Global Market Comments
July 24, 2020
Fiat Lux
Featured Trade:
(TAKING OFF FOR VACATION),
(TESTIMONIAL)
With any luck, by the time you read this, I will be setting up my tent next to a High Sierra lake somewhere over 9,000 feet.
For I will be leading 40 Boy Scouts on a 50-mile hike around the Desolation Wilderness next to Lake Tahoe. The vertical climb for this ambitious route is 6,300 feet, which we will cover in seven days. Bears are everywhere, so we will be hanging our food from trees at night.
Usually, I am hanging out at my chalet in Zermatt, Switzerland this time of year, watching climbers descend from the Matterhorn. However, because of our poor response to the Coronavirus, Americans are banned from Europe for the foreseeable future. We are just too dangerous to let in.
My pack weighs in at a featherlike 50 pounds, including five pounds of medical supplies and a fifth of Jack Daniels, for medicinal purposes only. Gentleman Jack is excellent for sterilizing animal bites, large cuts, and gunshot wounds, and has saved my life many times.
With 40 kids under my control ranging in age from 11-17, what could possibly go wrong? At least they don’t have rattlesnakes and poison oak in the High Sierras.
The hike should take no more than 40 hours, which will give me plenty of time to think of great trades for the second half. Hopefully, I will come back refreshed, invigorated, and 20 pounds lighter.
I deserve the time off.
I have worked the hardest of my career over the last six months, going battle with the pandemic and the worst market crash in history. I knocked out 164 trade alerts, triple the normal rate. As a result, I have pulled in a stunning 28.83% profit so far in 2020, and 68.19% over the past 12 months. I know that many of you have made much more. These are the best numbers I have pulled in during 50 years of trading.
While I am communing with nature over the next two weeks, I will be sending you in daily installments FOR FREE the print edition of my best-selling book, “Options Trading for Beginners.” If you are one of the many recent new subscribers, this will give you the tools with which you can max out your profits in the coming months.
Thank you for supporting my research. Once back, I will do whatever I can to maintain your trust and continue to bring in some blockbuster numbers.
I want to take this opportunity to share an experience that has been immensely valuable to me and could be to you as well...
Over the holidays last December, a long-time buddy of mine and I were golfing Quail Creek in Green Valley, AZ. As a career money manager, he mentioned the name of John Thomas, the Mad Hedge Fund Trader. It didn’t take him long to convince me to buy Tesla in late December, based on John’s recommendation in his email, “Diary of a Mad Hedge Fund Trader” After all, Mr. Thomas had been driving the cars for 11 years and had visited the Fremont factory countless times. Soon thereafter, anyone who follows Tesla (TSLA) stock knows what happened then.
Then, in late January, John drew upon his experience as a biochemist to identify the companies that would benefit from the Covid-19 pandemic. His statement that “Biotech is today what tech was in 1990” has been a rocket so far as well.
Then, when the market crashed in March, John urged the lead chip stocks, NVIDIA, Advanced Micro Devices, and Micron Technology, which he had been following for decades. Those stocks all doubled. I also increased my position in Tesla some more.
Some six months after hearing about John Thomas, I couldn’t be more grateful. It has given me the financial security to get my family and our three kids through this pandemic while supporting the gallery as well. It has also set me up in a position I never expected through these tough times.
John has been an incredible asset to my family, I believe he could be for yours as well. I am so grateful for his guidance in this stage of my life! I personally subscribed to his biotech newsletter and trade alerts after attending his free seminars and seeing the results. I missed the tech boom of the ’90s. If biotech is the new tech, I don’t want to miss that one too! And I wouldn’t chance it without John’s guidance.
All our best to you all in these difficult times.
Sincerely,
Greg
Las Vegas
When John identifies a strategic exit point, he will send you an alert with specific trade information as to what security to sell, when to sell it, and at what price. Most often, it will be to TAKE PROFITS, but, on rare occasions, it will be to exercise a STOP LOSS at a predetermined price to adhere to strict risk management discipline. Read more
Mad Hedge Biotech & Healthcare Letter
July 23, 2020
Fiat Lux
Featured Trade:
(WHY IT'S OFF TO THE RACES FOR BRISTOL MYERS),
(BMY), (PFE), (GILD), (REGN)
For investors, compounding has long been considered the eighth wonder of the world.
Compounding refers to growing your initial capital over time, boosted by well-timed additions to increase your pool of funds. Warren Buffet calls it “snowballing.”
For compounding to work out, though, it’s important to have a long-term investment plan.
Naturally, the first step to successfully invest is choosing the most suitable stock for your portfolio. Ideally, these businesses should have growth runways set up to thrive in the long run and coupled with clear-cut competitive advantages.
These companies should be able to pay out decent dividends as well since these can later be reinvested to accelerate returns.
Among the companies in the biotechnology and healthcare sector today, Bristol-Myers Squibb (BMY) fits the bill.
The company’s strengths lie in its oncology and hematology departments, with sales for its pipeline of drug candidates estimated to beat expectations.
With the new drugs in late-stage trials, BMY raised its annual sales forecast to reach somewhere between $15 billion and $20 billion. This number is expected to be sustained over the next 10 years.
Many of BMY’s promising programs came from its Celgene acquisition in November 2019.
While the whopping $74 billion deal faced pushback at first, the merger is expected to yield $2.5 billion in savings for BMY. This offers the company more elbow room to invest in its R&D sector.
BMY is working on combining its cancer drugs Opdivo and Yervoy with Celgene’s top moneymakers Revlimid and Pomalys, effectively transforming the New York-based company into the largest seller of cancer treatments in the world.
