Dear New World Investor:
Although tomorrow is a stock market holiday, we are supposed to get the February Personal Consumption Index inflation. Core PCE is estimated at over 3%, which will keep the Fed in “High – but not higher – for longer” mode.
Click for larger graphic h/t @Mayhem4Markets
Next Friday, April 5, we see March payrolls. There is a simple rule to predict the beginning of a recession: A 10% rise in unemployed people.
Click for larger graphic h/t @MichaelKantro
To get there, we need to see services weaken. According to the St. Louis Fed, over the past 40 years, the services sector has grown to 79% of output, 85% of employment, 83% of companies, and 78% of household spending.
After stagnating for nearly 15 years, inflation-adjusted revenue per worker has increased sharply in the last couple of years to new highs.
Click for larger graphic h/t @BobEUnlimited
Market Outlook
After the best week since December, the S&P 500 added 0.4% since last Thursday, hit a new all-time high today, and set a new record of +27.3% for a 100-day return without a 2% decline. The Index is up 10.2% year-to-date, booking its best March quarter since 2019. The bullish reversal Wednesday indicates that another short-term low was made Tuesday without even hitting the 10-day moving average. The market keeps being very bullish and moves higher with minimal pullbacks even though the rate of ascent has been slower recently.
Today it recorded its fifth consecutive all-time high monthly close. Strong future returns after these streaks are actually quite normal. It was higher a year later 26 out of 28 times (92.9%) and up 12.5% on average.
Click for larger graphic h/t @RyanDetrick
The Nasdaq Composite lost 0.3% but is up 9.1% for the year. But breadth is narrowing. Only 45.3% of stocks are above their respective 20-day moving averages, down from a high of 71.2% in December of 2023.
Click for larger graphic h/t @Mayhem4Markets
The SPDR S&P Biotech Exchange-Traded Fund (XBI) climbed 1.4% as the nascent biotech recovery continues. It now is up 6.3% year-to-date. The small-cap Russell 2000 won the week again, jumping 2.5%, and is up 0.5% in 2024. Does anyone hold small cap stocks anymore?
Click for larger graphic h/t @BobEUnlimited
The fractal dimension is setting new records for the most amazing trend ever. Our insurance puts probably will expire worthless – that’s what insurance premiums do – so next week we’ll roll them out a couple of months.
BofA said the current secular bull market from the 2013 breakout above the prior highs from 2000 and 2007 is middle-aged and can last until the late 2020s into the early 2030s. As you know, I think it will top in the usual 36 years from the last top – 2036.
Click for larger graphic h/t @WinfieldSmart
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
IBIT iShares Bitcoin Trust – Bitcoin is headed for $100,000
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
US economic data surprises have now turned negative.
Click for larger graphic h/t David Kostin – Goldman Sachs
You know it’s getting bad out there when the RIFers are getting RIF’d
Click for larger graphic h/t @BowTiedBiotech
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, March 29
Markets Closed Good Friday
Personal Consumption Expenditures Index – 8:30am – Core PCE is Fed’s favorite!
Tuesday, April 2
INO – Inovio – 10:00am – “Innovative Technologies for Treating and Preventing Disease” panel at The Novel Therapeutics Forum hosted by Citizens JMP at Penn Medicine
Thursday, April 4
FSLY – Fastly – 9:00am – Xcelerate 2024 Conference, San Francisco
Friday, April 5
March payrolls – 8:30am
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 – $171.48) fell 4.1% last Thursday, its worst single-session drop since it fell 4.8% on Aug. 4, 2023. The reason, of course, was the ridiculous DOJ civil antitrust lawsuit against Apple for “monopolizing smartphone markets.” Take that, Samsung…and all the other Android phone manufacturers that collectively have a larger market share than Apple.
The filing says Apple purposely built a system to protect itself from competition. The horrors! Don’t most companies gladly build systems that don’t protect them from competition? Isn’t that the Marxist American way? Apple, of course, refuted every claim the DOJ morons made.
Some good news: Apple suppliers are predicting new iPads to be announced in May. TD Cowen said Apple’s first quarter iPhone builds continue to hold steady around 48 million units “despite anecdotes of weaker China demand.” And Tencent, the huge Chinese tech company, has agreed to make some of its most vital apps available on the Vision Pro headset for the Chinese market. Apple’s streaming service and other US entertainment services are not available in China. Besides offering WeChat, the Chinese default messaging app, Tencent also operates a video-streaming service that around 450 million people in China use at least once a month.
This morning, DZ Bank, the second largest bank in Germany, downgraded Apple from Buy to Hold, and cut their target price from $210 to $180. Apple’s current 52-week low of $155.98 was reached on March 28, 2023. After May 4, the new 52-week low will be $165.67 from October 26. I am raising the AAPL buy limit to $175 for AI announcements at the Worldwide Developers Conference, new iPhone rollouts, and augmented/virtual reality products.
