prejudice against Microsoft kept me out of that major winner and I learned I need to be more open to a real change. I’ll be recommending more Big Tech here as opportunities arise.
Small Tech
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Fastly and QuickLogic were the big winners here, with Velo3D the big loser. I’ve spent a lot of time reading VLD’s SEC filings recently – there are a lot of them – and realized that as soon as they had disappointing revenue growth I should have cut and run. The new management is righting the ship but it’s still revenue growth that is the key to a good outcome (more below).
Biotech
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Akebia, ScyNexis, and TG Therapeutics had good years while most of the rest were terrible. Investing in development-stage biotech is like venture capital investing – the losers show up early, while the winners can take years. I’m questioning if they should be in an investment newsletter at all.
Plus, I thought I was pretty good at identifying technologies that work and drugs that could get through FDA approval. The Phase 1 safety failure of Graphite Biosciences and the FDA’s initial turndown of Akebia’s vadadustat made me realize I don’t have a real edge here. When Alethia Young, the highly-respected Wall Street biotech analyst, quit her lucrative job to become Chief Financial Officer for Graphite, I thought that was solid confirmation their technology worked. Nope.
I’m not going to recommend any new development-stage biotechs. I may look for the $1 billion market cap that can go to $100 billion, like Celgene and Regeneron, but that’s about it. Of course, I will continue to follow all the current recommendations and still think their stocks will do very well in 2024.
Hyperinflation
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Gold had a decent year, up 13.2% and closing in on a new all-time high, but gold and silver miners did not. That’s the opposite of what normally happens. When gold goes up, both gold miners and silver usually go up faster. Silver miners go up the most. I expect that pattern to play out in 2024.
Crypto
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Bitcoin and Ethereum really helped my performance this year, and buying the Grayscale Bitcoin Trust at a 40%+ discount to net asset value was a rare gift from the market gods. With rumors of a spot exchange-traded fund approval next Wednesday and the every-four-years halving due in April, I’m staying long and strong.
International & Other
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China was not the place to be in 2023, although I think it will be if Chairman Xi wants to keep his head on his shoulders, not to mention his grift, err, job. Growing marijuana also was not a good business in 2023 and probably won’t get better in 2024. But as Acreage Holdings disappears into Canopy USA I still think the stock will go up from here.
Oil
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My underlying thesis here is that global government and social policies discouraging fossil fuels, nuclear power plants, and copper mines are completely wrong and will create shortages of oil, natural gas, uranium, and copper, with the inevitable much higher prices.
The main overall lesson for me is that 49 recommendations are too many, so going forward I am going to use strength to exit stocks outside of technology.
Click for larger graphic h/t @charliebilello
Although “Cash” is fourth from the bottom in the graphic above, in 2023 there was a dash for cash:
Click for larger graphic h/t The Market Ear
So now US money market funds have total assets under management of $5.87 Trillion.
Click for larger graphic h/t The Market Ear
The last time money-market fund flows really reversed (2009) was a very good time to own equities and there was a “dash-out-of-cash” for the next three years.
The Fed meets again on January 31. I expect them to do nothing – High for Longer. How many tightening cycles has the Fed implemented in the past 40 years? And how high did the Federal funds rate reach in those cycles?
Click for larger graphic h/t @stlouisfed
All of the sell-side banks and other Fed watcher tip-sheets think the Fed’s next move is a cut. But there’s a wide dispersion of views about when the cuts begin (some in March, some in the summer) and how many cuts the central bank will deliver in 2024.
Click for larger graphic h/t @NickTimiraos
After near-record short-covering, “everyone is long.” Be careful out there! But in the long run, it’s hard to be bearish on the US in a relative sense with the current global demographic backdrop.
Click for larger graphic h/t @EPBResearch
2024
I think we’ll see a shallow recession this year, not big enough to convince the Fed to cut interest rates much. Wall Street thinks no recession yet five Fed cuts, even though those two things don’t make any sense together.
Click for larger graphic h/t @CyclingMarcus
Here are the current 2024 year-end forecasts:
Oppenheimer 5200
Goldman 5100
Deutsche Bank 5100
Citi 5100
BMO 5100
RBC 5000
BofA 5000
UBS 4850
Barclays 4800
Evercore 4750
SocGen 4750
Wells Fargo 4625
Morgan Stanley 4500
Cantor 4400
JPMorgan 4200
Market Outlook
The S&P 500 lost 1.2% since my last update on December 21 and is off to a lousy start for the year. The Nasdaq Composite lost 3.0% as the “Magnificat 7” sold off. The SPDR S&P Biotech Exchange-Traded Fund (XBI) climbed 5.7% as the new biotech bull rolled on. The small-cap Russell 2000 dropped 2.9%.
The fractal dimension stalled during the last two weeks. While this could be another mid-40s reversal into a consolidation, I’m inclined to wait to see if the uptrend can continue.
