Radar Report – 5.19.22

Michael Murphy
Uncategorized
2022-05-20
19
May 22

Dear New World Investor:

Well, I know this feels bad.

But for the second time in a week, the S&P 500 touched the bear market trigger (3855 – down 20% from its all-time high) and bounced. Yet sentiment is extremely negative. Nearly $81 billion exited stock and bond funds in April – the largest move since March 2020, during the height of pandemic fear. When investors redeem $1.00 from a Nasdaq 100 (QQQ) fund, they are selling 13 cents of Apple, 11 cents of Microsoft, 8 cents of Google, 6 cents of Amazon, and 4 cents of Tesla. That’s 42 cents of every $1.00 sold from five stocks and explains the weakness in Big Tech.

Cash levels among institutional investors hit the highest level since September 2001, with BofA describing its survey results as “extremely bearish.”

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Retail investors feel the same way. The American Association of Individual Investors bull/bear ratio is close to its lowest levels of March 2009 and October 1990. AAII bears hit 50.4% and the four-week moving average is the highest since the Great Financial Crisis.

Jared Dillon, who writes The Tenth Man newsletter (free), said: “If you believe the Fed will blink and pause its rate hike campaign, then you should buy risk assets with veins popping out of your neck. If you think the Fed will follow through on its promise to get inflation back to 2%, then you should prepare for one of the all-time great bear markets. Those are your choices. And they are binary—there is no in-between. The Fed will blink because it has a track record of doing what is expedient rather than what is right.”

I agree. I think the Fed won’t raise the funds rate more than another percentage point, and the minute Chairman Powell gives the slightest hint of backing off, there will be a rip-your-face-off rally. This chart of market corrections during midterm election years (blue bars) and market performance one year after the correction ends (red bars) tells the tale.

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As my friend and fellow newsletter writer Keith Fitz-Gerald just wrote, most people fail in the markets because they lack the long term patience to deal with short-term noise.

Market Outlook

The S&P 500 lost 0.7% since last Thursday, but that included yesterday’s 4.04% one-day decline, the S&P 500’s largest one day point and percentage drop since June 11, 2020. Yesterday was a 17:1 down day (declining volume/ advancing volume), the worst day since 6/24/2020. The Index is down 18.2% year-to-date, but over 60% of the stocks are down more than 20%.

The Nasdaq Composite gained 0.5% but still is down 27.2% for the year – bear market territory. The small-cap Russell 2000 also gained for the week, up 2.1%, but still is down 20.9% in 2022 – also bear market territory, even if only by a bit.

The fractal dimension is heading rapidly towards an end to this downtrend, which could come anytime. Even a sideways move from current levels will cause the fractals to fall to 30.

Top 5

Changes this week: None

Near-Term – chronological order
OIL iPath Pure Beta Crude Oil Exchange-Traded Note – crude should rise quickly
GBTC Grayscale Bitcoin Trust – Bitcoin is coming out of one of its periodic sharp drops
FB Meta – Bounce from overdone selloff
VLD Velo3D – Rapid revenue growth; low market cap

Long-Term – alphabetical order
ARTH Arch Therapeutics – High-value wound care and hemostat for surgery
CWBR CohBar – mitochondria drugs and life extension
GRPH Graphic Bio – second-generation genetic editing
NVTA Invitae – the winner-take-most of genetic testing
FB Meta – a leader in the metaverse

Economy

The number of Americans seeking first-time jobless benefits surged to 218,000 last week – its highest since mid-January and above last week’s 203,000 and economists’ expectations for 200,000. This is the biggest eight-week rise in jobless claims since the growth scare in December 2020-January 2021. It is not seasonal.


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The Atlanta Fed’s GDPNow model for the June quarter is up to +2.4% growth, but much of that is from the “base effect” comparing to the recovery from the virus in 2021. The June number will be announced on July 28, and a possibly much weaker September quarter number will be announced on October 27, right before the midterm elections. Global growth looks like 2.2% for the year, all due to the base effect. I expect a recession in 2023.

Virus Update

Worldometers now shows 525,478,228 worldwide confirmed infections, of which 501,524,508 have run their course. Of those, 495,227,989 recovered and 6,296,519 died – the fifth week in a row at the new low case fatality rate of 1.3%.

In the US, there have been 84,760,335 confirmed infections, of which 82,496,553 have run their course. Of those, 81,468,407 recovered and 1,028,146 died, the third week in a row at the all-time low case fatality rate of 1.2%.

Hospitalizations continue to slowly increase

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But daily deaths are down to 259.

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Coming Events
All times below are ET, and most of the presentations and slides are archived on the companies’ websites so you can listen to them.