Gilead Sciences (GILD – $73.25) got FDA approval to expand Vemlidy’s indication for chronic hepatitis B virus infection in pediatric patients as young as six.
The company paid $30 million upfront and invested another $13.5 million in Xilio Therapeutics (XLO) for an exclusive license to XTX301, a Phase 1 immunotherapy drug for people with solid cancer tumors. Xilio could receive as much as $604 million in additional payments and equity investment if certain milestones are met. GILD is a Long-Term Buy under $80 for a first target of $120.
Meta Platforms (META – $485.58) has a three-year sales growth rate of 17.3% and a three-year earnings growth rate of 24.8%. So institutions are buying. Each of the green bars in the graphic below signals unusually large volumes from Big Money buying, pushing the stock higher:
Click for larger graphic h/t www.mapsignals.com
META is a Buy under $345 for a $400 target in 2024.
Small Tech
Enovix (ENVX – $8.01) got 15-year Pioneer Status from the Malaysian Investment Development Authority for manufacturing its batteries in the Penang Science Park in Penang, Malaysia. The primary benefit is an exemption from the payment of income tax, subject to meeting certain conditions such as incurring minimum capital and operational expenses, employing local workers, implementing a local vendor development program, providing training programs for students, and collaborating with higher education institutions.
Enovix has established Fab2, hired nearly 100 team members, and built out 250,000 ft2 of factory space in 100 days, including sections that meet the Class 10,000 Cleanroom standard. They are on track to produce the first samples of silicon batteries in the June quarter. 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 – $12.97 funded a survey of 235 IT and cybersecurity decision-makers that showed 9 out of 10 of them know that Application Programming Interfaces (APIs) are a Trojan horse for cyberattacks, but 84% of them admitted to not having advanced API security (as provided by Fastly) in place.
Amazingly, 95% of those surveyed said they had experienced API security problems in the last 12 months. Over three quarters (79%) had delayed the rollout or integration of a new application due to API security concerns. In addition, 79% claim to place a “high or very high” level of importance on API security. Asked why none of this has translated into action, ‘insufficient budget’ and a ‘lack of expertise’ were the most commonly stated reasons.
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.
Rocket Lab USA (RKLB – $4.11) is one of five finalists for New Zealand’s prestigious “Hi-Tech Company of the Year” award. 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.
Velo3D (VLD – $0.46) reported December quarter results. Revenues fell 93.9% from last year to $1.81 million with a pro forma loss of 29¢ per share. As the company telegraphed, it was a bad quarter.
On the conference call (SLIDES HERE and TRANSCRIPT HERE), management said they added 12 new customers in 2023, including three new defense customers.
Importantly, the December quarter showed a 35% year-over-year improvement in free cash flow and they still expect to achieve cash flow breakeven in the second half of this year,
Their sales cycle is about six months long, so we are just starting to see the results of the reorganization. They have had a bookings recovery, with total bookings of $15 million since mid-December and over 50% of those orders from existing customers. They are seeing improved close rates as their pipeline starts to fill with highly qualified opportunities. Many of these new opportunities are in key verticals, such as Space, Defense and Aerospace. Velo3D is the only US-based supplier of large format metal AM solutions that can print the complex internal geometries required for the most demanding applications.
They’ve also cut ongoing operating expenses more than 15% from the December quarter, on their way to more than 30% from the September quarter to the end of the current quarter. They guided for quarter-by-quarter improvement in revenue, gross margin and operating expenses all this year. They expect 2024 revenue of $50 million to $95 million with a gross profit margin of 20% to 30% for the year, targeting 30% in the December quarter.
Velo3D has a huge opportunity now that the $825 billion Department of Defense funding was approved, and they already are getting purchase orders tied to that funding. Also, long-haul airplanes will be transitioning to supersonic flight over the next five years, and those engines can only be build using advanced additive manufacturing. Unfortunately, they said their Board of Directors is in discussions with “multiple parties” to maximize stockholder value, which probably means an acquisition offer in the $1 to $2 range. But if they can stay independent, VLD is a Buy up to $6 for my $50 target as Velo3D’s high-tolerance metal parts printing business grows.
Primary Risk: The Board sells out cheap or 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.
Akebia Therapeutics (AKBA- $1.83) got FDA approval of vadadustat, as I expected. Vafseo, the brand name for vadadustat, now is approved in 37 countries. On the conference call (AUDIO HERE), they said that after TDAPA approval, this oral therapy can replace injected Epogen as the standard of care.
There are about 500,000 dialysis patients being treated for anemia. Unlike the competitors, Vafseo does not have a label warning of a higher risk of hospitalization for the 40% of dialysis patients with a prior history of heart failure. There are 80,000 patients receiving home dialysis who can be switched from an injection to oral Vafseo There are 150,000 patients whose anemia is not well controlled by current drugs that will try Vafseo
They will file a TDAPA application and expect it to be accepted in July. They’ll get approval in January and will launch then, three months later than I expected but no big deal. They said the clinics need six months to establish treatment protocols. Since TDAPA only lasts for two years, they want everything in place for a very rapid ramp of prescriptions.