Top 5
Changes this week: None
Near-Term – chronological order
SCYX – ScyNexis – Data releases and resolution of the manufacturing problem
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
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 raised its estimate of December quarter real GDP from +2.0% to +2.5% due to strength in both consumer and private domestic investment growth. This is no surprise to us, but it will be to the Blue Chip economists. We’ll get the first estimate on January 25.
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The shallow recession I expect starting early in 2024 will be a surprise to everyone but you. Especially the Fed. The number of job openings in the US continues to fall as economic activity slows. According to the Bureau of Labor Statistics, there were 8.79 million openings in November compared to 8.85 million in October, a three year low. Hiring suddenly cratered, falling 363,000 in November. That is the biggest monthly drop since July 2020 and is now far below pre-Covid levels.
Click for larger graphic h/t @AndreasSteno
Fear Sells
You might not realize it, but you just survived the 25-year Great Depression of 2008-2023.
“…I forecast that the U.S. would enter a depression from 2008 to 2022/2023.” Dent, Harry. The Great Depression Ahead, 2008, page 5.
Now get ready for the 2024 Great Depression.
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Coming Events
All times below are ET, and most presentations and slides are archived on the companies’ websites so you can listen to them.
Friday, January 5
December payrolls – 8:30am – +170,000 expected; November was +199,000. JOLTS report suggests as low as 100,000.
Monday, January 8
GILD – Gilead Sciences – 1:30pm – JPMorgan Healthcare Conference
Wednesday, January 10
Short Interest – After the close
Thursday, January 11
AKBA – Akebia – 2:15pm – JPMorgan Healthcare Conference
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 – $181.91) has been weak as the consensus expects the megacap tech stock rout to continue through January, according to BofA. They wrote: “Crowding risk in the leaders of 2023 has been cited by many (including ourselves) as a key risk in 2024. In particular, year-end ‘window dressing’ may have pushed active funds into big Tech leaders, but these stocks could be used as a source of funds if a hard landing is avoided and leadership broadens beyond secular growth stocks.”
Apple has had its worst four-day stretch since August 9, losing $182 billion in market capitalization since the start of the year. Barclays moved the stock to Underweight (= Sell) and cut their target price to $160. Today, Piper Sandler cut their rating from Overweight to Neutral, saying unit sales of iPhones have peaked.
Apple now has five sell ratings. Good! Selling just before the introduction of the Vision Pro might get us under my buy limit – or close enough. AAPL is a Buy under $150 for new iPhone rollouts and augmented/virtual reality products.
SoftBank (SFTBY – $20.95) gained after it announced that it would receive about $7.5 billion worth of T-Mobile stock at no additional cost. This is a windfall gain based on conditions set out in the merger agreement between T-Mobile and Sprint. SFTBY is a Buy under $25 for a first target of $50 in the next two years.
Small Tech
Fastly (FSLY – $16.37) was named a “magnificent growth stock that can build generational wealth by 2040” by Motley Fool. They wrote: “The single biggest catalyst for Fastly is the steady shift of data online and into the cloud by businesses. The rise of the data-center economy and AI in the wake of the COVID-19 pandemic suggests that CDNs are only getting busier as time passes. That’s excellent news for Fastly, whose platform is usage driven (i.e., more data consumed by end users should equate to higher gross profit for the company)…the company’s dollar-based net expansion rate (DBNER) has been steady between 118% and 123% for eight consecutive quarters, with an annual revenue retention rate of 99.2%. What DBNER tells investors is that existing clients are spending between 18% and 23% more on a year-over-year basis. Meanwhile, enterprise customers are broadly sticking with the platform.”
Exactly. 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.
Velo3D (VLD – $0.36) had the second-worse news a development-stage investor can get: They sold units of 36 million shares and warrants for 50¢ each. The five-year warrants convert at 56.5¢. (The worst news a development-stage investor can get: They can’t raise money because no one wants to buy the stock.)
The buyers included some new institutions, which is good. They rarely take a full position on the offering, so they represent future buying power. The problem with these deals is some hedge funds sell the stock right away to get their investment back, and then have a free ride with the warrants. The underwriters hate those guys, but it’s very hard to police.
In connection with the offering, the company said they did another amendment with the 2026 Senior Secured Note holders. Velo3D made a cash payment to the note holders of $25.0 million to repay approximately $20.8 million of aggregate principal amount of the Secured Notes. The note holders made a $5 million investment in the equity offering, removed the requirement to redeem $8.75 million of the notes for $10.5 million on January 1, and removed the requirement to maintain a minimum of $35.0 million of unrestricted cash and cash equivalents.
The new CEO said: “Since my appointment to Chief Executive Officer, we have implemented a comprehensive strategy to improve our cash flow and profitability, expand margins, rebuild our backlog and strengthen our pipeline of new business. In addition to expense reductions, we have focused on optimizing our supply chain as well as implemented new sales and customer service strategies that position us well for 2024. Additionally, we have improved our liquidity and strengthened our balance sheet with the support of the secured note holders…We expect the combination of our operational changes, debt relief and additional equity investment will provide the company with the resources needed to successfully implement and execute our business initiatives and strategic review process, both of which we firmly believe will result in the enhancement of shareholder value.”