Monday, May 23
GRPH – Graphite Bio – 10:00am – UBS Global Healthcare Conference

Tuesday, May 24
CWBR – CohBar – 7:00am – HC Wainwright Global Investment Conference
AKBA – Akebia – 7:00am – HC Wainwright Global Investment Conference
GLW – Corning – 8:50am – JPMorgan Global Technology, Media and Communications Conference
Short Interest – After the close
QUIK – QuickLogic – 4:30pm – HC Wainwright Global Investment Conference

Wednesday, May 25
SCYX – ScyNexis – 11:00am – HC Wainwright Global Investment Conference

Thursday, May 26
March quarter real GDP – 8:30am – Second estimate; -1.4% expected (unchanged)
ACRDF – Acreage Holdings – 12:00pm – Annual meeting

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 12 speculative biotechs might be a good way to start.

The market capitalizations of these recommendations typically are very low. At the same time, Initial Public Offering valuations have moved very high. We are seeing $750 million to $900 million valuations for a good preclinical/Phase 1 IPO, and even $300 million to $500 million for mediocre Phase 1s. I don’t see how investors make 5x to 10x in a reasonable, three- to four-year period. How many biotechs have moved north of $10 billion within 5 years after pricing an IPO in the $700 million to $900 million range? Hardly any. 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 much better 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.

Aptose Biosciences (APTO – $1.05) presented at the RBC Global Healthcare Conference (AUDIO HERE). They said they should have new data for three or four -239 patients at the highest dose. We’ll get a thorough update at their Key Opinion Leader/Corporate Update meeting on June 2. APTO is a Buy under $4 for a $45 target in a buyout.
Primary Risk: Either drug fails in clinical trials.
   Clinical stage of lead product: Phase 1a
   Probable time of first FDA approval: 2025
   Probable time of next financing: mid-2023

Arch Therapeutics (ARTH – $0.08) filed their March quarter 10-Q. They had an abysmal $3,130 in revenues. When I recommended Arch, I thought they had a dramatically better product and could get FDA approval on a shoestring – and I was right about that. I also thought the strategy of seeding Key Opinion Leaders with free product rather than building an expensive sales force made sense. It looks like I was wrong about that.

To put the quarter in perspective, there were about 9,000 foot amputations due to diabetic foot ulcers in the three months. So around 9,000 doctors took part or all of someone’s foot off rather than try AC5. And 9,000 payers ponied up for the surgical, hospital, and rehab bills rather than saving 98% by requiring doctors to try AC5 first. Of course, 9,000 patients gave up part or all of their foot rather than try AC5 for three weeks or so. Only one of those participants had to say: “Try AC5 first.” None did. Remarkable.

My guess is that CEO Terry Norchi is about to decide – or has already decided – that his gamble in leaving a million dollar a year job at Putnam to start Arch 10 years ago has failed. His equity position has been diluted by more than 50% and Arch finished the quarter with only $54,405 in cash and over $1.2 million in accounts payable. They probably are funding the company with At-The-Market stock sales. He should be able to get $1 to $2 a share for the 300 million shares of stock outstanding from either Johnson & Johnson or Baxter, whichever one wants to dominate the high-end wound care market. So I am with great sadness moving ARTH to a Hold for a buyout.
Primary Risk: AC5 fails to sell or the internal trial fails.
   Clinical stage of lead product: External approved. Internal trial 2022
   Probable time of first FDA approval: External done. Internal 2023
   Probable time of next financing: June 2022 quarter

CohBar (CWBR – $0.20) reported a March quarter loss of $3.3 million or four cents a share, in line with expectations. On the conference call (TRANSCRIPT HERE), management said their preclinical work getting CB5138-3 ready for an Investigational New Drug is on track.

They are continuing to “explore potential partnerships” for CB4211, but my attitude towards this is show me the money.

They finished the quarter with $23.5 million in cash and no debt. They’ve cut costs and are funded into the second half of 2023, but they only have until November 7 to get the stock price over $1 and avoid a reverse split. If they can partner CB4211, they could do that. CWBR is a Hold for the human trials of CB5138-3.
Primary Risk: Their drugs fail in the clinic.
   Clinical stage of lead product: Phase 1
   Probable time of first FDA approval: 2025
   Probable time of next financing: March 2023 quarter

Graphite Bio (GRPH – $2.29) gave a fireside chat at the RBC Global Healthcare Conference (AUDIO HERE). Management said they have much higher efficiency in repairing genes because they have optimized every step in the process – identifying the defective cells, priming them to get ready to be edited, optimizing the delivery technology, executing the gene repair, and measuring the degree of success.

They presented preclinical data on their next gene therapy, GPH102 for beta-thalassemia, at the American Society of Gene and Cell Therapy annual meeting. GPH102 replaces the mutated beta-globin gene with a functional gene that normalizes the hundreds of mutations in the beta-globin gene that cause beta-thalassemia and restores adult hemoglobin expression to healthy levels. They plan to submit an Investigational New Drug Application by mid-2024.

