Dear New World Investor:
Serious fiscal stimulus in China, stellar Micron earnings, another wave of solid economic data, Powell not backing off from cutting rates, and we get new all-time stock market highs. What could go wrong? Well, Manufacturing continues to weaken as Services continue to expand, and services are over 70% of the US economy these days. The S&P Global Flash Purchasing Managers Index showed a further solid expansion of the service sector contrasted with a second successive month of modestly falling output in the manufacturing sector. Average prices charged for goods and services rose at the fastest rate since March, the first acceleration of selling price inflation in four months.
Click for larger graphic h/t S&P Global
The 8.4 point gap between the manufacturing series and the services series is the largest since at least September 2021.
Click for larger graphic h/t Luke Kawa – Sherwood
The M2 money supply is increasing again after reaching the deepest contraction level since 1960, which means inflation will stop declining and it will be harder for the Fed to continue cutting. They aren’t willing to say “3% is the new 2%” yet, but consumer confidence is waning and the usual 12-month lag from the restrictive Fed policy a year ago is hitting the real economy now. Will they cut rates even as inflation is stable or increasing?
Click for larger graphic h/t @WinfieldSmart
The good news is that these new record highs are not just sugar highs. Strong fundamentals are driving returns more than just positive sentiment. So far, sales are growing and profit margins are expanding.
Click for larger graphic h/t Sonu Varghese – Carson Group
Market Outlook
The S&P 500 added 0.6% since last Thursday to new intraday and closing all-time highs today. The Index is up 20.5% year-to-date. The Nasdaq Composite gained 1.0% and is up 21.2% for the year. The SPDR S&P Biotech Exchange-Traded Fund (XBI) fell 4.1%. It still is up 10.0% year-to-date.
The small-cap Russell 2000 dropped 1.9% and is up 9.0% in 2024. At the start of December 2023, the Russell 2000 finally closed above its 200-day moving average. Since it poked above its average, it hasn’t closed below. That means the Russell just celebrated its 200th consecutive session above its 200-day average. It’s a relatively rare achievement for this index.
Click for larger graphic h/t @sentimentrader
The fractal dimension is still consolidating, although at a bit slower rate than before. I would not be surprised to see a brief, sharp downturn to consolidate it even more. There’s still a long way to go to the fully consolidated 55 level.
Click for larger graphic
Top 5
Changes this week: None
Near-Term – chronological order
SCYX – ScyNexis – Data releases and resolution of the manufacturing problem
USL United States 12 Month Oil Fund, LP – crude should rise quickly
EQT EQT –natural gas price rebound
CMPS – Compass Pathways – Rebound from negative AdCom review of MDMA and Phase 3 data release in December quarter
FCX Freeport McMoRan – copper shortage
AKBA Akebia Therapeutics – Vafseo TDAPA approval in January
Long-Term – alphabetical order
ABCL AbCelllera – Will become a huge pharma royalty company
UUUU Energy Focus – Domestic uranium supplier
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
PLTR Palantir – a (the?) leader in AI applications software
RKLB Rocket Lab – #2 to SpaceX in space
SCYX ScyNexis –First new antifungal in 20 years
Economy
Today’s third estimate of June quarter real GDP growth was +3.0%, the same as the second estimate and a tenth better than economists expected. That’s more than double the March quarter’s 1.4% and probably the peak. The Atlanta Fed still expects +2.9% in the September period but the Blue Chip economists are still at +1.9%. My guess is the December quarter is meaningfully slower and March is quite weak.
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, September 27
Personal Consumption Expenditures Index – 8:30am – The Fed’s favorite inflation indicator
Tuesday, October 1
EDIT – Editas Medicines – 3:45pm – Chardan Genetic Medicines Conference
Friday, October 4
September payrolls – 8:30am – Wall Street traders can pretend the number means anything. Watch the July and August revisions
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 – $227.52) held up as Citi said iPhone lead times are increasing in the US, UK, and India – a sign of order strength.
The Vision Pro is the success you never hear about. It’s been forgotten by the capital markets because Apple only anticipated 400,000 units to be sold in 2024. With a $3,500 purchase price, that’s only $1.4 billion in revenues, a small portion of Apple’s total revenue. But in the March quarter, Vision Pro captured 47% of the total value created in the category globally, with a 17% unit market share. That means Apple quickly passed Meta right out of the gate. The Vision Pro is now available in key Asian nations like China and Japan as well as Western nations like Germany, France, and the UK. That is going to increase Apple’s market share when they announce September quarter results.
Apple has to improve its products every year, but they can reduce what would otherwise be a brutal R&D spending budget because of the App Store. By leveraging its affluent customer base, Apple attracts the most attention from developers. If you want to start an app business, developing for the iOS store is the first choice. Not only does Apple have a wealthy customer base, but you also avoid the need to create multiple versions for different Android devices. That’s how Apple ensures that third-party developers handle the “innovation” aspect for them. AAPL is a HOLD – I expect to move back to Buy under $175 for new iPhones.
Corning (GLW – $45.28) posted the slides from the optical fiber facility visit I discussed last week (SLIDES HERE ). The three key Springboard slides were:
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GLW is a Buy under $33 for the 5G cellular buildout, followed by the smartphone upgrade to use 5G services. My target is $60 in 2025 .
Meta Platforms (META – $567.84) hit a new all-time high after their two-day Meta Connect conference for developers. The highlight of the event was the Orion prototype mixed reality glasses, which they claim to be the company’s “first true holographic augmented reality glasses.” For now, only company employees and select developers have access to the prototype. They will contribute to the R&D of a consumer-grade version of the augmented reality product.
Second, Zuckerberg introduced the Meta Quest 3s virtual-reality headset, a cheaper version of the Quest 3 from earlier this year, starting from $300 for the base model. It will ship beginning October 15, in time for the holiday season. He also cut the price of the 512 GB variant of the Meta Quest 3 from $650 to $500.