The company will net about $16.6 million from the offering, so they must have used $9 million of their cash to pay the note holders. They had $72 million at the end of September and probably burned $25 million in the December quarter due to severance costs. They probably have two quarters of cash left, so getting revenues up is the key. VLD is a Buy up to $6 for my $50 target as Velo3D’s high-tolerance metal parts printing business grows.
Primary Risk:A new 3D metal printing 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.
Next week is Biotech Week in San Francisco. We have Gilead and Akebia presenting.
Click for larger graphic h/t @KazzBio
Inovio (INO – $0.57) will submit a Biologics Licensing Application for INO-3107 as a treatment for recurrent respiratory papillomatosis (RRP) in the second half of 2024. They will file under the accelerated approval program that cuts their PDUFA date from the normal 10 months to six months.
INO-3107 already has both Orphan Drug designation and Breakthrough Therapy designation. I think approval is a layup. INO is a Buy under $7 for a very long-term hold.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 3
Probable time of first FDA approval: 2024
Probable time of next financing: 2025
Medicenna (MDNAF – $0.32) extended the expiration date of 1,103,000 outstanding December 21 warrants to July 31. The warrants are exercisable at $1.20 – nearly a quadruple from today’s close. Buy MDNAF 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 – $1.94) and GSK amended their ibrexafungerp agreement due to the manufacturing snafu. ScyNexis keeps the upfront payment of $90 million and the development milestone payment of $25 million. The regulatory approval milestone payments are reduced from up to $70 million to up to $49 million. The commercial milestone payments of up to $115 million based on first commercial sale in invasive candidiasis in the US or EU is revised down sharply to up to $57.5 million.
The sales milestone was up to $242.5 million. Now it is up to $179.5 million, $169.75 million, or $145.5 million, depending on the date of GSK’s relaunch of Brexafemme in the US.
These milestones are based on annual net sales in the GSK Territory, with a total of $64 / $54.25 / $46.5 million to be paid upon achievement of multiple sales thresholds up through $200 million; a total of $45.5 / $45.5 / $39 million to be paid upon achievement of multiple sales thresholds between $300 million and $500 million; and $35 / $35 / $30 million to be paid at each sales threshold of $750 million and $1 billion.
Scynexis will continue to be responsible for the execution and costs of the ongoing clinical studies of ibrexafungerp and will have the potential to receive up to $72.35 million in development milestones, revised down from up to $75.5 million. The development milestones are: $25 million already paid; $10 million for the delivery to GSK of final clinical study reports for the completed FURI, CARES, and NATURE clinical trials; up to $30 million for the achievement of two interim milestones associated with ScyNexis’ resumption and continued performance of the MARIO trial after the clinical hold is lifted; and $7.35 million for the successful completion of the MARIO trial.
Importantly, GSK will also pay royalties based on cumulative annual sales in the mid-single digit to mid-teen range. The royalty terms were not reduced.
Although it is not spelled out in the filings so far, I’m pretty sure GSK is in control of manufacturing. The obvious first step is to get the manufacturer to stop making beta-lactum on the same equipment. I don’t think that takes FDA approval. This obviously is a GMP (Good Manufacturing Practices) facility that already has FDA clearance. Brexafemme can then be re-introduced.
Step 2 is to qualify another supplier, possibly a GSK facility, and that does require FDA approval. But it can be done while drug from the current facility is being sold.
I expect Brexa to be relaunched before June 30. In the meantime, ScyNexis will be announcing top-line results from three or four trials. With millions in milestones still coming in and the all-important royalty flow, 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
We’ve gotten used to Instant Delivery on anything. Software, Uber, Online Food Ordering. You know what isn’t instant? Building mines. It takes 16 years to bring a new mine online. We need to drill NOW if we want a chance at electrifying the world.
Click for larger graphic h/t @marketplunger1
Gold ($2,050.90) is being bought by central banks. Their purchases of gold remained at secular highs in 2023. These new purchases represented just under ⅓ of total global mine supply for the year.
Click for larger graphic h/t @BobEUnlimited
The fractal dimension flattened just under the 55 level that signals a new trend has begun. As I said in the December 21 issue: “The fractal dimension ticked below 55, marking a new trend underway. But a look back to mid-2021 shows a couple of times the fractals got to around 50 and then reversed direction – false signals. So while I’m willing to call this a real uptrend, I’d really like to see it extend enough to send the fractals decisively towards 30.”
Well, that didn’t happen, so we have to be on high alert for a flip back into consolidation.
Sandstorm Gold (SAND – $4.86) CEO Nolan Watson did an extensive company update and said gold has one big advantage over bitcoin:
SAND is a Buy under $10 for a $25 target.
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 – $44,451.67) is trying to establish a new base above $45,000. The rumor is the SEC will approve all the spot exchange-traded fund applications next Wednesday, January 10. Well, maybe, If they don’t, and that causes a sell-off, grab it.
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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- $37.25) will shoot up if the SEC comes through next week. GBTC is a Buy under net asset value.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Oil – $72.40
Today’s Energy Information Administration numbers for the week ending December 29 were ridiculous. They showed a massive drop in implied product demand plus a huge product build that comes from yearend inventory gaming. This happens every year.