The company has a cash runway of at least two years. Buy AKBA up to $2 for the vadadustat launches in the EU, UK, and the US.
Primary Risk: Vadadustat doesn’t sell in the US
Clinical stage of lead product: Approved
Probable time of next approval: TDAPA January
Probable time of next financing: Never
Aptose Biosciences (APTO – $1.66) reported a 2023 GAAP loss of $7.58 per share, better than the -$7.98 consensus estimate. On the conference call (TRANSCRIPT HERE), CEO Bill Rice said: “The data we have generated from tuspetinib thus far – as a single agent and in combination therapy with venetoclax in relapsed and refractory AML – have demonstrated a distinctly favorable safety profile and broad activity for tuspetinib across mutational subtypes. This profile also extends to FLT3 wild-type AML, which represents the majority of AML patients, and in which few agents have shown such broad activity. These data have propelled us to initiate a clinical study of tuspetinib in a triplet combination with venetoclax and azacitidine in frontline therapy for newly diagnosed AML, including both FLT3 wild type and FLT3 mutated subtypes.”
The new G3 formulation of luxeptinib, now tested in 31 patients, has shown 10x better absorption than the original formulation with better tolerability as a bonus. The company is “exploring alternative development paths and collaborations to advance LUX as a single agent or in combination with VEN to treat defined R/R patient populations of high unmet need.”
Aptose will present updated data from the TUS/VEN doublet synopsis in relapsed/refractory acute myeloid leukemia (AML) at the European Hematology Association (EHA) meeting June 13-16. In the summer, they will start the pilot triplet study of TUS/VEN/HMA in first-line AML. They’ll present early data from this study at the American Society of Hematology (ASH) meeting December 7-10.
Final data from this trial will be presented at EHA in the summer of 2025 and they will start the Ph2/Ph3 pivotal program in the second half of 2025. Rice said: “In fact, we just heard from a group of KOLs in AML that they have great enthusiasm for the safety and activity of tuspetinib and they believe this is a real drug with the potential to go all the way. These KOLs and our internal team all agree that the immediate focus of tuspetinib should be primarily on the TUS/VEN/HMA triplet, and that is precisely where we’re focusing our resources. Because this TUS/VEN/HMA triplet has the potential to deliver the greatest patient impact, the greatest commercial impact, and the greatest return to our investors…our impact of the TUS/VEN/HMA triplet in frontline therapy is estimated to exceed $1 billion annually.”
Their decision to pursue the triplet instead of the doublet will delay FDA approval to 2027, but it was “very much driven by what we’re hearing from potential partners as to the data that would drive major partnerships.” Partner announcement incoming! Aptose finished the quarter with $9.3 million in cash and raised another $12.9 million or so in January, which is only enough to fund them through August. I expect another financing around the EHA meeting. APTO is a Buy under $2.50 for a $300 target in a buyout.
Primary Risk: Either drug fails in clinical trials.
Clinical stage of lead product: Phase 2
Probable time of first FDA approval: 2027
Probable time of next financing: Mid-2024
ScyNexis (SCYX – $1.47) reported 2023 revenues of $140.1 million, just under the $141.98 million consensus estimate. GAAP earnings per share of $1.39 missed the $1.53 estimate by 14¢. There was no conference call.
Management said SCY-247 will enter a Phase I trial in the second half of 2024. A portion of the preclinical studies, including assessing the compound’s activity against Candida auris and mucorales, are being supported by National Institute of Health grants.
Top line data from the CARES study has been received and is positive and consistent with previously disclosed results from interim analyses. Data analysis for the FURI study is ongoing. The clinical study reports for FURI, CARES, and NATURE in refractory invasive fungal infections are on target for delivery to GSK in the first half of 2024. That will trigger a $10 million development milestone payment.
They made no comment on resolving the manufacturing problem, other than to say they are “working diligently toward the resumption of the MARIO Phase III study.”
The company ended the year with $98.0 million in cash. They project a cash runway of more than two years. I don’t think they’ll ever need to raise money again. 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: 2024
Probable time of next financing: Never
Inflation MegaShift
Gold ($2,254.80) hit a record all-time high today and the FOMO gold fund inflows have started:
Click for larger graphic h/t @dailychartbook
Just as Chinese gold imports surge:
Click for larger graphic h/t @hkuppy
One chartist is targeting $2,444 for this move.
Click for larger graphic h/t John Roque
Last week, I wrote: “The fractal dimension again is flirting with signaling a new trend, but we’ve learned to wait until it clearly happens to call it.” So gold said: “Hold my beer.”
That’s a new trend that should last into early July, with a temporary top in early May.