GRPH is a Buy under $26 for a $50 target in 2022, $100 in 2023, and then higher.
Primary Risk: Their drugs fail in the clinic.
   Clinical stage of lead product: Phase 1
   Probable time of first FDA approval: 2025
   Probable time of next financing: 2023 or 2024

Invitae (NVTA – $3.72) announced an expanded 38-gene pharmacogenomics (Pgx) panel that analyzes a patient’s genetics and co-medications for their impact on drug and dose personalization. Nearly one in four patients has been prescribed medications for which they are predicted to have an atypical response due to their genetics. Invitae believes PGx testing is poised to become the standard of care across all medical prescribing if – and this is a big IF – healthcare providers recognize the utility of PGx testing and implement it in their practices. PGx can reduce adverse drug effects, including side effects and treatment failures, save time, reduce costs, and improve patient care.

Medicare local coverage determinations are aligning PGx testing coverage with the evidence. Congress also recently introduced the Right Drug Dose Now Act to increase awareness of and access to PGx.

Buy NVTA under $50 for a first target of $100 and eventually $200+ when they become the Amazon of genetic testing.
Primary Risk: A competitor starts taking significant market share.
   Clinical stage of lead product: NM
   Probable time of first FDA approval: NM
   Probable time of next financing: Not needed

Biotech MegaShift

Akebia Therapeutics (AKBA- $0.35) got a notice of termination from Otsuka of their licensing agreement for vadadustat outside the US except Japan, where it is approved and marketed by Mitsubishi Tanabe Pharma. Akebia said they will continue the European Medicines Agency approval process, which is well underway. In March, Otsuka also submitted applications for regulatory approval in the United Kingdom, Switzerland, and Australia.

They also said they got the expected Nasdaq delisting notice and have until November 8 to get their stock above $1 a share, which could include the dread reverse split. We’ll see what the FDA says and then decide what to do. AKBA is a Hold for the FDA meeting on vadadustat.
Primary Risk: Vadadustat not approved.
   Clinical stage of lead product: Vadadustat NDA filed
   Probable time of next FDA approval: March 29, 2022
   Probable time of next financing: June quarter of 2022

Other Tech

QuickLogic (QUIK – $5.89) reported March quarter revenues up 83.0% from last year to $4.1 million, just above the $4.0 million estimate. New product revenue was up 29% from the December quarter to $3.5 million as their strategy starts to really kick in.

Their gross profit margin expanded again, hitting 60.1%. They lost six cents a share pro forma, a penny better than the seven-cent loss estimate.

On the conference call (TRANSCRIPT HERE), management said they will be profitable by the middle of this year and report profits for the September quarter. They have several seven-digit Intellectual Property bids in process, and these carry very high profit margins. QUIK generally starts receiving a low-single-digit annuity royalty stream 12 to 15 months after winning. Once they are designed into an application, the tail will last for several years, if not decades.

For the June quarter, they guided for $4.5 million in revenue ±10%, composed of $3.6 million of new products and $0.9 million of mature products. The expect a pro forma loss of two cents to four cents a share, with a stretch goal of breakeven. CEO Brian Faith said: “I am more confident in our ability to get to our revenue goal of $20 million. The revenue cadence will still be weighted more to the second half of 2022…As good as the improvement has been over the last year, I believe the next 12 months will be even better.”

Later, Brian said he wants to hit $30 million in 2023. QUIK only has 12.3 million shares outstanding, so that would put the stock well into double digits. Beyond that, QuickLogic is developing a chiplet strategy that can get them into sub-10-nanometer nodes and drive them towards $100 million in revenue. Brian discussed this recently in an Open Compute Project presentation (starts at 2:18:58):

QUIK is a Buy up to $10 for my $60 target as their sensor hub is widely adopted in smartphones, tablets and wearables.
Primary Risk: New sensor hub competitor emerges.
   Probable time of next financing: None needed

Rocket Lab USA (RKLB – $4.75) reported March quarter revenues up 123.7% from last year and 48% from the December quarter to $40.7 million, just above the $39.85 million estimate. They lost six cents a share, a penny worse than the five-cent loss estimate.

On the conference call (SLIDES HERE and TRANSCRIPT HERE), management said their backlog more than doubled in 90 days, from $241 million at the end of December to $564 million at the end of March and then to $551 million today.

After the end of the quarter, they successfully launched two more missions deploying 36 commercial satellites, bringing their total deployed count to 146. They also succeeded in their mid-air helicopter catch of a returning Electron booster, an expensive component that appears to be in good shape.

They guided for June quarter revenues between $51 million and $54 million, slightly under the $55.94 million consensus estimate. Revenues from three launches will be $19 million and Space Systems revenue will be $32 million to $35 million.