No One Has Really Grokked How Big The Suez/Houthi Gambit Is. Yet the more the Middle East escalates, the more oil goes down. It’s not subtle. Every day since October 20 that’s had bullish geopolitical headlines, crude gets blitzed in New York trading. That’s not tin foil: that’s just the tape. Oil and natural gas prices have been subdued for most of the time since the Hamas-Israel war began on October 7 and ended 2023 with an annual loss—the first annual decline since 2020. when Covid crushed demand.
The average American consumes 22.5 barrels of oil a year. The average Chinese national consumes 4.0 barrels a year and an Indian national consumes 1.3 barrels a year – and they want the Western lifestyle.
A recent headline said: “US SEEKS UP TO 3M BBL CRUDE FOR SPR FOR DELIVERY IN APRIL.” Only 250 million barrels to go!
The July 2026 Crude Oil Futures (CLN26.NYM – $65.64) are a Buy under $70 for a $200+ target. Only buy futures for all cash; do not use margin.
The United States 12 Month Oil Fund, LP (USL – $35.41) is a Buy under $40 for a $100+ target.
EQT (EQT – $38.20) is redeeming all of its $290.2 million outstanding 1.75% convertible senior notes due in 2026 on January 17. This improves their balance sheet and removes potential dilution.
A big freeze is gripping Europe in January after an unseasonably mild autumn and December. US liquefied natural gas exports hit monthly and annual record highs in December. According to Bloomberg, the US has become the world’s biggest exporter of liquefied natural gas for the first time, with 2023 shipments overtaking leading suppliers Australia and Qatar. The US exported a record 91.2 million metric tons of LNG in 2023. The expanded output was due to last year’s restart of Freeport LNG in Texas, which had been shuttered for months following a June 2022 fire and explosion. Two new US projects are set to start producing in 2024
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 – $6.91) moved up after Japan decided to restart Kashiwazaki-Kariwa, one of the world’s largest nuclear power plants (seven reactors) after having been offline for more than 10 years after Fukushima. Spot U3O8 prices have reached a 16-year high at nearly $90.00 per pound.
The company said that in response to the strong uranium market conditions, it has commenced uranium production at three of its permitted and developed uranium mines located in Arizona and Utah. Once production is fully ramped up at the three mines (Pinyon Plain, La Sal, and Pandora) by mid- to late-2024, they expect to be producing uranium at a run-rate of 1.1 million to 1.4 million pounds per year. Ore mined from the three mines during 2024 will be stockpiled at their White Mesa Mill in Utah for processing in 2025
In addition, they are preparing two additional mines in Colorado and Wyoming (Whirlwind and Nichols Ranch) for expected production within one year. These would increase their uranium production to over two million pounds of U3O8 per year starting in 2025.
In 2024, they also plan to advance permitting and development on the Roca Honda, Sheep Mountain and Bullfrog projects, which could expand their uranium production to up to five million pounds of U3O8 per year in the coming years.
Energy Fuels has more licensed uranium production capacity than any other U.S. company- over 10 million pounds of U3O8 per year. They have the only operable conventional uranium mill in the US, an in situ recovery facility, several permitted mines in various stages of production, development and standby, and one of the largest in-ground uranium resource portfolios in the US. They have accounted for roughly two-thirds of all domestic uranium production over the past five years. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.
International & Other Recommendations
It is important to hold some non-US assets, especially in China.
Acreage Holdings (ACRDF – $0.26) launched adult-use wholesale distribution in New York. CEO Dennis Curran said: “We believe there is immense growth potential in the Empire State, with it expected to become one of the largest cannabis markets in the country, representing an incredible opportunity for us to dramatically increase our total addressable consumer base. We have built strong relationships in New York and are well prepared for this long-anticipated adult-use launch, with our team having identified key partners for sales. For years, our high-quality products have only been available to medical-use patients, and we are excited for adult-use consumers to now learn why so many patients choose The Botanist.”
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.
* * * * *
The United States went from a tiny economy in 1800 to the world’s largest economy by the late 1800s, and yet critics of that monetary era would have you believe the country was in almost constant recession during that time.
Click for larger graphic h/t @LynAldenContact
* * * * *
“The world is full of problems, which people are often very aware of. But most people have no idea about the many improvements we have listed below, and therefore they lose hope for the future and think the world is doomed.”
Click for larger graphic h/t @SteveStuWill
* * * * *
Your supporting The Saudi Road to Peace Editor,
Michael Murphy CFA
Founding Editor
New World Investor
And don’t miss Bill Ackman on my alma mater.
All Recommendations
Priced 1/4/24. Check out the complete Portfolio page HERE.