Miners & Related
First Majestic (AG – $5.88) began silver bullion sales from its 100% owned and operated minting facility, First Mint, LLC. First Mint vertically integrates a manufacturing plant for investment-grade fine silver bullion that will process over 10% of their current silver production coming from the Mexican operations.
The limited edition “First Strike” products will include 1,000 one-kilogram bars, 2,500 ten-ounce bars, and 5,000 five-ounce bars. As production ramps up, the mint will provide a steady supply of cast bars and one-ounce silver rounds. The company is currently seeking ISO 9001 certification, allowing for its silver to be Individual Retirement Account eligible.
If you want to own silver, go to firstmint.com/. Shareholders with at least 100 shares of First Majestic qualify for savings of $0.50 per ounce – such a deal! 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 – $70,897.59) fell last week as crypto assets snapped a record seven-week run of inflows totaling $12.3 billion with a record outflow of $942 million. There will be a reversal to inflows this week.
Click for larger graphic h/t CoinShares
It then staged an epic futures short squeeze on Monday, catapulting more than $6,000 to $70,000 again. Tomorrow, the leading crypto options exchange Deribit will settle bitcoin options contracts worth $9.5 billion, most in the money. That could create some upside volatility.
BTC-USD, ETH-USD, IBIT, and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
iShares Bitcoin Trust (IBIT- $40.47) is a Buy for the 2024 and 2028 halvings.
Primary Risk:Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Many commodities are facing record shortages. Don’t conflate fundamentals with speculation run wild. Cocoa, the latest to skyrocket, is facing a large deficit in 2024 for the third consecutive crop season, the most pronounced shortfall in modern history.
Click for larger graphic h/t @MacrobeatL
The same is true of copper, uranium, and – shortly – oil.
Oil – $83.11
With oil solidly over $80, Morgan Stanley upgraded the energy sector due to increased crude prices and attractive valuation.
Click for larger graphic h/t @Josh_Young_1
Production from fracked wells in the US falls rapidly, so a lot of drilling is needed just to replace current production. It’s not happening – the rig count is falling.
Click for larger graphic h/t @novilabs
Consequently, with the Drilled But Uncompleted (DUCs) wells backlog now gone, US production is falling well short of forecasts:
Click for larger graphic h/t @HFI_Research
After the drone attacks that shut down 14% of Russia’s refining capacity, their government directed oil producers to decrease output in the June quarter by almost 500,00 barrels a day to meet their OPEC+ target. J.P. Morgan strategists said Brent crude is heading toward $100 a barrel this year without countermeasures to balance Russia’s decision to cut production. They expect gasoline prices above $4 a gallon heading into the summer driving season.
And even President Biden’s administration is chasing! This week they exceeded the $79 price ceiling that has guided when the government would buy crude to refill the Strategic Petroleum Reserve. The latest crude purchase was at $81.32 a barrel.
The July 2026 Crude Oil Futures (CLN26.NYM – $69.46) 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 – $39.86) is a Buy under $40 for a $100+ target.
EQT (EQT – $37.07) will be able to export liquefied natural gas (LNG) in the future. They’ll find a ready market. Europe plans to build about 72 gigawatts-worth of new gas-fired power stations to supply 60 million homes, a gas power capacity increase of 27%. 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.
Freeport McMoRan (FCX – $47.02) is leveraged to copper prices. Suddenly, China is buying a lot of copper.
Click for larger graphic h/t @CEOTechnician
Copper supplies are already tight after a string of mines reduced their production forecasts late last year. Many mines around the world are nearing the end of their lifespan and the quality of the ore is in decline, meaning more rock is needed to achieve the same copper production. The Dutch bank ING said closure of a copper mine in Panama and a lack of new projects in the pipeline suggest supplies are set to shrink. Goldman Sachs expects demand to outstrip supply this year.
China is already the world’s largest producer and consumer of the metal. Its strategic stockpiles help it to influence prices on global markets and protect against shortages for its domestic industry. Kieran Tompkins, a commodities economist at Capital Economics, said: “China holds most of the cards for the copper needed for the green transition.”
FCX is a buy under $44 for a $65 target within two years.
Primary Risk: Copper prices fall.
* * * * *
Levels of Awareness In Politics
Level 1 – They believe what their preferred news say and do not sample other sources. Not aware of counter arguments. Not aware their news is mostly narrative.
Level 2 – Sample news from multiple sources but believe only their own sources are accurate. Think the other side is all narrative, but familiar with all sides of issues.
Level 3 – Aware that ALL news is fake, at least in the sense of missing context and spin. Also known as Gell-Mann Amnesia. But still believe the experts in various fields are usually correct.
Level 4 – Understand that NONE of our experts are reliable. Some might be right, but none can be trusted without verification. The distortion of money makes no expert credible.
Level 5 – They see the gears of the machine, Mike Benz style. The Republic no longer looks like whatever the Founders intended. The control of powerful billionaires and intelligence professionals is now obvious.