I think Rocket Lab will be the second-biggest winner from the space race, behind SpaceX. SpaceX is currently valued at $125 billion. Rocket Lab is valued at $2.65 billion. That seems like an excessive gap. 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.
   Probable time of next financing: None needed

Inflation MegaShift

Gold ($1,839.90) bounced back from last week’s biggest weekly loss since last June and fourth straight weekly decline. There’s a real probability that Russia and China will back their currencies – or central bank digital currencies – with gold. That would put gold up $500 overnight.

The fractal dimension is stalled in consolidation – what else is new? – with tons of energy to fuel the next trend.

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 – $29,997.00) is fighting to stay above $30,000. I read the new Andreessen Horowitz State of Crypto report and came away thinking the right thing to do is buy bitcoin at a discount via GBTC and etherum at a discount via ETHE, and continue to avoid the Wild West of alt coins and crypto projects.

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BTC-USD, ETH-USD, GBTC and ETHE are Strong Buys.
Primary Risk: Bitcoin falls due to over-regulation or is surpassed by another cryptocurrency.

Oil – $111.62

Oil rose today on news that the US is considering sanctioning countries that buy Russian oil. Gasoline hit $4.589 per gallon, over $4.50 for the first time ever and up 51% from last year. Diesel is up 76% to $5.577 per gallon and near $7.00 in New York. I expect $7 gasoline across the country by the end of the summer driving season ($8 in California – sorry, guys). The price of crude oil is up about 13% since Russia invaded Ukraine, but gasoline is up 33% (equivalent to $155 oil), New York diesel is up 69% (equivalent to $175 oil), and New York jet fuel is up over 135% ($275 oil).

Despite much higher Russian crude exports, OPEC+ crude exports are now down year-to-date.

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In the US, the lower the number of drilling rigs, the less supply will come to market. The higher the rig count, the faster supply can catch up. Supply is governed by rig count. In 2014, the rig count was about 1,600. As you can see, hundreds of rigs shut down during the great oil bust of 2020:


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Oil prices were way below the “breakeven” price at which oil companies can start to turn a profit. So instead of running at a loss, it made more sense to close up shop. The rig count fell below 200 in 2020 for the first time in at least a decade. Today it is 552, about 1/3 of 2014.

Last week, the US drew down commercial crude inventories by 3.4 million barrels despite a five million barrels Strategic Petroleum Reserve weekly release. And it’s only mid-May! Refineries are running at over 95% of operable capacity. Saudi energy minister Prince Abdulaziz bin Salman said: “When in our lifetimes have we seen refining margins of $47 to $50 a barrel? It tells you that there is no refining capacity commensurate with the current demand and expectation of demand this summer.”

More than one million barrels a day of the country’s oil refining capacity — or about 5% overall — has shut since the beginning of the pandemic. With demand for gasoline and jet fuel practically vanishing during the height of the pandemic, companies closed some of their least profitable crude-processing plants permanently. Elsewhere in the world, capacity has shrunk by 2.13 million additional barrels a day. With no plans to bring new US plants online, even though refiners are reaping record profits, the supply squeeze is only going to get worse.

The eventual transition toward cleaner energy makes refinery long-term business model unprofitable and makes them less likely to attract buyers. By the end of 2023, as much as 1.69 million barrels of US capacity is targeted for closure compared to 2019 levels. With California unveiling this week a roadmap to slash oil use by 91% from 2022 levels by 2045 and other places moving to limit fossil-fuel use in the decades ahead, refining companies can see the writing on the wall. It’s a 15 to 20 year payback on most refinery investments.

At the same time American refining shrinks, the war in Ukraine has made the global divergence between supply and demand even more acute. With many countries shunning Russian fuel exports in the wake of the war, the US is now supplying more of the world’s fuel with an ever-shrinking fleet of plants. Europe has been seeking alternatives to Russian diesel since the war began, while fuel demand in Latin America, the largest buyer of US refined products, is strong and growing. Meanwhile, the US is itself gearing up for a spike in consumption this summer.

And just to remind you, on Tuesday, November 9, 2021: “U.S. Sees Oil Market Oversupplied by Early Next Year: Supply increases next year from OPEC nations as well as U.S. drillers will ultimately pressure prices lower. The U.S. benchmark crude will fall below $80 a barrel by December and reach as low as $62 by the end of next year and its global counterpart Brent will average $72 a barrel in 2022, the Energy Information Administration said in its Short-Term Energy Outlook on Tuesday. U.S. pump prices will drop below $3 a gallon by February, the data show.” – Bloomberg

The July 2026 Crude Oil Futures (CLN26.NYM – $53.16) are a Buy under $55 for a $200+ target.

The iPath Pure Beta Crude Oil Exchange-Traded Note (OIL – $34.50) is a Buy under $24 for an $80+ target.