Zuck said new AI features are coming to Ray-Ban Meta glasses. They have advanced partnerships with Spotify and Amazon Music, and signed new ones with Audible and iHeart Radio to improve the audio content experience on the glasses. He unveiled a pair of transparent special edition Ray-Ban Meta glasses, of which only 7,500 pairs will be available.
For its latest open-source AI offering, Meta announced the Llama 3.2, which includes small and medium-size vision LLMs and lightweight, text-only models that fit onto edge and mobile devices, including pre-trained and instruction-tuned versions. It’s their first open-source model that can process images, charts, graphs, and text. They said Llama 3.2 is competitive with OpenAI’s GPT4o-mini and outperforms Google’s AI model Gemma.
Zuckerberg demonstrated new features of the voice options for their AI assistant. Users will be able to talk to Meta AI on Messenger, Facebook, WhatsApp, and Instagram DM and choose from different voice options for their assistant, including celebrities like Dame Judi Dench, John Cena, and Kristin Bell. Meta AI is one of the most used AI assistants across the world with almost 500 million monthly active users, and they haven’t even launched in some of the bigger countries yet, including the EU.
After the conference, Jefferies reiterated its price target of $600. Bank of America raised to $630. JPMorgan expects Meta to rise even higher, to $640. $640 once, $640 twice…ahh, Citigroup raised its target price from $580 to $645. META is a Hold – I expect to move back to Buy under $400.
Palantir (PLTR – $37.10) signed a two-year deal with the National Institutes of Health. What do two years of access to Palantir software cost? $12 million.
They won a multi-year, multi-million dollar contract extension with APA Corp. (APA), a leading oil and gas company, to use AIP software. Palantir already supports APA’s operational planning, supply chain management, maintenance planning, production optimization, and contract management. AIP helps improve production equipment reliability via real-time monitoring, optimize raw material logistics, and detect anomalies in contract and invoice documents.
Palantir was recognized as a top performer by Dresner Advisory Services in the 2024 AI, Data Science, and Machine Learning Wisdom of Crowds Market Study, for the second year in a row. Dresner’s report focuses on AI modeling, machine learning, neural networks, and data mining to analyze facts to make predictions about future or otherwise unknown events. Among the top-rated vendors, Palantir received its highest scores in analytical features and functions, model operations, and usability.
The stock entered the S&P 500 on Monday at the #129 position. A former bull, Raymond James, downgraded the stock from Outperform to Market Perform and removed their $30 target price. But Greentree Research said that given the company’s strong revenue, profit growth, and growing backlog, investment banks will eventually have to get on board and increase their estimates, so Palantir “easily can be a $100 stock.” PLTR is a Buy under $22 for a $100+ target.
PayPal Holdings (PYPL – $80.08) announced a new partnership with “Amazon Buy With Prime.” For participating brands using the Buy With Prime application programming interface (API), PayPal is now available at checkout after shoppers log into their Amazon account. Starting next year, Prime members will be able to perform a one-time link of their Amazon account to their PayPal account so that Prime shipping benefits are available automatically wherever they use PayPal while shopping with Buy With Prime on participating merchants’ websites.
Separately, PayPal is enabling US merchants except in New York State to buy, hold, and sell cryptocurrency from their business accounts. The company has offered crypto to consumers since 2020 with online wallets, and launched a dollar-backed stablecoin in August 2023. PYPL is a Buy under $68 for a double in three years.
SoftBank (SFTBY – $31.22) and NewPhotonics announced a joint research and development collaboration to combine photonics and electronics to create fast optical communication and switching, which helps reduce delays and energy usage in AI data centers and mobile networks.
SoftBank uses NewPhotonics patented technologies along with a photonics integrated chip for dependable all-optical communication and switching in their infrastructure. This is a new direction for CEO Masayoshi Son – instead of an investment, it’s an R&D collaboration. It could become a problem for Cisco. SFTBY is a Buy under $25 for a first target of $50 in the next two years.
Small Tech
Rocket Lab USA (RKLB – $8.69) CFO Adam Spice guested on the Deutsche Bank podcast series Making Sense of Space (AUDIO HERE). He talked about the qualities that separate RKLB from other “new space” upstarts – their vertically integrated end-to-end focus, history of launch success, financial strength, diversification into Space Systems, and ability to move up to medium launch. He mentioned that any employee who wants to spend over $40,000 has to write a business case supporting it, make a presentation to him and CEO Sir Peter Best, and get written approval.
They launched their 53rd Electron mission and deployed five satellites to low earth orbit for Kinéis, the French Internet-of-Things (IoT) company. This was the second of five dedicated Electron launches for Kinéis. Across 53 launches, Rocket Lab has now deployed 197 satellites. There are 66,000 parts in an Electron, and if any one fails it can ruin the mission. RKLB is a Buy up to $13 for my $30+ target as low earth orbit satellites and space exploration grow.
Primary Risk: A new competitor emerges.
Biotech MegaShift
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.
Compass Pathways (CMPS – $6.91) did their final grand tour of brokerage firm conferences with a fireside chat at the TD Cowen Novel Mechanisms in Neuropsychiatry Summit (WEBINAR HERE). They said every patient has open-label access to COMP360 after 26 weeks, which keeps the placebo patients in the trial for the required safety data.
The Phase 3 005 trial data coming early next year will be the six-week efficacy primary data. Later they’ll have the 26-week follow-up data. That’s important because the FDA worries about the “nocebo” effect – placebo patients who think they got the drug and imagine a response. A strong immediate response to the drug followed by a durable effect at six weeks that persists to 26 weeks makes it hard to argue it could be a nocebo effect.