Level 6 – You are dead because you know too much. Also known as Epstein Level.
h/t @ScottAdamsSays
* * * * *
The markets have changed dramatically since I joined American Express Investment Management.
Click for larger graphic h/t @dailychartbook
* * * * *
Your reading about hyperinflation Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Priced 3/28/24. Check out the complete Portfolio page HERE.
Portfolio Protection
April 30 SPY $505 put (SPY240430P00505000 – $1.64)
April 30 SPY $410 put (SPY240430P00410000 – $0.16)
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 – $171.48) – Buy under $175 for new iPhones
Corning (GLW – $32.963) – Buy under $33, target price $60
Gilead Sciences (GILD – $73.25) – Buy under $80, target price $120
Meta (META – $485.58) – Buy under $345, target price $400
PayPal (PYPL – $66.99) – Buy under $68, target price $136
SoftBank (SFTBY – $29.71) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $8.01) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $56.39) – Buy under $40; 3- to 5-year hold
Fastly (FSLY – $12.97) – Buy under $20; 2- to 5-year hold to $80+
PagerDuty (PD – $22.68) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $16.03) – Buy under $10, target price $40
Rocket Lab (RKLB – $4.11) – Buy under $13, target price $30+
Velo3D (VLD – $0.46) – Buy under $6, target price $50
$20-for-$1 Biotech
AbCellera Biologics (ABCL – $4.53) – Buy under $6, target $30+
Akebia Biotherapeutics (AKBA – $1.83) – Buy under $2, target $20
Aptose Biosciences (APTO – $1.66) – Buy under $10, ultimate target $300
Compass Pathways (CMPS – $8.32) – Buy under $20, hold a long time for a 10x return
Inovio (INO – $13.88) – Buy under $14, hold a long time
Medicenna (MDNAF – $1.37) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.47) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $15.21) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($25.10) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $25.347) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $31.42) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $20.34) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $27.468) – Buy under $30, target price $50
Coeur Mining (CDE – $3.77) – Buy under $5, target price $20
First Majestic Mining (AG – $5.88) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.41) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $5.25) – Buy under $10, target price $25
Sprott Inc. (SII – $36.96) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $65,487.91) – Buy
iShares Bitcoin Trust (IBIT – $40.47) – Buy
Ethereum (ETH-USD – $3,566.99 – Buy
Grayscale Ethereum Trust (ETHE – $26.15) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $69.24) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $39.86) – Buy under $40; $100+ target
Vermilion Energy (VET – $12.44) – Buy under $11; $24 target
EQT (EQT – $37.07) – Buy under $35; $70 first target
Energy Fuels (UUUU – $6.29) – Buy under $8; $30 target
Freeport McMoRan (FCX – $47.02) – Buy under $44; $65 target within two years
International & Other Recommendations
EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $31.31) – Buy under $38 for a $66 target in 12 to 18 months
KraneShares Bosera MSCI China A Share Fund (KBA – $21.39) – Buy under $40 for a three- to five-year hold
Morgan Stanley China A-Shares Fund (CAF – $12.04) – Buy under $18 for a three- to five-year hold
KraneShares CSI China Internet ETF (KWEB – $26.254) – Buy under $40 for a double over the next three years
Acreage Holdings (ACRDF – $0.34) – Buy under $2 for the Canopy Growth merger
Mongolia Growth Group (MNGGF – $1.06) – 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 – $1.96) – Hold for buyout
Invitae (NVTAQ – $0.01) – Hold for April 17 auction
Publisher: GwynRose LLC, 5348 Vegas Drive, Suite 868, Las Vegas, NV 89108
New World Investor does not act as a personal investment adviser or advocate the purchase or sale of any security or investment for any specific individual. The recommendations and analysis presented to members are for the exclusive use of members. Members should be aware that investment markets have inherent risks and there can be no guarantee of future profits. Likewise, past performance does not assure future results. Recommendations are subject to change at any time. Nothing in this presentation should be considered personalized investment advice. No communication to you by Michael Murphy or any of our employees or contractors should be deemed as personalized investment advice.
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First
Thanks for the update on VLD. It bounced back up after all the bad news was digested. Also several of my other advisors are now pushing gold stocks. I bought SA (some more) earlier this week. Reasons are, the eventual FED rate cuts, the value of the dollar falling, geopolitical instability, China purchasing tons of the gold metal, and continued inflationary environments. Also central banks both here and abroad are also accumulating the yellow haze.
Hi Michael, you mention buy a bag of junk silver, can you explain what that is and how you buy it? Probably a strange question but this has had perplexed me for a while now.
Cheers
Steve
Morning steve,if you are interested you can buy bags of silver coins 1964 and older from monex,they sell what you could be looking for monex.com hopefully this helps,have a nice day
Fyi,they also sell bullion,but to me it’s easier to sell a silver half dollar,quarter or a dime pre 1964
Thanks for the info – I’ll check it out
https://www.apmex.com/category/25830/90-silver-coins-rolls-bags-all
Thanks for link Michael, I’ve been reading your newsletters for a couple of decades from CSTL days…and never been this confused :-).