Energy Fuels (UUUU – $6.01) reported March quarter of revenues $2.94 million, up a ridiculous 740% from last year. They lost $14.9 million or nine cents a share. They produced approximately 60 metric tonnes of mixed rare earth element (REE) carbonate, containing 30 metric tonnes of total rare earth oxides. The carbonite contained 32% to 34% neodymium-praseodymium (NdPr) oxide, the most advanced REE material being produced in the U.S. today. They said they are in active discussions with several sources of natural monazite sands around the world to significantly increase the supply of feed for their growing REE initiative.

On the conference call (AUDIO and SLIDES HERE and SLIDES HERE), management said US uranium and nuclear fuel suppliers like Energy Fuels are seeing increased interest from US utilities as a result of the $6 billion Civil Nuclear Credit Program, which prioritizes reactors that purchase nuclear fuel and uranium from US suppliers.

Today they said they are acquiring 17 mineral concessions totaling more than 37,000 acres of land in Brazil’s Bahia state for $27.5 million. Based on historical drilling, the Bahia Project likely holds significant quantities of heavy rare earth minerals, including monazite, to feed its US-based rare earth element supply chain.

They company finished the quarter with $105.8 million in cash. UUUU is a buy under $11 for a $30 target.
Primary Risk: Uranium prices fall.

* * * * *

Let’s follow the science with Dr. Fauci.

* * * * *

Your reading Kuppy on inflation Editor,

Michael Murphy CFA
Founding Editor
New World Investor

All Recommendations

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.

$20-for-$1
  Aptose Biosciences (APTO – $1.05) – Buy under $4, ultimate target $45
  Bellerophon Therapeutics (BLPH – $1.04) – Buy under $11, first target $30, then $300
  Compass Pathways (CMPS – $8.35) – Buy under $36, hold a long time for a 10x return
  Graphite Bio (GRPH – $2.29) – Buy under $26, hold a long time
  Inovio (INO – $1.97) – Buy under $21, hold a long time
  Invitae (NVTA – $3.72) – Buy under $50, first target $100, then $200+
  Medicenna (MDNA – $1.02) – Buy under $4, first target $40, then maybe $80
  ScyNexis (SCYX – $2.10) – Buy under $12, target price $27, then $85

Other Biotech
  TG Therapeutics (TGTX – $6.04) – Buy under $7, target price $25+

Tech Dominators
  Corning (GLW – $35.52) – Buy under $33, target price $60
  Meta (FB – $191.29) – Buy under $320, target price $400
  Gilead Sciences (GILD – $63.27) – Buy under $105, target price $130
  SoftBank (SFTBY – $19.83) – Buy under $30, target price $60

Other Tech
  First Trust NASDAQ Cybersecurity ETF (CIBR – $39.82) – Buy under $32; 3- to 5-year hold
  Fastly (FSLY – $12.12) – Buy under $45; 2- to 5-year hold to $150+
  PagerDuty (PD – $23.85) – Buy under $40; 2- to 5-year hold
  QuickLogic (QUIK – $5.89) – Buy under $10, target price $60
  Liberty Media Acquisition Corporation (LMACA – $9.82) – Buy under $10.50, target price $20 to $30
  Rocket Lab (RKLB – $4.75) – Buy under $13, target price $30+
  Velo3D (VLD – $2.66) – Buy under $11, target price $50

Inflation
  A Short-Sale or REO House – $375,300 – Buy while fixed mortgage rates are low
  Bag of Junk Silver – $21.90 – hold through silver bull market
  Sprott Gold Miners ETF (SGDM – $27.98) – Buy under $25, target price $50
  Sprott Junior Gold Miners ETF (SGDJ – $35.83) – Buy under $39, target price $100
  Sprott Physical Gold and Silver Trust (CEF – $17.64) – Buy under $15, target price $30
  Global X Silver Miners ETF (SIL – $30.51) – Buy under $30, target price $50
  Coeur Mining (CDE – $3.68) – Buy under $10, target price $20
  First Majestic Mining (AG – $8.34) – Buy under $15, next target price $23
  Paramount Gold Nevada (PZG – $0.52) – Buy under $5, first target price $10
  Sandstorm Gold (SAND – $6.54) – Buy under $10, target price $25
  Sprott Inc. (SII – $36.61) – Buy under $30, target price $70

Cryptocurrencies
  Bitcoin (BTC-USD – $29,997.00) – Buy
  Grayscale Bitcoin Trust (GBTC – $19.53) – Buy
  Ethereum (ETH-USD – $2,010.42) – Buy
  Grayscale Ethereum Trust (ETHE – $13.38) – Buy

International & Other Recommendations
  EMQQ Emerging Markets Internet & Ecommerce ETF (EMQQ – $29.06) – Buy under $38 for a $66 target in 12 to 18 months
  KraneShares Bosera MSCI China A Share Fund (KBA – $33.59) – Buy under $34 for a three- to five-year hold
  Morgan Stanley China A-Shares Fund (CAF – $14.80) – Buy under $24 for a three- to five-year hold
  KraneShares CSI China Internet ETF (KWEB – $27.49) – Buy under $50 for a double over the next three years
  Acreage Holdings (ACRDF – $1.32) – Buy under $4.49 for the Canopy Growth merger
  Mongolia Growth Group (MNGGF – $1.26) – Buy under $1.25; long-term hold