Management fleshed out their differences from the Lykos Therapeutics turndown, but basically said what they’ve been saying: psychedelics and MDMA are different drugs, their trial design is very different, this is not a psychotherapy-assisted trial, and they have followed FDA guidance. They mentioned that the Data and Safety Monitoring Board has not seen a safety signal for suicide.
They are designing a compelling PTSD Phase 2 trial. CMPS is a Buy under $20 for a very long-term hold to a 10x.
Primary Risk: Their drugs fail in the clinic.
Clinical stage of lead product: Phase 3
Probable time of first FDA approval: 2026
Probable time of next financing: Late 2025
Editas Medicine (EDIT – $3.49) presents next Tuesday at the Chardan Genetic Medicines Conference to cap off their series of brokerage firm conferences. Each presentation has been better as they’ve learned what Wall Street wants.
Today, Pfizer pulled Oxbryta, its sickle cell drug, from the market due to patient deaths. Editas has reni-cell in clinical trials for sickle cell and it is likely to be best-in-class. EDIT is a Buy under $6 for a double in 12 months and a long-term hold to much higher prices.
Primary Risk: Other companies’ gene-sequencing drugs fail in the clinic.
Clinical stage of lead product: Partnered: Approved; Owned: Preclinical.
Probable time of next FDA approval: 2025
Probable time of next financing: 2026 or never
ScyNexis (SCYX – $1.51) gets up to $30 million for the achievement of two interim milestones associated with the resumption and continued performance of the MARIO study after the clinical hold is lifted, and $7.35 million for the successful completion of the MARIO trial. 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: 2025
Probable time of next financing: Never
Gold ($2,694.80) hit intraday and all-time highs today as worries about government debt rolled on. The fractal dimension trend is approaching the end-of-trend 30 level.
Click for larger graphic
Miners & Related
Coeur Mining (CDE – $7.51) did a Rochester Mine site visit (SLIDES HERE). This successfully-completed project is a game changer for Coeur and – perhaps more important – how Wall Street views them. Rochester is the largest open pit heat leach operation in North America and the third-largest in the world. It has the largest silver reserve asset in the US, the third-largest in North America, and the fourth-largest in the world.
Click for larger graphic
CDE is a Buy under $5 for a $20 target as gold goes higher.
Primary Risk: Prices of precious metals fall due to US dollar strength.
Sandstorm Gold (SAND – $6.25) did an interview with Crux Investor:
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 – $65,228.12) rose as the SEC approved options trading on my spot bitcoin ETF recommendation, BlackRock’s iShares Bitcoin Trust (IBIT). This is a big win for bitcoin and the ETFs because options will attract more liquidity, which will attract more big capital.
This is the first stage of approval because the Office of the Comptroller of the Currency and the Commodity Futures Trading Commission have to approve as well before the options officially list, but the SEC approval was the big one. They delayed a decision on spot ethereum ETF options.
Bitcoin EFTs are hoovering up nearly 5x the daily supply from miners. On September 24 alone they bought 2,132 coins versus around 450 mined.
Click for larger graphic
BTC-USD, ETH-USD, IBIT, and ETHA are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
iShares Bitcoin Trust (IBIT- $36.84) is up to $20.9 billion in assets and remains the cheapest and easiest way to buy bitcoin.
Click for larger graphic h/t eft.com/IBIT
IBIT is a Buy for the 2028, 2032, and 2036 halvings.
Primary Risk:Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.
iShares Ethereum Trust (ETHA- $20.11) is the cheapest and easiest way to buy ethereum. ETHA is a Buy.
Primary Risk:Ethereum falls due to over-regulation or is surpassed by another cryptocurrency.
Commodities
Oil – $67.46
In the real world, we saw more sharp weekly drawdowns. Crude oil fell 4.471 million barrels, gasoline was down 1.538 million barrels, and distillates fell 2.227 million barrels. Libya finally named a new central bank governor, opening the way to reviving some crude production.
In the pretend world, paper oil prices fell 3.2% today on a Financial Times report that Saudi Arabia, the world’s top crude exporter, will give up its $100 price target in preparation for raising output in December. Two OPEC+ sources told Reuters that the group is set to go ahead with a 180,000 barrels per day oil output increase in December because its impact will be small following a plan for Iraq and Kazakhstan to cut 123,000 barrels per day in September for a few months to compensate for earlier pumping above agreed levels. If they don’t cut – no increase. The overall plan has not changed, but traders are overreacting to the story.
Short positions in Brent oil held by money managers now exceed longs by a record 12,680 contracts. It’s a very crowded trade. As Bloomberg wrote: Crude Oil Primed for Explosive Short-Squeeze as Bearish Sentiment Peaks.
Click for larger graphic h/t @WinfieldSmart
Bloomberg pointed out that US production is stagnant, not growing.
Click for larger graphic h/t Bloomberg
BofA agrees with me that at current levels, the energy sector is a bear trap.
Click for larger graphic h/t @KonekoResearch
The July 2026 Crude Oil Futures (CLN26.NYM – $66.32 ) 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 – $35.37) is a Buy under $40 for a $100+ target.
Vermilion Energy (VET – $9.54) is a Buy under $11 for a target price of $24 or more.
Primary Risk:Oil prices fall.
EQT (EQT – $35.51) is rising with the price of natural gas.
Click for larger graphic
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 – $5.56) and the price of uranium moved up on news of Microsoft’s 20-year power-purchase agreement with Constellation Energy to restart Pennsylvania’s Three Mile Island, the site of the country’s worst nuclear accident, to help power Microsoft’s growing artificial intelligence needs. Under the agreement, Constellation would revive the plant’s undamaged 835-megawatt Unit 1 reactor, which was too costly to run and closed in 2019, and sell the power to Microsoft. Constellation expects to spend around $1.6 billion to restart the reactor by early 2028. Constellation will pursue license renewal to extend plant operations from 2034 to at least 2054. UUUU is a buy under $8 for a $30 target.