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 – $181.91) – Buy under $150 for new iPhones
Corning (GLW – $30.28) – Buy under $33, target price $60
Gilead Sciences (GILD – $84.48) – Buy under $80, target price $120
Meta (META – $347.12) – Buy under $150, target price $400
SoftBank (SFTBY – $20.95) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $11.90) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $51.46) – Buy under $40; 3- to 5-year hold
Fastly (FSLY – $16.37) – Buy under $20; 2- to 5-year hold to $80+
PagerDuty (PD – $21.50) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $13.35) – Buy under $10, target price $40
Rocket Lab (RKLB – $5.47) – Buy under $13, target price $30+
Velo3D (VLD – $0.36) – Buy under $6, target price $50
$20-for-$1 Biotech
Akebia Biotherapeutics (AKBA – $1.52) – Buy under $2, target $20
Aptose Biosciences (APTO – $2.27) – Buy under $10, ultimate target $300
Compass Pathways (CMPS – $9.61) – Buy under $20, hold a long time for a 10x return
Inovio (INO – $0.57) – Buy under $7, hold a long time
Invitae (NVTA – $0.54) – Buy under $10, first target $50, then $100+
Medicenna (MDNAF – $0.32) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.94) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $18.02) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($23.33) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $24.09) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $27.76) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $18.88) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $27.03) – Buy under $30, target price $50
Coeur Mining (CDE – $2.91) – Buy under $5, target price $20
First Majestic Mining (AG – $5.62) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.37) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $4.86) – Buy under $10, target price $25
Sprott Inc. (SII – $32.88) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $44,451.67) – Buy
Grayscale Bitcoin Trust (GBTC – $37.25) – Buy
Ethereum (ETH-USD – $2,236.53) – Buy
Grayscale Ethereum Trust (ETHE – $19.73) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $65.64) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $35.41) – Buy under $40; $100+ target
EQT (EQT – $38.20) – Buy under $35; $70 first target
Energy Fuels (UUUU – $6.91) – Buy under $8; $30 target
Freeport McMoRan (FCX – $41.55) – Buy under $44; $65 target within two years
International & Other Recommendations
EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $30.29) – Buy under $38 for a $66 target in 12 to 18 months
KraneShares Bosera MSCI China A Share Fund (KBA – $19.84) – Buy under $40 for a three- to five-year hold
Morgan Stanley China A-Shares Fund (CAF – $12.64) – Buy under $18 for a three- to five-year hold
KraneShares CSI China Internet ETF (KWEB – $26.20) – Buy under $40 for a double over the next three years
Acreage Holdings (ACRDF – $0.26) – Buy under $2 for the Canopy Growth merger
Mongolia Growth Group (MNGGF – $1.10) – 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 – $5.40) – Hold for buyout
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MM, I applaud your thoughts regarding the shift in the newsletter’s emphasis. I hope to see you follow through on those changes.
12/5/2020…GLW is a buy under $33 ,,,, first target is $60 in 2021?????
2025
MM – you have APTO with a 130.9% gain; I believe this misses the 1-15 reverse split in May 2023 which will change the gain into an 84.6% loss.
You are correct.
I joined the investors who sold AAPL recently. (Sold at $199. )One because it was getting too big a position in my holdings and two because it was oversold according to several analysts. Now down $17.00 a share. How close do you think it will get to your $150 buy limit? January is looking like a pull back month. IMO . China’s economy is in the toilet bowl , as is several countries in Europe. Coupled with your view of a mild recession and the mess in the Middle East getting more geopolitical with every passing day, what is your short term outlook??
Earnings come Feb 1, after the close. They’ll announce the Vision Pro on Feb 2. Preorders start Jan 19 and they’ll probably sell out. I’d sure like to see it lower, but I’m going to raise the buy limit tp get back in early on Feb 2..
Happy New Year to all. MM- regarding GBTC, many are saying the ETF approval is already baked into the recent rise of BTC and GBTC and there could be a selloff, you say it will jump post ETF approval – what’s your level of conviction on that prediction? Would you buy prior to 1/10?
GBTC has a 2% management fee and might sink upon ETF approval as there would be other BTC ETFs with lower fees. Cathy Wood will also have a BTC ETF and her fees on other ARK ETFs are .75%.
BTC itself should rise since multiple ETFs would have to buy.
On the other hand, GBTC’s 5.75% discount would disappear so maybe it’s a wash?
I think the safest way to participate is owning your own BTC in a cold storage wallet.
GBTC will slash the management fee when they convert. BTC should go up sharply, so I’d buy more GBTC now.
They are slashing to 1.5 %. Way higher than the others.
MM–On VLD, thanks for providing a detailed financial analysis. With only 2Q of cash, the real issue is what it will take to resume sales growth. Your 2nd to last paragraph shows only vague promotional language from the company. If VLD is the leader in advanced 3D, why have defense sales been poor lately, and why should they pick up? Do you believe last night’s claim by YMB Zweiter paraphrasing from 3D AM news that Musk is considering a cash offer for VLD?
On AKBA, Larry and I asked 2 weeks ago what is the add-on payment in Sept about? Also, after likely approval of vadudustat, what else is in the pipeline to justify your $20 target?
I realize that some questions require research time and thought on your part, but this simple question about AKBA can be answered quickly and briefly. Thanks, hoping for a better 2024 for us.