Happy Easter
HAPPY EASTER ALL!
SCYX is a real value investors gold mine. Almost twice the cash of the capitalized company. An approved multi-purpose med protected by a 20 year mote? Most importantly the support of a major pharma—GSK. Scy-247 entering Phase I this year- a potential blockbuster. Why is the stock
price so low? What are the risks? Am I missing something here?
MM could you please address these concerns and speak to when GSK might pull the trigger. My guess is toward the end of a succesful PhaseII for Scy-247.
Zman, can you share the numbers you refer to regarding the “cash value of the capitalized company”? Do you mean they have twice the cash per share than the share price? What is the book value to share price ratio?
SCYX book value is $1.97 per share, so it’s at a 25% discount to book – and that does not include future milestones and royalties from the GSK contract. It is a steal
Yesterday’s SA article said that short/medium term, SCYX is undervalued because market cap is less than cash. However, they are uncertain about the long term, since future milestones and royalties will merely pay expenses for MARIO and company opex. They give no value to Ibrexa in generating earnings because most of the sales go to GSK. They only have SCY-247 as the potential big value, but it is in early stages, and a competitor is in phase 3 or close to approval. To me, the major play in the stock is getting Ibrexa manufacturing back, so the stock can rebound to $2.50 or so. But no better long term. Where do you get a long term target of $20 or even $50? That will depend on SCY-247, many years away.
MARIO is almost done. The royalties from GSK will be much more than OpEx. Plus their China amd Russia partners qill be getting approval and paying royalties. I think GSK will buy them after the hospital launch.
I totally agree with your assessment. I have been buying SCYX now for awhile. I like the set up here. Now holding over 9k shares. Today is living proof of your vision. The stock at this point today is up nicely. Thanks MM for your recommendation.
Also ACRDF is up 72 percent since I bought it recently.
SCYX has a $55 million market cap, $98 million in cash, and no debt. It is a steal. I still think GSK will be back in production of ibrexafungerp by the end of June. GSK does not have a license to SCY-247, but after that gets through a successful Phase 2 they’ll probably acquire SCYX.
SCYX Thanks MM
No serious negatives then to derail the company
It confirms my thoughts on the company
What is the catalyst for mdnaf? It’s went up 4 times since 2/8/24.Got to be something near term.
Good callout Rock. MM – some insight please, is this a new potential near term Top 5 pick? Catalysts?
Aside from being smart enough to tell Nasdaq to shove it instead of doing a reverse split, sometime this year we’ll get Phase 1/2 data on MDNA11. That’s enough to keep owning it. The only bluebird would be a partner announcement for MDNA55, but I’ve been waiting for that for two years.
VLD – we knew their Q4 would be bad but it’s hard to overstate just how horrible their Q4 actually was. They reported their Q3 on Nov. 6th, almost half way into Q4 and at that time provided Q4 revenue guidance of $15M – $27M. Incredible that they could provide that guidance only to deliver actual revenues of $1.8M. How do you have a miss that bad?! Was their guidance just pure hopium? They didn’t sell a single 3D printer in the quarter. In fact, it appears that they had to provide some customer(s) credit as they reported negative revenue of $136K in the 3D Printer revenue category.
They guided to $80M to $95M for 2024 (not $50M to $95M as MM wrote in his note). I’m skeptical. They said they’ve had $15M in bookings since mid-December, but that is only an annualized rate of $60M so they will need to pick up the pace substantially to even hit the bottom of their 2024 guidance.
Interesting that VLD has previously always provided next quarter guidance in their call. That should have been especially easy to do in a call that occurred only four days prior to quarter-end. On Tuesday they should known within a range of a million or two what their Q1 revenue & GM numbers are and had a very good ballpark estimate of operating expenses. Yet they went out of their way not to provide any Q1 guidance whatsoever other than operating expense and it appears that has morphed from a 40% reduction to >30% without explanation.
They had reported $12M in bookings in their 1/25/24 Strategic Initiatives presser so I assume that is about what they can turn around as 3D Printer revenue for Q1 as the later Q1 orders are unlikely to fulfill in Q1. Add $2M+ for other revenue & they’ll probably do around $15M in total revenue. But that also resets the backlog number back to mid single digits.
I think the likelihood that the board will choose an acquisition over going it alone has increased substantially due to the uncertainty of their revenues. A Seeking Alpha article from late last year had projected a buyout estimate $1.30. I imagine that author would come up with a lower number now.
They probably book revenue upon customer acceptance, not on their shipment. The new CEO should give himself leeway for delayed acceptance. I agree that a sale is likely, but probably at $1 a share – a double from here.
Question for you MM,wasn’t your original buy recommendation on vld in 10 to 12 range back then
Original Recommendation: April 1, 2021 @ $10.32
According to last year’s 10-K:
“Revenue for the 3D Printer is recognized at a point-in time, which occurs upon transfer of control to the customer at shipment.”