Primary Risk: Uranium prices fall.
Freeport McMoRan (FCX – $51.91) moves with copper prices. Historically, as shown in the chart below, key turning points in base metals began with a significant rise in gold prices. Copper prices are likely gearing for another significant catch-up move.
Click for larger graphic h/t @TaviCosta
The move up already has started.
Click for larger graphic
FCX is a buy under $44 for a $65 target within two years.
Primary Risk: Copper prices fall.
* * * * *
* * * * *
Your reading Economic Truths Finally Aired Editor,
Michael Murphy CFA
Founding Editor
New World Investor
All Recommendations
Priced 9/26/24. 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
Corning (GLW – $45.28) – Buy under $33, target price $60
Gilead Sciences (GILD – $83.04) – Buy under $80, target price $120
Palantir (PLTR – $37.10) – Buy under $22, target price $100+
PayPal (PYPL – $80.08) – Buy under $68, target price $136
SoftBank (SFTBY – $31.22) – Buy under $25, target price $50
Small Tech
Enovix (ENVX – $9.33) – Buy under $20; 4-year hold to $100+
First Trust NASDAQ Cybersecurity ETF (CIBR – $59.43) – Buy under $60; 3- to 5-year hold
Fastly (FSLY – $7.52) – Buy under $14; 3- to 5-year hold to $80+
PagerDuty (PD – $18.14) – Buy under $30; 2- to 5-year hold
QuickLogic (QUIK – $7.87) – Buy under $10, target price $40
Rocket Lab (RKLB – $8.69) – Buy under $13, target price $30+
$20-for-$1 Biotech
AbCellera Biologics (ABCL – $2.56) – Buy under $6, target $30+
Akebia Biotherapeutics (AKBA – $1.33) – Buy under $2, target $20
Compass Pathways (CMPS – $6.91) – Buy under $20, hold a long time for a 10x return
Editas Medicines (EDIT – $3.49) – Buy under $6 for a double in 12 months and a long-term hold to much higher prices
Inovio (INO – $5.51) – Buy under $14, hold a long time
Medicenna (MDNAF – $1.39) – Buy under $3, first target $20, then maybe $40
ScyNexis (SCYX – $1.51) – Buy under $3, target price $20, then $50
TG Therapeutics (TGTX – $23.33) – Buy under $12 for buyout at $30+
Inflation
A Short-Sale or REO House – ($415,400) – Hold
Bag of Junk Silver – ($32.31) – hold through silver bull market
Sprott Gold Miners ETF (SGDM – $32.36) – Buy under $28, target price $50
Sprott Junior Gold Miners ETF (SGDJ – $38.35) – Buy under $39, target price $100
Sprott Physical Gold and Silver Trust (CEF – $25.05) – Buy under $18, target price $30
Global X Silver Miners ETF (SIL – $37.45) – Buy under $30, target price $50
Coeur Mining (CDE – $7.51) – Buy under $5, target price $20
First Majestic Mining (AG – $6.54) – Buy under $11, next target price $23
Paramount Gold Nevada (PZG – $0.45) – Buy under $1, first target price $10
Sandstorm Gold (SAND – $6.25) – Buy under $10, target price $25
Sprott Inc. (SII – $44.78) – Buy under $40, target price $70
Cryptocurrencies
Bitcoin (BTC-USD – $65,228.12) – Buy
iShares Bitcoin Trust (IBIT – $36.84) – Buy
Ethereum (ETH-USD – $2,645.61) – Buy
iShares Ethereum Trust (ETHA- $20.11) – Buy
Commodities
Crude Oil Futures – July 2026 (CLN26.NYM – $66.32) – Buy under $70; $200+ target
United States 12 Month Oil Fund, LP (USL – $35.37) – Buy under $40; $100+ target
Vermilion Energy (VET – $9.54) – Buy under $11; $24 target
EQT (EQT – $35.51) – Buy under $35; $70 first target
Energy Fuels (UUUU – $5.56) – Buy under $8; $30 target
Freeport McMoRan (FCX – $51.91) – Buy under $44; $65 target within two years
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.
Apple Computer (AAPL – $227.52) – Expect to move back to Buy under $175 for new iPhones
Meta (META – $567.84) – Expect to move back to Buy under $400
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First!
MM, Do you think EDIT can capitalize on Pfizer pulling Oxbryta?
Ditto!!! Would like know is there a specific catalyst that will cause EDIT to double in 12 months. Also why is it not on the near term?
EDIT’s reni-cel (EDIT-301) is only in Phase 1/2. MM currently projects FDA approval for 2029 and we all know how those projections tend to get pushed out.
He also indicated the big licensing royalty flows will happen after 2030.
We’re five months into the MM’s “double in 12 months” projection and the stock is already down 38%. Hard to see the stock making significant moves that aren’t driven by revenue. Reni-cel isn’t far enough along in clinical trials to drive a big move.
You’ll be holding this for a long, long time before you see much in the way of any news that will move the stock in any material & sustained way.
Unprofitable companies tend to trade in line with their cash position & EDIT’s will be declining for the foreseeable future. MM also projects additional financing (dilution & downward stock pressure) in 2026 but that could happen as early as a year from now.
Thanks, What do you think of SCYX? MM is an extreme bull being at number 1 stock near term. JGMD appears to be a bear. What do you think risk reward is?
JGMD has posted extensively regarding Brexa, how it compares to the competition and his perceived longer-term prospects for the drug. I think he’s spot on and he’s in a much better position to evaluate SCYX’s prospects than I am as I don’t have a medical background.
MMs thinks SCYX is ridiculously cheap. But stocks can be ridiculously cheap for a very long time.