Energy
  Crude Oil Futures – July 2026 (CLN26.NYM – $53.16) – Buy under $55, $200+ target
  iPath Pure Beta Crude Oil Exchange-Traded Note (OIL – $34.50) – Buy under $24, $80+ target
  Energy Fuels (UUUU – $6.01) – Buy under $11, $30 target

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.
  Algernon Pharmaceuticals (AGNPF – $4.44) – Hold for chronic cough results
  Arch Therapeutics (ARTH – $0.08) – Hold for buyout
  CohBar (CWBR – $0.20) – Hold for human trials of CB5138-3
  Akebia Biotherapeutics (AKBA – $0.35) – Hold for FDA meeting
  Apple Computer (AAPL – $137.35) – Hold for 5G iPhones

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Do you really think we can get $1-2 for ARTH ?

Same question here for MM – I would be thrilled with $1 at this point

And the biotech sector has finally hit bottom and is in an uptrend.

ARTH is going to have to get insurance reimbursement before they get anything. How many people with diabetes and long term wounds can afford an expensive treatment that isn’t guaranteed to work? I would bet a lot of diabetics with longer histories of wounds are probably just glad to be getting rid of the offending appendage. I was under the impression they were moving toward the insurance reimbursement.

Let’s not forget, the KOL method of marketing was not the preferred method, it was what they had to resort to due to a lack of funding.

But hey, those Executive VP of marketing, with no sales force to oversee, are really paying off.

Last edited 1 month ago by Mitchell

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RE: Arth – I would think it would be hard to sign a sales contract with a company that has a “going concern” disclaimer in the financials. I remember when I worked at a S&P 500 Company we had to vet any supplier – I don’t know if Arth would have passed the test.

It is typical for small firms to fly the same plag – the problem is those that really mean it and the others that have been in the situation for so long they really have bit decided things were actually betterr. .

Michael, WHY would 9000 doctors not even try AC5? Any thoughts on that?

IMO, because there is no insurance reimbursements. It’s an out of pocket expense where amputation is covered.

But that’s just my opinion.

Last edited 1 month ago by Mitchell

@Michael Murphy. Another great Radar within a country that is collapsing domestically, IMHO. Sad to see ARTH become a dilution bin for lack of implementation ooomph. I might hold for a dollar and a half. Yes, really sad. Re: NVTA, you are on target with respect to the need for openness of practitioners to trust their bedside instinct but was a bit disappointed you didn’t mention the mental health panel integration announced today as well. Take that and what’s happening with CMPS and the potential of a real toolkit for the whole human being diminishes the issue of exogenous data (nurture) as patterns of behavior take on the certainty illustrated in “Why Zebras Don’t Get Ulcers” by Robert Sapolsky and his recent “Behavior” with his observations on stress and health are really helpful to the grand rounds or clinic visit key to the observant doc. Getting back for a moment on the collapsing domestic USA, I really am concerned about this rush to make inflation nudging long term commitments to the Ukraine without a congressional and citizen discussion of the implications, including a nuclear response from Russia, and as Congress is adopting stupid bills to punish public discussion with which they disagree. Yes, Powell will cave but truck drivers can’t afford $6.00 or more /gallon of diesel and all the fentanyl in the unstoppable rush of hoards. Please excuse the rant. One more thing Re: Moderna vaccines, not only losing protection but lacking proper design that misses the variants and has adverse results in the New England area that had the highest vax rates. ((Source: Substack.com Unreported Truths section by Alex Berenson today with subscription. It’s free) GLTA…

Last edited 1 month ago by Donald Galamaga

Please read my reply to you last PM on the previous page. As oldster3 used to say, NVTA is pure hopium. ARTH is hopium dashed. Both companies are victims of the age-old refusal of the medical community to try new, great ideas. You know the story about acceptance of truth. First, it is vehemently denied, then ridiculed, then a maybe, then a minority embrace it, then the majority joins the bandwagon and shuns the deniers. ARTH failed at the ridicule stage. Perhaps NVTA will make it to the maybe stage. As investors, a company needs to get to the majority stage for us to make money. NVTA is still highly speculative. Curb your enthusiasm, as Larry David said.