VLD mostly sells to the contract manufacturers who supply aerospace and defense companies. At some point, they all have to own a Sapphire or they’re out of business.
In the long run, engineers can design modules that van’t be made economically except on a Sapphire.
I wrote about AKBA in the 9/14/23 issue. “…it is amazing what a layup this investment is at a current total market capitalization of only $250 million. They’ll refile the New Drug Application for vadadustat in the next three weeks, which will move the stock up. Then, in October, the FDA will accept it with a March approval date, giving the stock another bump. Then, before yearend, Medice will launch in Europe, and both Australia and Taiwan will approve it. More bumps up.
“Then the FDA will approve it in March and they’ll do a soft launch while they apply for TDAPA approval. About September they’ll get TDAPA approval and do a commercial launch, including through CSL Vifor to the Fresenius and other chains of dialysis clinics covering 60% of all dialysis patients. Akebia keeps 2/3 of the profits. With the TDAPA approval, the chains will be fully reimbursed for vadadustat and not have to buy ESA drugs, increasing their profits. It’s an easy sale. And a big market…”
Dialysis treatment is reimbursed with a single payment to the provider to cover everything. But new drugs that get a Transitional Drug Add-On Payment Adjustment (TDAPA) approval are reimbursed in addition to the standard payment for two years. TDAPA approval is automatic but takes 6 months. So the big launch will be in September/October.
Back up the truck time, MM?
MM – so are yiu saying buy AKBA now? If March is a catalyst and this is a gift then shouldnt it be a Top 5 near term?
Thanks for answering our questions. AKBA has already moved up nicely.
VLD–So why have the orders from contract manufacturers been near 0 lately if they need to buy a Sapphire to stay in business? Maybe they have enough Sapphires already for the amount of business they have at this point.
INO – Probable time of first FDA approval should be 2025 rather than 2024 given the INO-3107 BLA will be submitted in the back half of the year and the PDUFA date is 6 months.
thats an if. I hold some INO. there Plasmid tec has been tried and worked in fish but has never passed st3. look at VICL they tried and rejected INO mod of introduction.
from people much smarter than I. Rna and crisper tec is a much better way to get functional reproducible info into a living cell.
I lost money in Vical and Ribozyme (RNA) back in the day. RNA, and especially mRNA, goes where it wants to and causes significant side effects. INO’s Cellectra is their secret sauce for delivering effective DNA therapy without all the side effects.
I bought INO recently at .40 cents. Currently up 115 percent.
You are correct.
Chris I know it would just be a guess but which stock do you see tripling first. ACXP or NGENF? I would like to play one and then take profits and put in the other.Trying to catapult profits as we all are.
Chris certainly has the most knowledge about both. I have held ACXP for maybe 2 years, and just bought some NGENF. Timing is always uncertain, so the best thing is to have both. ACXP had a good small size phase 2b, but the wild card is whether they get a buyout now, merely get a partner to fund phase 3, or get no partner and have to suffer a slow and expensive enrollment on their own to do phase 3.
On NGENF, Chris said that a response in a few patients would triple the stock upon a confirmed press release. On the excited rumor of responses in one or more patients, it doubled from $1.25 to $2.50, and now we’ve had a nice pullback, so I got in 2 days ago at $1.75. I think the market got it right. Enrollment is still incomplete, and a full report is expected in mid 2024. I hope there is no confirmed news for another 6 months, so the stock can decline to $1.30 or so, and I will back up the truck for more shares. In 6 months with good news, I foresee a spike to $5 or higher, and a stabilization at $3.00. Then we worry about funding a larger phase 3 for SCI, initiation of a stroke trial.
I hope Chris shares his views as well as from the community of biopub on both stocks.
THANKS JGMD I felt you gave MM a pass on vld. Every thing he said we already knew. I would consider selling at 10 percent of his buy in price and definitely at 20 percent of buy in price. I guess the question is sales. They sold 4 printers in quarter 4. I don’t think they will see 20 million in quarter 4. and you have the r/s. On the good side you have DOD approving there technology, but there not buying. MM must beleive there sales will improve but why have they not already. When is it time to throw in the towel? does it go to .20 cents or less? I think more evaluation needs to be done.
I said to much… I just wonder if this company is going to survive…
I think YMB poster Lazerator has the most realistic assessment on VLD. He was correct that sales would continue to decline. He was bearish until recognizing that at a price/sales of 1 lately, it is a compelling value. MM and Lazerator both feel that bankruptcy is not imminent. Sales may pick up when the Fed lowers interest rates. If this happens before VLD runs out of cash, the company will turn around and avoid BK. Some already think the stock has bottomed.
I agree with JGMD that you should own both. I believe ACXP probably will do a deal before we get results from Nervgen’s trial, but another news leak might give NervGen another pop before the summer. It looks to me like the NervGen will form a new base around $1.60.
If ACXP pops first, then I like the idea of selling and putting it into NGENF.