I just don’t see any catalysts that are going to cause a significant revaluation of this stock in the short to medium term. All the short-term catalysts such as the $10M milestone payment, restarting Brexa sales & the Mario study milestones are all well known by the market so are likely already priced in for the most part. It’ll take Brexa sales exceeding expectations to move the stock in a sustained way and we are still several quarters away from even getting any indication what Brexa sales might be once they restart. For the foreseeable future SCYX will plod along, bringing in enough milestone & royalty revenue to cover their operating expenses as they move SCY-247 through the marathon FDA clinical/approval process.
The market will have plenty of time over the next few years to determine how good a drug Brexa is and what that means in terms of their GSK royalties. I think there are much better opportunities elsewhere right now.
Also, I don’t think SCYX now is ridiculously cheap. Stockholder equity is roughly the same as the present market cap. Milestones and royalties will generate cash to keep them afloat while they wait several years for the speculative bonus from 247 if it is better than the competition. Brexa and 247 as a new class of drugs doesn’t mean that doctors will abandon the competition. And the upcoming milestone payment of $30 million if it is not already discounted by the stock price could boost the $57 million market cap by 50% to the low $2 range. My original buy was near MM’s original buy price at about $20. I made the mistake of averaging down too many times. Even with my last buy about 1 year ago at $1.70, I got my average down to $4.70. I am too overweight in this to average down significantly. As you say, it is better to diversify for better, safer investments elsewhere. Most other subscribers are probably in the same boat as I.
So I can buy the first FDA-approved antifungal in 20 years and the first one ever that actually kills the fungus for 1x book value.
To avoid further destruction of subscribers’ and your own wealth, please stop hanging out with financial promoters. Read Pubmed.org and search for the facts from expert medical researchers. FACTS–Brexa is just another drug with a different mechanism of action. That doesn’t mean it is better. You will find studies on several other new drugs, and even better azoles so Brexa has lots of competition. Brexa sales for VVC were mediocre–insufficient to get the stock to do better than merely treading water at this low level. Competition is a big factor that kills most new drugs or devices. Look at only one of many NWI wipeouts–ARTH. It had the best wound care product, but competition from inferior products already entrenched by Big Pharma killed it. Brexa is just another product, and it remains to be seen whether 247 will be anywhere near the best anti fungal. Even if it is shown to be the best, it faces high risks and SCYX may be a bust like ARTH. In the meantime it will tread water in the low $2 area after the damn FDA approves manufacturing and MARIO starts. Most subscribers will take a severe beating from your initial recommended buy price at about $20.
Please show some remorse at the damage you have caused to your subscribers, the latest being VLD. Get real.
Wow,well said
EDIT is also at a high risk of significant dilution in the short-term. Through the first half of 2024 they lost $130M & had a cash burn of $107M. Annualizing that gets a full 2024 loss of $260M & cash burn of $214M.
EDIT has raised capital every year since their IPO except for 2022 & now this year. That’s a primary factor in EDIT’s stock slow downward descent. This year’s disappointing quarterly results also contributed to the recent decline.
Historically, EDIT has raised capital when their Cash + ST/LT Marketable Securities drops close to $300M. That balance was $318M on their Q2 financials & will be below $300M when they report their Q3 numbers so while they have cash to carry them into 2026 history would indicate that they could do a capital raise at any time now.
Analysts are projecting EDITs cash burn to increase to $266M in 2025 so EDIT will likely need to raise a minimum of $250M to $300M over the next year just to keep their cash levels in their comfort level of $300M. With a stock price trading at $3.30ish per share that’s over 90M in new shares which exceeds their current shares outstanding of $82M. Huge dilution that will push the stock price down. Then it’s a situation of rinse & repeat every year until they can get to cash flow neutral, which seems to be at least 5 years out.
EDIT is now in the very unfortunate position, similar to stocks like NVTA, APTO, VLD and others are/were, of having to raise large sums of capital while have a very low stock price. And each capital raise will have erosive effects on the stock price making each additional raise even more dilutive driving the stock price ever lower in the short to mid term. At least EDIT has a brighter long-term future once drug & royalty revenues get them to cash flow neutral.
Thanks for your financial analysis. On VLD, if I had listened to you instead of the blind optimism from MM, I could have lost merely 50% instead of 90%.
Editas Medicine Announces $50+ Million Monetization Financing with DRI Healthcare Trust
https://ir.editasmedicine.com/news-releases/news-release-details/editas-medicine-announces-50-million-monetization-financing-dri
EDIT is selling certain future license fees and royalty payments under its license agreement with Vertex Pharmaceuticals for an upfront cash payment of $57 million.
They are getting creative. Unfortunately, $57 million is only roughly one quarter’s worth of cash burn…
2 more drugs going into Phase 1 trials in 2025, plus some early reni-cell results. That’s the double in 12 months.
Early stage trials are totally speculative. Even if there is a stock advance on results, such stocks usually fizzle soon when the market realizes that company finances are bad. Read Brent’s post from this afternoon, which is a hard nosed factual financial analysis of their death spiral. He was correct on predicting the wipeouts of VLD and others. You were pie in the sky wrong. Brent is a good financial amateur who has more credibility than you with your degree in economics and finance. Why were you wrong? Because you ignored your training in finance and merely engaged in financial fantasy combined with hype from financial promoters.
In order for you to gain credibility, read Pubmed.org and cite articles that show you are doing basic research to gain objective understanding rather than regurgitating promotions from companies and the financial industry.
Eventually. The new Biotech Moonshots covers sickle cell, and here’s what I wrote last Friday below the paywall:
Editas Medicine (EDIT) presents next Tuesday at the Chardan Genetic Medicines Conference to cap off their series of brokerage firm conferences. Each presentation has been better as they’ve learned what Wall Street wants.
Yesterday, Pfizer pulled Oxbryta, its sickle cell drug, from the market due to patient deaths. Editas has reni-cell in clinical trials for sickle cell and it is likely to be best-in-class. EDIT is a Buy under $6 for a double in 12 months and a long-term hold to much higher prices.