@JGMD, Glad you mentioned the post. I missed it completely. Excellent insight into integrative medicine. Yes, we do have a heckuva focus on silos in the health care community (strange that word doesn’t fit). My son the oncologist has his roots in DO starts and appreciates relationships among interventions that are not always pills. In fact, in that business, so to speak, a good amount of your patients needs a smile and a back rub plus a healthy meal and some family understanding support. He does use pharmacogenetic data and has used some NVTA things as a new customer, but still uses Guardant. There is a lot of work to do with pill dependent medical schools and lawyers and regulators, who want to sue within the box and think that resource allocations are governed by accountant software written by Frank or Rosie the rivetter.
Best wishes

Last edited 1 month ago by Donald Galamaga

Question what are the real chances of arth filing for bankruptcy protection before a buyout occurs,truthful

Very important question. TN will go for bankruptcy protection, then sell off the pieces and retain the pieces for himself and his crony funders. We get nothing.

MM?

Here are the pieces. The tangible assets are the cash, inventory of product, furniture in the ARTH office, valued at almost zero. The intangible asset is the intellectual property (IP)–patents, the license from MIT. My question is really a legal one. Do the shareholders own their share of the IP plus the tangible? Or has TN spun off the IP without notice, just for himself and his funders? TN will insist that the IP has value, but JNJ will say it has no value, because it hasn’t produced any significant sales. JNJ, Baxter or anyone else could easily let ARTH go bankrupt, and there is no pressure on them to give ARTH anything more than 7 cents or $20 million for the IP.

MM–please address my thoughts about the pieces and legal question.

Which may be what they are waiting on.

Aside from that, Norchi hasn’t done any fundraising, which is rare for him. He doesn’t hesitate to dilute and does it early, and that makes me think the well is dry.

I hate to sound like some of the crybaby whiners here, but I think we’re going to lose on ARTH.

Last edited 1 month ago by Mitchell

You THINK you are going to lose on ARTH? Dude … come on.

The US is sending BILLIONS of dollars every week to help Ukraine. The Ukrainian resistance comes with many soldiers and civilians needing wound care – like AC5 – duhhh. But yet we can’t send AC5 to help and show how effective it may be. This is too simple a problem to solve which means AC5 probably doesn’t work. MM and the AC5 team should have been making calls and going into insurance and government offices all along. But all we are left with is yet another MM BIOTECH LOSER. MM – may be time to hang up the cleats on biotech stocks – your performance is miserable and you are costing us a lot of money…..

TO: M. MURPHY
You need to adjust the numbers under $20-for-$1 for ARTH?

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.

$20-for-$1
  Aptose Biosciences (APTO – $1.05) – Buy under $4, ultimate target $45
  Arch Therapeutics (ARTH – $0.08) – Buy under $0.70, first target $2, then $7

Well stubborn Mike finally threw in the towel on ARTH at eight cents. At least it’s not zero.

Done alias on the yahoo message board has been warning people for ever about arth being a total loser,guess I should have listened to him,guess I was hoping MM knew more about arth then he did oh well been taught another lesson about shooting for the moon,have a great day

MM–thanks for getting real about ARTH. But what makes you think that a JNJ or Baxter will buy it for $1? In the past, you said the intellectual property is worth that. However, if no would-be amputee is willing to try AC5 and would rather get an amputation, the intellectual property is worthless. I would be happy to be wrong, if the acquirer uses its marketing prowess and is able to convince doctors and patients to demand AC5. Still, an acquirer had plenty of time to propose a $1 buyout, yet TN rejected it. Will TN take it now?

Now that you have gotten real about ARTH’s failure, what is your realistic assessment of the chance of a buyer at $1? Or has TN pulled a dirty trick and sequestered or spun off the intellectual property for himself and his funder cronies, leaving shareholders with nothing? If so, shareholder class action lawsuits would drag on for years, and we would get basically nothing.

ARTH- Yes, finally MM has moved it to a HOLD. However, the change of opinion is 2 to 3 years late and unfortunately MM continues to be unjustifiably optimistic about it when he now declares that “it may be sold for $1 or $2”. The brutal reality is that NOBODY is interested in ARTH. Period.

You’re probably correct–nobody is interested in ARTH. However, is there a ray of hope, or at least reason to be ambivalent in my posts of 9:36 and 9:44 AM?

ARTH- We obviously do not know if over the last 3 years TN received an offer around $1, in those days perhaps equivalent to $150 to 200MM depending on dilution. If those offers materialized, which is unlikely, they were duly rejected by our hero who, of course, was dreaming of $billions. Today, $1/share is equivalent to $300MM+. MM may be correct that the IP has value, but $300MM seems improbable.

Something will happen with arth over the weekend either an offering at 5 cents or bk,the picks on this newsletter have detrimental to overall health if nvta dosen’t rebound like MM forecast it should be shut down,sad no more investing here have a great day

ARTH- A Biopharma/Medtech Bear Market since February 2021 + a general market Bear since January 2022 + TN imbecility, and voila’ $.065 Bid.

ARTH – I’m not sure I’ve ever seen a stock trading at 6 cents get a takeover bid for $1.00 or $2.00. Any examples of that happening? if J&J offered 20 cents I think most of us would be thrilled.