Notice under Rule 12b25 of inability to timely file all or part of a Form 10-K, 10-KSB, or 10-KT
Velo3D, Inc. (the “Registrant”) is unable to file its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “Annual Report”) within the prescribed time period without unreasonable effort or expense as a result of the following:
(a) Management’s time devoted to negotiating and finalizing a proposed amendment to the Registrant’s senior secured notes due 2026.
(b) The identification of an error related to revenue, contract assets, and other assets. This error, in conjunction with other previously identified immaterial errors impacting 2022 and 2021, will be revised.
(c) The Registrant expects to report two additional material weaknesses related to the accounting of
(i) debt and equity transactions and
(ii) financial statement presentation and has expanded the description of two existing material weaknesses related to the accounting for inventory and contract assets. As a result, disclosure, controls and procedures will continue to be ineffective as of December 31, 2023.
(d) The Registrant’s on-going evaluation of its ability to continue as a going concern, for which the Registrant has concluded it has substantial doubt.
MM: thanks for the responses on SCYX and MDNAF. I’m also seeing several analyst upgrades of AKBA to $4-$5. Heres my question: which stock SCYX, AKBA, MDNAF will double or this year?
SCYX is the most likely
AKBA will need a few years for Vafseo sales to get noticed. Japan sales 3 -4 years after approval are a tiny $11 million. This situation will be similar to TGTX’s Briumvi. TGTX will get a buyout several years from now for its drug, and AKBA will be similar. Meanwhile, the AKBA chart since approval days ago has been lousy. Perhaps a cup is starting to form as the downslope has been slowing. I would wait many more months before adding at around $1.00, maybe even lower.
TO STEVE
MDNAF has already gone from 31 cents to $1.47 this year. I don’t know why nor if will keep going. Just interesting.
I’m quoting in US dollars (not canadian).
MM–APTO, cash runs out Aug 2024, not 2025? You are expecting capital raise after EHA in June 2024, not 2025? Would an optimal time to buy be after the capital raise after EHA this summer, not 2025?
A new year, another pivot for APTO. First, the Tusp monotherapy was the priority, then it was the doublet, and now it’s the triplet. As always, FDA approval slides further into the future.
Over the last three years APTO has burned cash at an average rate of $40M per year. Given that, they’ll need $140M more from mid-year 2024 to get through FDA approval in 2027. That’s four times their current market cap or massive, massive future dilution for any current investors.
Hanmi licensed Tusp to APTO and are owed $407.5M in milestone payments plus tiered royalties on net sales after TUSP is approved. And now Hanmi owns 20% of APTO shares. Has APTO become so tied in with Hanmi that it would scare off any other potential partners/acquirers?
Sounds right. We probably have until early 2027 to buy at 1/4 the current price, or 40 cents. Or even lower after another reverse split with even more dilution, since they won’t be able to keep the stock price above $1. A few years ago, we already had a 15 to 1 reverse split. How about another, for a 225 to 1?
Maybe. Most merger activity is after AHA in December, not EHA in June.
Amazon (AMZN) Offers to Buy Invitae (NVTAQ) for $600 Million
Amazon has announced that it is acquiring Invitae in a deal valued at $600M. Shares closed Friday at approximately $0.01 and trading has been halted this morning. Speaking from Seattle Jeff Bezos commented that he has been eyeing the company since 2022 and considers it the Amazon of genetic testing. The deal values NVTAQ at approximately $2.00 per share, a massive markup from Friday’s close.
For more information, see https://www.seattletimes.com/business/dont-be-fooled-the-worst-corporate-april-fools-jokes-and-how-to-spot-them/
Nice,’lol
I always forget that every year, Chris comes up with the best April Fools stories!
MM–on AKBA, please do estimates for Vafseo revenues. 500,000 dialysis patients. What’s the likely insurance payment? Revenue will be enhanced for only 2 years of TDAPA. Auryxia sales are declining, and resulting in losses because of high opex, so I give no value to Auryxia now. What have been sales for GSK’s Daprodustat, the nearest competitor?
The stock has already hit a low of $1.52 today. It may reach a low of $1.00 before launch in Jan 2025. What’s your realistic target price in a few years? Do you still stick to your ultimate target of $20, and when?
MM and all–
Some factual data for AKBA. Ray on YMB today posted that last year, Japan sales were $11 million, the 3rd year of sales after June 2020 approval. Compared to the US, Japanese people have far less obesity, diabetes, high blood pressure which are the major causes of CKD. The US has 3x the population, and maybe 3x more CKD per capita, so I’ll estimate 10x the US market for Vafseo. That’s $110 million in annual sales in 2028 or the 3rd/4th year of sales. Another data point is that an analyst in 2019 estimated the worldwide sales would be $1.5 billion in 2025. If the US is 10% of that, this would be $150 million in 2028, shared with GSK’s Daprodustat. AKBA’s market cap today is $330 million, so these 2028 sales are significantly discounted already.