MM–on SCYX, I think you are dreaming. Subscriber zman said a while ago that an investor relations person at SCYX said manufacturing issues were resolved, and the responsibility for that PR rests with GSK. Something is fishy. Why did SCYX announce they were applying back to the FDA in Q4 to lift the hold? Because the FDA is a piece of political filth. Refer to my post on the last board. We’ll be lucky to get the hold lifted in March 2025. Then MARIO can begin, etc. Yeah, we’ll be out of SCYX when 247 is approved. Or before that if early trials are mediocre, at severe losses for most subscribers who bought at your recommended entry price many years ago.
Thank you Chris for responding on NGENF. Trading volume has been very low lately. And the stock is not seeing a lot of love. I think because investors think there would be a leak if clinical trials came close to nonclinical trials. May or not be so. I’ve heard cohorts are not supposed to speak of the trial. Also I loved your trade idea on NAT oct 3.50’s. It was an anomaly. That stock should have went much higher pre dividend. It always has. May try it again on the Januarys/December dividend. Too high right now. Just because one idea did’t work doesn’t mean it wasn’t a great idea. Please continue to give us ideas.
Yep. I held those Calls until Tuesday and then took my little loss instead of a big loss by continuing to hold. I think the reason it didn’t work out is because the dividend payout is not until 9 weeks after the ex-date. wth? I bought some Oct $4 Puts at .40 which will be profitable if NAT falls to 3.55 in the next three weeks.
Do have a look at CAPR. I think it will be a big winner before the end of 2025.
So are you suggesting moving on from NGENF, or am I misunderstanding the point?
NO!!! I bot more NGENF this week. The Contract Research Organizing (CRO) has been compiling all the data for each of the clinical trial subjects as the trial has been ongoing. When the final subject has been enrolled (which could be any day now) and completed the 16 week trial, the CRO can plug his or her data in and have its report in to NervGen in a couple of days. If the final participant is enrolled next week, we could have data before the end of January. Good data could easily send shares over $10.
On a recent interview with Dr. Mikol, he said that even just positive electrophysiologic data would be a positive study. Even if positive EP data is not accompanied by clear clinical benefits, do you think that this will boost the stock? I think he implied that positive EP data is being seen, also suggested by Dr. Monica Perez’s past excitement that “we are very, very excited.”
CAPR has a very good drug and it has shown to keep the heart muscle stronger.
Murphy dreams a lot and never updates his pipe dreams. I have lost a fortune, being stupid and going overboard when he hypes the crap out of NVTA- the Amazon of genetic testing. I listened to him and Cathy Wood and went way overboard. How about DNDN- couldn’t lose either? Many others. Same shot week after week with zero updates. INO…it just lost 70% but it can’t lose either- yet he didn’t have the decency to perhaps say sell at $11.00 and it’s just too
Much of a crapshoot.
Agreed,so did i
I actually did the NVTA test and thought it was so cutting edge. Murphy hyping AMAZON, Cathy buying it. I put in 60k like a complete dick. Lost another 50 on DNDN, 15 years ago he was hyping Paramount Gold. Loser after loser because every week his newsletter was the prior weeks text and a few added sentences.
I did the same ,I am right there a total fucking moron believing his hype adding all the way up to 47.00 and then dollars cost averaging all the way down,even my wife calls me a dipshit loser…have a great day jaycee I will never recoup the money I have lost following MM and the newsletters picks..funds to invest..gamble are limited now
suffered the same too – APTO , ARTH too all Beat The Dust – they were supposed to be Gems .
was Ino mentioned in this report ?
Agree , got totally pants with NVTA and others
Let’s see what he says in tonight’s letter. A little too late. SCYX and INO are worth pennies of what we could have sold for last year. He has to stay married to the worst of the shit.
SCYX today at about $1.50 is a reasonable speculation for new buyers. But this is about a 94% decline from MM’s original reco price of $21.90 in 2018.
MM–please refer to my post about 1 week ago about Mark Skousen, an Austrian School of Economics follower. His 1990 book, STRUCTURE OF PRODUCTION laid the groundwork for his gross output concept. Gross Output is the sum of producer and consumer output. Services (consumer) is wrongly thought to be 70% of the economy. It is much less, with the difference due to the earlier stage producer economy. Even the slow moving govt has adopted GO, gross output in its reporting. GO = GDP + producer B2B output.
If Trump wins, US oil production will increase, not remain stagnant, and the price of oil should fall. Drill, baby, drill. Correct?
Mark is an old friend from Investor Place days and a good guy. The only way US oil production can increase is if drillers can get ZIRP capital again or if Trump pays for the wells.
No matter what the interest rate was in the past, oil drillers did well. Shale oil cost of production is cheap. Drillers are chomping at the bit (pun) to get going even if IR won’t be near zero again.
Michael based on the current assay reports and the current share count what range do you see PZG selling for after they get the final permits to begin mining?
Michael in Asheville,
I hope you are avoiding the flooding in Asheville.
Anyone ever bought a watch from the street vendors on NYC’s 5th Avenue? The ones that don’t work at all 2 weeks after you buy them?
That’s what comes to mind with Trump’s newest self-enrichment stunt.
https://www.forbes.com/sites/mollybohannon/2024/09/26/trump-promotes-trump-watches-as-latest-merchandise-endeavor/
Anyone ever vote for a President that Impoverished millions of people and families, let murders rapist and child molesters in the country?