Outside its immuno-oncology lineup, BMY is also performing quite well in the cardiovascular field.
Its blockbuster drug Eliquis, which is a collaborative effort with Pfizer (PFE), remains one of the highest-selling treatments among atrial fibrillation patients.
In 2019 alone, Eliquis raked in $7.71 billion in sales. As for its performance this year, this heart disease drug is estimated to add another $1 billion, pushing its 2020 annual sales to $8.79 billion.
So far, 8 of BMY’s drugs available in the market generate over $1 billion in yearly sales. The company also has 9 new products undergoing Phase 3 trials, with more than 20 drugs slated for review in the next 10 years.
For 2020, BMY is projected to earn $41.8 billion in revenue and roughly $6.20 per share compared to $4.69 last year.
BMY is also anticipated to generate over $14 billion in free cash this year. Thanks to its Celgene acquisition, the company’s revenue will experience a one-time jump of about 60%.
For 2021, BMY is expected to report a 7.5% revenue growth to reach $45 billion or $7.33 per share. This is just a conservative estimate though.
BMY is an attractive stock right now.
It’s currently trading at roughly $60. The company has about $136 billion in market capitalization and pays an annual dividend of $1.80 for a yield of 3%.
In the past 5 years, except for a single quarter in 2017, BMY reported positive quarterly earnings growth.
The shares trade for 8.6 times its expected earnings in the next 12 months, which is just ridiculous for a premium stock.
In terms of its long-term earnings per share, the company is expected to report a 9.3% growth rate.
Finding value among the biotechnology and healthcare sector has become increasingly tricky.
Since the pandemic broke, industry stalwarts like Gilead Sciences (GILD) and Regeneron Pharmaceuticals (REGN) have been receiving constant media attention for their COVID-19 vaccines and treatments. This pushed their valuations to skyrocket.
However, there remain a number of reasonably affordable biotechnology growth stocks.
While these are not making headlines in the fight against COVID-19, these companies offer attractively high long-term earnings-per-share growth rates – and BMY is one of them.
While the Diary of a Mad Hedge Fund Trader focuses on investment over a one week to a six-month time frame, Mad Day Trader, provided by Bill Davis, will exploit money-making opportunities over a brief ten minute to three-day window. It is ideally suited for day traders, but can also be used by long-term investors to improve market timing for entry and exit points. Read more
Global Market Comments
July 23, 2020
Fiat Lux
Featured Trade:
(THE BEST COLLEGE GRADUATION GIFT EVER),
(TESTIMONIAL)
Mad Hedge Technology Letter
July 22, 2020
Fiat Lux
Featured Trade:
(THE FUTURE IS HERE)
(USHIO)
Transistor capacity has always put the kibosh on semiconductor chip performance.
Chipmakers have for decades drained investment into a revolutionary Japanese technique to stretch the limits of physics and cram more transistors onto pieces of silicon.
A secretive Japanese company that mastered the skill of manipulating light for applications is about to go mainstream with cutting edge technology.
Ushio Inc. achieved the once thought impossible task of refining powerful, ultra-precise lights needed to test chip designs based on extreme ultraviolet lithography (EUV), a process through which the next generation of semiconductors will be made.
The milestone means that the Japanese company will become a prominent player in future chipmaking and the technology that harnesses it.
“The infrastructure is now mostly ready,” said CEO Koji Naito in an interview.
Testing equipment was primarily holding back extreme ultraviolet lithography (EUV), but with that hold-up dealt with, production efficiency and yields can finally go up setting the stage for electronic manufacturers with the possibilities of producing substantially better consumer products.
The Tokyo-based company developed a light source for equipment used to test what are known as masks: glass squares slightly bigger than a CD case that act as a stencil for chip designs. These templates must be picture-perfect, even an iota of error in one of them can render every chip in a large batch unfit.
That’s where Ushio seamlessly slots in.
Its technology operates lasers to vaporize liquid tin into plasma and produce light closer in wavelength to X-rays than the spectrum visible to the human eye.
That light aids chipmakers in detecting errors in the product.
This process takes a room-sized machine that looks like a sci-fi death ray and requires a phalanx of workers to operate.
After 15 years of industrious development, the EUV business will generate profits next year.
Only Intel Corp. (INTC), Samsung Electronics Co., and Taiwan Semiconductor Manufacturing Co. (TSM) desire to go smaller than the 7-nanometer processes that are the current status quo of central processing unit (CPU) design.
The focus on niche areas and creating things that others can’t is set to pay dividends for Ushio.
Ushio is poised to seize control of the market for light sources used in the testing of patterned EUV masks, there are several boutique tech companies in the Tokyo area that are incessantly focused on high-precision manufacturing.
Ushio dominates lithography lamps used to make liquid crystal displays with 80% market share and controls 95% of the supply of excimer lamps used in silicon wafer cleaning.
Their secret sauce is balancing mass production with craftsmanship.
Materials like quartz glass are arduous to work with and possess peculiar thermal expansion properties from metals like the molybdenum in which they are housed.
I know this stuff seems like out of the realm of science fiction, but Japanese-specialized firms have always been at the vanguard of the semiconductor technology and that is still the same today.
Ushio was established in 1964, and it was the first Japanese company to develop and produce halogen lamps.
Starting from 1973, fishermen used its lights to catch squid in Tokyo Bay.
The firm has succeeded in more than tripling its sales over the past 25 years.
The company is now venturing into the use of sodium lamps to nurture plants and using ultraviolet light calibrated to such a precise wavelength to kill bacteria without damaging human skin.