If NGENF pops first, I wouldn’t sell to put it into ACXP (other than perhaps a small portion of your gain) because I think NGENF will eventually be worth well over $50 a share. JGMD sees $5/sh if results are good. I predict over $10/sh if results are good. Although many in the SCI community are following NervGen, Wall Street barely follows NGENF at all. When the news breaks, you will see price rise for several days again and a move to NASDAQ which will bring in more coverage, shareholders and (most important) cash. I wouldn’t expect to see $3 ever again.
Please remember that both of these are speculative stocks and both could crash, but I consider the gamble to be worth it for each given my situation. Your situation and risk tolerance are likely different from mine.
btw, these are my opinions only and not those of biopub.co Biopub is a discussion forum and some there give a bearish case for both these tickers.
Thanks for your insights. It is good that biopub has some bearish investors on these stocks. If everyone were bullish, that would be a negative because who would be left to buy? Only the big Wall St firms, and they would need to wait for phase 3 trials to be completed and positive, which won’t occur for a few years. However, good news on this phase 2 SCI trial will turn some biopub bears into bulls, so $10 is plausible with only a small pullback to $8. If there is good news, how long do you think it will take for phase 3 SCI to be initiated, completed and reported?
I am bullish on TGTX even at almost $20. However, sentiment is wildly bullish, which is a negative. The wild card is liver toxicity from Ocrevus (O). Will there be liver toxicity from Briumvi (B), which is in the same CD20 class? Some say B is glycoengineered to be safer and more effective than O. However, any drug can have liver toxicity, since most substances have to be metabolized through the liver. Natural substances don’t cause liver toxicity except for alcohol, but unnatural drugs do. Tylenol (acetaminophen) is considered a safe drug in low doses, but it is the most common cause of liver toxicity requiring liver transplant in some cases. If liver toxicity eventually is seen from B, the wild bullishness could cause a big plunge in the stock. But if B continues to be safe, it could continue to take away O use, eventually surpassing it. Then $200 is a possible target for TGTX.
Trying to interpret the rumors from the Sally Ryan Rehab place is tricky. Some have mentioned that the plural, “individualS” rather than singular “individual” means that more than ONE person has had a significant improvement. It is common for clinicians to gush enthusiastically and lose objectivity, in contrast to cold-hearted academic trial managers who are strict number crunchers. As a pure clinician, I admit some errors when I get enthusiastic. Some trial lawyers are stopped by judges when they “lead” the witness into interpretations favorable to their case, instead of asking neutral questions which certainly are a more objective way to learn the facts.
Remember the crazy ACXP spike to $8 recently? Even nimble watchers like you missed it, although maybe you sold some calls to take advantage. Predicting and profiting from spike peaks is a game reserved for AI quants.
Thanks Chris and to JGMD for all the information!!!
Regarding ACXP, here’s an interview with the CEO that was recorded before Christmas but aired this past Monday.
https://www.youtube.com/watch?v=8wKiFK58rO8
They are expecting the final two data releases from the phase 2B trial later this month, the microbiome head-to-head comparison and the extended cure data (90+ days out).
When asked about partnering possibilities the CEO responded:
Our goal from the beginning was to attract a large Pharma partner after phase two. Phase two now being over we’re getting calls. We’re formally going to start our M&A process in late January when we have all of the data including the head-to-head microbiome comparisons and the extended cure data. So that’s when it’ll formally start but we’ve informally started it, you know, long ago and I’m sure I’ve already met the buyer.
ACXP also presents tomorrow at noon at the JP Morgan Healthcare Conference.
Hey Chris, I was looking for your response to this question I asked a while ago but couldn’t find it. What stock do you believe has the greatest chance to move the highest and the soonest, and when: NGENF or ACXP – or do you have another one? Thanks for the info
MM – Do you have any thoughts re: the resignations and litigation at Grayscale https://www.coindesk.com/business/2023/12/26/barry-silbert-resigns-as-grayscale-chairman-to-be-replaced-by-mark-shifke/ ? Is it still reasonable to hold GBTC & ETHE or would it be better to move directly to crypto at this point?
BTW – really appreciated this issue.
Having Silbert out probably was part of a deal to get the ETF approval.
MM, this was announced on Friday morning and INO closed at a 52 week high of .72. There was over 18 Million Shares traded. Also after the close, there was posts on the message boards about INO getting a favorable ruling vs. VGXI.
INOVIO and Coherus Announce Clinical Collaboration to Advance Development of INO-3112 in Combination with LOQTORZI™ (toripalimab-tpzi)https://www.prnewswire.com/news-releases/inovio-and-coherus-announce-clinical-collaboration-to-advance-development-of-ino-3112-in-combination-with-loqtorzi-toripalimab-tpzi-302025891.html
Some people may think I’m crazy, but I think that INO will get bought out before the INO-3107 BLA is submitted. The pieces are finally coming together for them. I think that the CEO Jackie Shea was hired to get the company ready to sell.
MM, any thoughts on the recent developments with INO?
MM–refreshing your memory, please answer the question from Larry and me about AKBA. What is the add-on payment in Sept? You said over 2 weeks ago that this would be the biggest catalyst for the stock. Why not DD approval of vadadustat?