Answer to the question KH never answers. Are you better off today than 4 years ago? American savings is HALF of what it was in 2020. Average credit card debt is $6,218. Interest rates on that debt is now 23 percent on balances. More than half of credit card holders carry a balance from month to month. 590 million active cards are now 40 million more than in 2020. $1.4 TRILLION dollar’s are charged on them at 23 percent interest. The average cost of buying a car (financing) is 7.1 percent in August. Gas is 20 percent higher than 2020. (Not included in CPI imagine that?) The average owners car is 12.6 years old because people are NOT buying new ones!! The average mortgage payment is $3010. Per month now compared to $1566 in 2020. Home insurance premiums average is $1,765. Was $1,164. in 2020. If you don’t own a home, try finding one that is for rent that you can AFFORD!! So , are we better off now? Let the voters decide. Totally agree with your post.
Good important question. This is why Kommies don’t have any fairness in elections. They are rigged to create a sham illusion that the people voted to continue the reign of terror of the Kommies. If the people had fair elections they would immediately vote out the rulers. Latest example is Venezuela. Another tactic is to have the media engage in lies and protect the Kommie candidate from answering the questions. You know exactly what I am talking about. Liberal liar deniers don’t.
Israel killed Hassan Nasrallah and 15 of his henchmen/bodyguards on Friday. The US is sending more troops and assets to the Middle East because of the fear of pushback from Hezbollah and Iran. Net-in-yahoo is making Joe look like a Boy Scout. Now Iran’s leader is hiding somewhere out of sight. Why they didn’t do this on October 7, two years ago, we will never know!!
Who was president when the government neglected the Pandemic Handbook, shut down businesses and these 2 crossed the border? (Hint: His initials were DJT)
Suspect in rape at Maryland school was stopped 7 months ago by Border Patrol
By Dan Morse and Donna St. George
March 20, 2017 at 7:56 p.m. EDTOne of the two suspects accused of raping a 14-year-old student at Rockville High School was picked up by a U.S. Border Patrol agent in Texas seven months ago, determined to have illegally entered the country, and issued a notice to appear in immigration court, federal officials said Monday.
The suspect, Henry Sanchez-Milian, 18, arrived in Montgomery County around that same period, according to records filed at Montgomery County District Court. He was placed in ninth grade at Rockville High School, as was the other suspect, Jose O. Montano, 17, according to a court hearing last week.
Montano has been charged as an adult in the case.
Montano is accused of pushing the 14-year-old student into a boys’ bathroom during school hours Thursday morning and then forcing her into a stall as she tried to hold on to a sink, according to police affidavits filed in court. Inside the stall, he and Sanchez-Milian, whose name also is spelled as Sanchez in court records, took turns attacking the girl, according to court records.
You pick an isolated example of a bad error of immigration authorities under DJT. Far worse is the wanton flooding of immigrant entry under Biden/Harris with many times more illegals coming under B/H than DJT. This is deliberate, as a way to get more Dem votes to replenish votes lost from smart Dem voters who won’t continue to vote Dem after witnessing their major cities and other aspects of life destroyed by Dem administrations. Crime rates in Venezuela have dropped by that govt throwing out obvious criminals, with a resultant rise in crime in many regions of the US. It is impossible to vet the flood of illegals.
But I’ll tell you about a case where I exercised judgment in advocating for a woman who has been in the US as an undocumented immigrant since 2003. She is the wife of my patient from Ghana who is hard working. Frankly, I don’t know whether he is also undocumented, and I have not met her. I treat him for diabetes and other conditions. He is sincere and appreciates my care, coming from another state. His wife is a good homemaker and helps him follow a strict diet. He told me he is worried about whether she will get deported if Trump wins. I wrote a letter explaining all this, to be used by my patient’s lawyer to help his wife stay with him.
The point of all this is to show that individual case analysis is important, but border agents and the legal system are unable to properly vet the deliberate deluge of immigrants under the failed management of Biden/Harris. If Trump wins, I don’t know whether he will be able to implement a proper system of vetting individual cases of illegals already here under B/H. The sabotage of the legal system under B/H has made that job nearly impossible. Certainly Trump will be able to prevent criminals from entering under his tenure. Hopefully, since his wife has been here since 2003 with no criminal record, she will stay.
Beyond this immigration issue is the general fact that Dems advocate big govt with federalization of issues that are best handled at a local govt level. It is easier to get to know local officials who can understand individual needs better than distant Fed bureaucracies.
Nice recommendation Chris on Capr,it is rocking
With the exception of his NAT calls ALL of his recommendations are from BioPub, they are not “his” recommendations as he often makes it seem. He just takes whatever information or recommendations BioPub shares with their paid subscribers and comes here and post the same information, often times word for word. I’m members of both.
Chris has been upfront where his ideas come from. But he has been especially helpful to explain some of the detail instead of just passing on symbols. Glad to hear you’re involved as well and hope you’ll share your insight and knowledge.
I’m in agreement with Larry. I believe Chris has been transparent about the source of the investment ideas that he posts here.
I appreciate the investment suggestions & updates that he provides. They seem more promising than almost all of MM’s biowrecks.
I have posted to subscribers here that they should consider subscribing to Biopub.co to get in depth coverage of various investments which are also covered by New World Investor (as well as investments not covered by NWI). If they did, they would have given up long ago on Aptose, Inovio and Scynexis, all of which Biopub.co covered, but then dropped years ago. Some of the private placements offered to Biopub investors have also been very interesting, including early raises by Nervgen and more recently Yuva. At the same time, I wouldn’t go anywhere near certain investments covered by Biopub such as KNW or Digital Prime. Capricor was covered by Dr. KSS all the way back to his days at Stock Gumshoe and he has continued to endorse the stock since he started Biopub, but for years money invested in Capricor was dead money. A few months ago, Biopub recognized that CAPR was very underpriced, given upcoming Phase 3 results and a month ago could be bought around $4. Then the CEO’s conference on Sept 24 surprisingly revealed that the FDA asked CAPR to file a BLA forthwith, igniting the fuse that launched CAPR from about $5 to over $14 today. I think it will at least double and likely triple from here by the end of 2025. Will it go even higher? Possibly, but a prudent investor will take profits when he realizes a stock is near fair value and move his money into other undervalued issues.