MM–if you can come up with other numbers, please justify your target price of $20, over 10x the current stock price. This is way too optimistic, imo. Even crazier is the typical YMB poster who is gunning for $5 at year end 2024 or even 2025. They blame the shorts or even Butler, the CEO, instead of facing reality.
The US usually is 50% of worldwide sales, so that analyst estimate might translate to $750 million. AKBA is going to price it high during TDAPA and then cut the price. But it’s a bettter drug, and after two years with it, I think the dialysis centers will stick with it. Amgen needs to buy AKBA.
Thanks. How can the US account for 50% of WW sales? The major economies are US, Canada, Australia/NZ, Europe, China, India, Japan, Asian Tigers, Russia. By population, the US is less than 10% of WW. What % of WW GDP is the US? I would say 20%. Any idea of the annual selling price of Vafseo without TDAPA? TDAPA bonus is only for 2 years, so for 8/10 or 18/20 of those years, ignore TDAPA to be conservative. Will the dominance of Amgen medically/politically/financially shut out much of the oral market for Vafseo and Daprodustat? How much cheaper will Vafseo be compared to Amgen’s IV ESA’s? It will take some time for Vafseo to increase sales to be a threat to Amgen. When do you think Amgen would buy AKBA?
Biolargo (BLGO) small long
Biolargo will have its quarterly earnings call today at 5 p.m. EST https://pr.report/w0huqVTB
BioLargo Achieved 108% Year-Over-Year Revenue Growth in 2023
WESTMINSTER, CA / ACCESSWIRE / April 2, 2024 / BioLargo, Inc. (OTCQB:BLGO), a company that creates and commercializes sustainable technologies to solve tough environmental and cleantech challenges, announced that its Annual Report, filed April 1, 2024, showed the company’s annual revenues increased by 108% year-over-year compared to 2022
Nvtaq,what a joke
My broker asked where I found nvtaq,they seemed surprised when I stated from a newsletter
From the SCYX 10K:
“In response to the hold on clinical studies of ibrexafungerp by the FDA due to possible beta-lactam cross contamination, we have entered into certain new manufacturing agreements with third-party contract manufacturers to begin producing new batches of ibrexafungerp which we believe will allow us to lift the clinical hold and restart our impacted clinical studies, the Phase 3 MARIO study and a Phase 1 lactation study.”
MM: re:SCYX A big thank you on this one. Sent my entire fleet of trucks to this one over the last month. In one day, I have recouped all my losses plus and still holding.
Today’s plunge in SCYX shows I was correct in my belief that yesterday’s rally was due to the SA article. If I soon see the announcement that the clinical hold is lifted, I’ll eat my words. The bureaucracy is slow and sabotaging, so we may have the opportunity to add at much lower prices. Maybe $1.30 if it takes until June 30, or much lower if it is dragged on. Govt does stooopid things by not taking responsibility for the consequences.
Agreements with 3rd party contract manufacturers is the easy part. The real delays are the many levels of FDA nanny supervisory procedures to get the clinical hold lifted. I think the big rebound in the SCYX stock price today was the SA article, rather than hints of an imminent lift of the hold. Every manufacturer hates the govt inspectors who pose as authorities on best practices, but actually are know nothings who have to be educated first by the manufacturer employees.
ACRDF (Acreage) – can anyone speculate on the Increase over the last month or so? Low daily volumes, but steady up.
Seems to be following CGC up.
Ah, sure enough. Thanks.
Any news on nvtaq,mm
AKBA–ominous article of July 2023 about GSK deciding to withdraw marketing of Daprodustat outside Japan and US, due to poor sales. D was approved Feb 2023. Maybe the TDAPA process sabotaged them. AKBA is doing things right, and V is slightly better than D, but this is worrisome. What does everyone think?
Despite a positive opinion from local drug reviewers, GSK has decided not to bring its FDA-approved oral anemia drug daprodustat to Europe—or any additional countries for that matter.
Daprodustat, marketed as Jesduvroq in the U.S., earned backing from the drug evaluation committee at the European Medicines Agency a month ago. The recommended indication was for treating anemia associated with chronic kidney disease (CKD) in patients on chronic dialysis. From there, an official approval from the European Commission was largely considered a done deal.
But in reporting its second-quarter financial results (PDF) on Wednesday, GSK said it has decided not to commercialize daprodustat in Europe. The company said it will withdraw the application in Europe and won’t seek approvals in other territories. Besides the U.S., daprodustat is also available in Japan under the brand name Duvroq. It’s distributed there by Kyowa Kirin.
In making this decision, GSK cited the “significant reduction” in the size of the drug’s potential market opportunity, the fact that the EMA didn’t include non-dialysis patients
New World Investor for 4.4.24 is posted.