How could TN or any of his funders not take even 10 cents? Is TN backed into a corner with no other alternatives? Who would fund this at even 5 cents when they are in a death spiral with no prospects?

Decades ago there was a company in the Philadelphia area which went bankrupt. When the corpus was auctioned, guess who was the winning bidder. That one staggered on for a while. MM and I were not winners. If my memory was good, I think I got the better end as they served excellent Philadelphia Hoagies at the last meeting of shareholders previous to that.

Oh, that was you? Was that ILE?

My records of then are lost, but I think the firm had ownership if a British alternative to Botox, plus a moderately profitable small British cosmetic firm .
They staggered along for some years while I lost track of the mess. I wrote it off as an inexpensive tutorial on management greed.
My best example was the merger of 4 Canadian rail/transportation firms. Every VP stayed on at the old wages, so they had four of everything.
The annual report was a work of visual art and how much the 4x board lived richly thereafter.

The reality is that the biotech sector has been on a downtrend/bear market that started well over a year ago. In that regard, the slide we are seeing on the speculative biotech companies for NWI is not a total surprise. To that end, how about buying a triple leveraged ETF, such as LABU, now trading below $6 down from an all-time high north of $150? The index is composed of over 150 biotechs, many of them very small, including NVTA, INO, and GRPH. Just a thought. Comments?

I picked up a little bit more LABU for a bounce. Tiny amount .. we’ll see.

Options traders here time their trades to less than the time the original Robinhood could keep an arrow in the air. Today that’s similar to useful life of a tea bag by the snap options trader of the same name.

MM – have you ever considered the 3X biotech bull etf LABU?

I may be wrong again, but the Bloomberg Asia markets tonight looks like the beginning of a movement to stability., The dollar is mixed, but down in three areas, up 2. Commodities looking stronger for gold and silver.
GLTA on Monday

The price of gold in 1970 was $38.90 an ounce. And today it is ???$$$. When Nixon took us off the gold standard, gold began its climb to where it is today. And every time since when our fearless leaders in the Oval Office printed money out of thin air, gold went up in value. Central bankers bought 463 TONS of gold in 2021. One well respected “expert “ is calling for gold to go to $5,000.00 an oz. The last few years the US government leaders have been printing money with reckless abandon and spending money like a drunken sailor. Biden’s favorite “go to” move is just throw a check at every problem that pops up.A billion here a billion there, and pretty soon you are talking serious money. We have run up $31 trillion in debt. The Fed is in between a rock and a hard place. Inflation is out of control and the Fed can’t fix it by raising interest rates to much because the payment on the national debt will eat the US alive. How is the value of gold going anywhere but UP??

All presidents in the modern era throw checks at every problem. The biggest culprit is the blank check we throw at the Pentagon every year. You are right about the national debt though .. seems that Bitcoin took away much of Golds thunder as it’s much easier to store and transact.

You are also right about the Fed. As some point they will have to throw their hands up and we will have a ridiculous rally followed by an outright depression.

Followed by no stock market, but a lot of leaders who speak Russian, Chinese or even Korean or home delivery of nukes)

The $38 price was set by US law from the 1930s. Let’s face it, Gold had practical industry applications uses hording and decoration was a driver. Fort Knox was our stabilizer.

But a more interesting measure of value was a bespoken Mens Suit, hand made by London s Best Hand Tailor.
One OZ = 1 Suit
Today, Gold is a little over $1800,
London custom suits are a lot more, Most likely by a world wide customer base instead of just well placed Englishmen.

Today try my little test of value: Consider that you paid of for the first purchase of a item with money your EARNED yourself,
Postage Stamp, Coke, Gallon Gas, Typewriter Ribbon.
my numbers: $03-$05, $05-$07, $0.29, $1.80
(Do not laugh – the last time I looked it was about $7.80 and from the same vendor and the reel was plastic not steel)

If Cathie Wood was successful early on and then lost 85% of your money in a year would you say she is an excellent money manager? Just sayin… And like I said long ago as long as she is in NVTA and VLD you can forget those stocks. And if NVTA were the AMZN of genetic testing would it really be trading at $3 a share???

I told everyone that genetic testing is a small part of medical practice. It is useful to a tiny fraction of MD’s, so it is a misleading statement to say that any genetics testing company is the Amazon. Buffett said it is a better investing strategy to pay a fair price for a great company, than a cheap price for a lousy company. A lousy company is one that claims it is the Amazon of shit. It is worth $3 and plunging for good reason.

To MM we all know this market has been in the shitter,so much for arth I would to you about nvta and if you ever purchased shares of nvta above 11 a share. Seems like Sean waited a quarter to late to fix the debt problems,tx

Sad to think we have to wait until August 1st to see if Sean George at nvta fixed the problem until then the course seems set right into the Bermuda triangle ️

Where is the bottom?? 3400 or 3600 on the S & P . Any comments??

Mm,what was the highest price you ever paid for nvta,tx