CAPR was a great idea before it skyrocketed only a few days ago. No doubt, the product will get approved and have good sales. But at $14-15, it is speculative about whether it will eventually double or triple from here. Most professional investors take profits immediately on approval, because there is no guarantee that sales will live up to expectations.
More generally, the geometric mean is a line in the sand. For example, if a stock bases at $1, spurts to $3, and the anticipated target is $9, then $3 is the geometric mean. The easy money is made going from $1 to $3, but duplicating the triple to $9 is much harder. Most financial promoters use the arithmetic mean between 1 and 9, which is $5. This is wrong, because such a stock would have already risen from $1 to $5, and then the target of $9 is only a 1.8 factor rise. There is too much downside risk at 5.
For CAPR, I will be interested if it corrects below $10 or so.
For SCYX, I give Biopub credit for dropping it. They have smart doctors on board, unlike MM who just follows the community of financial promoters. I advised him to read Pubmed.org. It is technical, but any smart layman can get the gist of what is being said. Pubmed has lots of narrow research studies, but also review articles that can be understood widely. Older articles may not have abstracts, but after about 1990 abstracts are available. Occasionally free Pubmed Central full texts and publishers with open access are available, so that is most useful. The search function has been simplified and improved over the years. Type in the search box, or the single citation matcher if you want to retrieve an article. Or type in the first author to get it more quickly. For SCYX, typing in just “Brexafemme” will do. I found review articles mentioning these other new anti fungal drug candidates. That’s how I came to my assessments. I also read the studies on the SCYX website, and I wasn’t that impressed.
I am modelling revenues of $600 M for CAPR in 2026. Double that with approval for Beckers Muscular Dystrophy. Current Mkt Cap under $500 will at least double on approval if not before. The biggest risk I see is that the FDA sends the BLA back due to some technical deficiency. I hope CAPR will hire some experts to help with the filing of the BLA and not try to get it right by themselves.
Thanks. I’ll learn more about CAPR. Stocktwits has some excellent posters.
I read the CAPR research briefly. Skeletal and cardiac muscle studies showed slowed deterioration which is better than nothing. There was a slight benefit in left ventricular ejection fraction (LVEF) in patients with LVEF over 45%. To give you perspective, normal LVEF is 60-80%. My father had heart disease after age 70, with LVEF of 30%. He could get around by himself reasonably well, and of course he didn’t have the skeletal muscle impairment of those unfortunate muscular dystrophy patients. He lived to 92. MD patients have severe inflammation in the entire body, especially for lung and heart muscle function, so they don’t live long. CAPR’s drug reduces muscle inflammation reasonably safely. The mainstay of current therapy is corticosteroids for their anti-inflammatory effect, but side effects are horrible.
Here’s a citation from Pubmed.org. Just search “muscular dystrophy carnitine” for lots of research on concepts of disease. Ref 4 is the following. Search the 1st author to get the article. At the end of that article, see ref 14 for a nutritional study using l-citrulline, metformin. There was a clinically interesting benefit which didn’t show statistical significance.
The metabolomic plasma profile of patients with Duchenne muscular dystrophy: providing new evidence for its pathogenesisHuayan Xu # 1, Xiaotang Cai # 2, Ke Xu 1, Qihong Wu 1, Bei Xu 3 4
Pubmed only contains peer reviewed studies, and many holistic anecdotes are sneered at by the academic publishing cartel. Many years ago, I remember reading how a few naturopaths used coenzyme Q10 in MD. There are lots of studies about the benefits of Q10 for improvements in LVEF. The best approach is to combine anti-inflammatory treatments with nutritional treatments to improve mitochondrial energy production.
My overall feeling is that CAPR is a highly speculative situation. Will phase 3 be successful? Will the FDA approve it on very small numbers of phase 3 patients? Clinical benefits will probably be very modest. Life expectancy will probably be prolonged only a little. All these criticisms are also true about cancer chemotherapy, a very lucrative business.
I agree with you that the FDA could send the BLA back with a CRL. It could be for a technical deficiency or that a large enough trial cannot be done or that the interim reports are mediocre. That would be a buying opportunity for the long haul, but the stock is in a mania now with a Yahoo Finance article saying it is the best buy now in the Russell 2000.
NGENF looks like a better bet now. The stock has not run up, so although NVG 291 hasn’t been shown to work in humans yet, it is in a better position to be 10-100X than CAPR which at $17 already discounts commercial success. You probably got in around $4-5, so you can afford to hold CAPR or maybe take some profits.
I still think TGTX at $22 offers the least risky way to be 2-10X from here. The improvements in MS patients on Briumvi are huge and life-changing. MS is a much more common disease than MD. Even AKBA has Vafseo which works. The target market for it is a large 500,000 patients. At its low price of $1.30, its upside potential is 4-20X in several years.
Thanks MM for your message on INTC on the 19 th RR. I agree with your post. I bought INTC 217 shares today at $23.00 and change. A fire sale IMO.
45,000 Longshoremen went on strike at midnight. Every port from Maine to Texas is shut down. Estimated costs is 5 Billion a day. Now the shippers will have to reroute the ships to the West Coast costing $$$$ more. Guess what that does for the costs of goods and inflation? (If you can even get the stuff) Joe could have stopped it with the Taft Hartley but chose NOT. OMG just before the election and the holidays around the corner. Stock up asap. Groceries, gas, cars, furniture, everything gets here by ship. Could cause more company bankruptcy.
Good points. Joe’s base includes unions, so that’s why he won’t invoke the Taft Harley Act. Unions have been strong Dem supporters, so I wonder how Trump convinced the Teamsters to withdraw support for Dems. It is interesting that many smart Dems joined Repubs in getting the Taft passed in 1947.
New World Investor for 10.3.24 is posted.