Is MM, AWOL??? I don’t see any reply to any posts?
Back. Monday was a 45,000-mile Toyota service, today was a derm operation (deep basal cell; nothing serious, but I look like I lost a bar fight).
MM: glade your back. the sun took a piece of my right ear a few months ago do you remember the company you used to fallow around 2007 – 2010 that photo scanned for skin cancer ?
nice tgtx call tonight
Now a smartphone app
https://www.cnet.com/health/personal-care/how-to-use-your-smartphone-to-detect-skin-cancer/
I remember that company, but forget the name. But the visualization technology wasn’t that accurate, so it is no substitute for seeing a dermatologist and getting a biopsy.
thanks MM i will look at that.
JGMD
were 6 to 9 months hear to see a derm.
TGTX Moving up nicely in the after hours on close to half amillion shares.
Anybody listen to the presenation at ET4;30? Must have been very positive up $2 and change
This evening’s TGTX presentation at the JP Morgan Healthcare Conference went very and included the following financial guidance for 2024:
Thanks for that info,that explains the bump up, not unexpected. There is a signicant shorting related to this stock. If institutions load up further we could see the old high taken out. Smart cookie that Michael Weiss.
And …. it’s gone. I’m surprised that nobody has mentioned the SEC hack announcing a BTC ETF approval on X.
Is this board down to around 10 people now?
WTF is going on with TGTX, below $12?? MM, need some insights here, back up the truck or is there something I don’t see?
oops, typo, I meant below $17
Street was expecting $43.0 million March quarter revenues (range $38.2 – $46.0) and $237.99 million for 2024 (range $203.0 – $263.3). Today’s preannouncement was $41 – $46 million for Q1 and $220 – $260 for the year – both on target.
Street was expecting a 2024 per-share loss of six cents (huge range -26 cents to plus 32 cents). Company said $250 million in operating expenses, so probably a loss for the year. Salesmen for those expecting a profit are calling fund managers to write a Sell ticket.
Short-term morons.
So buy here? What’s timeframe for this to hit the recent previous high of $30 plus?
This year.
HC Wainwright has a $45.00 target price.
I am mainly concerned about diversion of attention to the car T project of Precision. I am not clear on whether Precision or TGTX spends the huge money needed for development of that–likely TGTX. That money is best spent on more aggressive commercialization of Briumvi. 2023 growth in sales was fabulous, from Q2 of $15MM, Q3 of $25MM, now Q4 rough data of $40MM. If that 60% sequential growth continues, the stock will be way over $100 in 1-2 years. But 2024 estimates total $260MM, about 20% sequential growth, still excellent, although projecting a stock price of only $30 or so. So the mere 5% growth in Q1 would be a disappointment, although Weiss is smart to be conservative. If Weiss strives to make Briumvi the leading CD20 drug in sales, he better get more marketing going. So the market is disappointed on the distraction from Precision.
I listened to the CC late PM, and didn’t like Weiss’ flippant comment that he flunked HS biology. He also admitted that the car T project is a gamble. STUPID. Briumvi will be one of the few blockbuster drugs, and he got lucky. Why is he taking this gamble now? For his EGO at being the Amazon of autoimmune diseases. FAT CHANCE. He is likely to blow it.
It seems like TGTX is funding carT for Precision, about $300 million, in milestone stages. If carT is a failure, subtract $300 million from TGTX’s market cap, or about $2/sh. Before the excited anticipation of the JPM CC, the stock was about $18, so equivalent value with Precision expenses would be $16. The shorts are back with their 2nd wave to the low teens. I got a nice gift from them by buying some more on Oct 31 at $7.25. Hopefully I’ll get some more at $11-12.
Some TGTX bulls are buying Precision (DTIL), but the latter has probably zoomed since the CC. If carT works, having TGTX gives exposure to Precision. Maybe Weiss wants to consider TGTX as a mutual fund of small promising companies, LOL.
The SEC approved 11 bitcoin exchange-traded fund (ETF) applications.
The spot bitcoin ETFs are expected to begin trading on Thursday.
MM – are you still suggesting invest in GBTC now that th discoubt is gone and they charge 1.5% fee or rather one of the other 10 ETFs and which one, ARK?
Money will flow out of the expensive funds and into the cheaper ones. The GBTC era is over.
IBIT (Blackrocks) is already up 27%, so I bought ARKB (Cathy Woods) at $40, it opened $52, and she is offering zero fees for first 6 months
typo, I bought ARKB at $49
As we watch all the new BTC ETFs give up all their gains, BTC is holding. A reminder that you don’t need a middleman to own BTC.
What a surprise!! CPI says inflation is still a boogeyman! And now Powell and company are out of the hot seat to cut rates earlier than later. My
Hi Guys, or MM, Why GPBTC is trading at 41 when BTC is at 46K? I thought the discount would close as soon as the ETF is approved. Is it expected to close the gap or will the gap gets wider? Please explain the nuances here. Thank you guys.
New World Investor for 1.11.24 is posted.