“It’s money 2.0, a huge, huge, huge deal.” – Said Canadian Venture Capitalist Chamath Palihapitiya
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
Global Market Comments
October 28, 2021
Fiat Lux
Featured Trade:
(WHAT THE HECK IS ESG INVESTING?),
(TSLA), (MO)
Mad Hedge Technology Letter
October 27, 2021
Fiat Lux
Featured Trade:
(WHY I SUCCESSFULLY PREDICTED STELLAR ALPHABET EARNINGS)
(GOOGL)
Alphabet is a company whose tentacles effectively reach into every pocket of human life and commerce, and businesses of all kinds are increasingly adopting tools like AI-driven automation and insights to connect with customers no matter what stage of the recovery they're in.
Take 150-year-old Dutch luxury retailer, de Bijenkorf, that turned to Google Clouds’ local insights and automation to speed up cross-border expansion beyond the Netherlands and Belgium to Germany, France, and Austria.
With a multipronged approach, including shopping campaigns, de Bijenkorf drove substantial growth throughout the pandemic.
This is just one example of thousands that crystallize the impact Alphabet and its array of services can provide companies.
Returning visitors to online stores were up fourfold in the first half of 2021 versus 2020, and retail had another stellar quarter.
This is just one little snippet into how Alphabet does $65.1 billion of revenue per quarter, which is up 41% year over year.
I cannot sit here and describe every use case, but broadly speaking, Alphabet has been the beneficiary of explosive growth in digital over the last 20-some months.
As the world begins to reopen, shoppers are returning to stores.
Brick-and-mortar isn't dead. Instead, omnichannel is in full force.
Searches for open now near me are up 4 times globally versus last year.
Strong growth in local shopping queries means people are researching their visits to stores more often before they go. As a result, Google has seen more advertisers include in-store sales alongside e-commerce goals to drive omnichannel growth.
Adoption has nearly doubled over the past year.
Of course, these insights are all possible with a robust search system that almost all of us use — Google Search.
The company also experienced continued momentum in the Google Cloud with Q3 revenue growing 45% year-over-year to $5 billion last quarter.
At Cloud Next two weeks ago, Google unveiled hundreds of new capabilities, services, and solutions.
They also announced 20 new and expanded partnerships to support the growth and scale of Google customers around the world.
Google Cloud provides real-time data, analytics and AI is winning customers like Carrefour Belgium, Deutsche Post DHL, and Wendy's, who are unlocking data to deliver unique business outcomes.
More examples are GE Appliances, a Haier company that is integrating Vision AI into their next-generation smart home appliances. And iCare Retail is using recommendations AI to drive a 30% increase in customer click-through rate.
Customers see value in Google’s open scalable infrastructure that enables them to run workloads anywhere, on Google cloud, at the edge, or in their data centers.
Alphabet recently surpassed 50 million music and YouTube premium subscribers, including those on trial period, and YouTube Shorts continues to see higher adoption rates. In the past year, the average number of daily first-time creators more than doubled.
YouTube's reach is increasingly supplanting TV.
Advertisers and brands of all sizes continue to buy YouTube ad inventory at both ends of the funnel to create future demand while they convert existing demand. They're seeing upside.
A few recent launches include easier ways for businesses to show the local services they offer from hair extensions to auto repair across Search and Maps.
Second, local inventory ads that highlight which products are in stock and when to pick them up.
Third, instantly shoppable images with Google Lens and a new visual browsable experience on Google Search.
YouTube will offer shoppable live stream experiments with retailers like Sephora, Target, and Walmart directly from their favorite creators’ videos.
Lastly, what really caught my attention in the Q&A session with management was the plan to equip YouTube in terms of making it work well with VR, AR.
Management outlined that initiative as a major area of investment in terms of how to put the software and hardware together for this platform.
Naturally, my mind spins when I try to add up what type of revenue tailwind this might be, and at the bare minimum, it’s a game-changer.
Alphabet has separated itself from the rest of the pack and is one of the best tech companies today. Investors need to jump at the chance to buy shares if any discounts present themselves.
This revenue story has legs, and anyone would be a fool to write off Alphabet who clearly has a rock-solid plan going forward.
Alphabet should be bought on any dip or just held long term because their cash cow businesses are in-tact, and their strategic plans are as good as any other firm.
“If you are a big company, a big website, and lots of users come to your website, you will have attacks, and you have to deal with that.” – Said Founder and CEO of Baidu Robin Li
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
Global Market Comments
October 27, 2021
Fiat Lux
Featured Trade:
(A NEW THEORY OF TESLA, or WHY I’M RAISING MY TARGET TO $10,000),
(TSLA)
Mad Hedge Biotech and Healthcare Letter
October 26, 2021
Fiat Lux
Featured Trade:
(A BEATEN-DOWN STOCK POISED FOR A BREAKTHROUGH)
(ABBV), (ABT), (REGN), (PFE)
The market's volatility has made it difficult to find high-quality stocks at reasonable prices as of late.
Despite challenges, the key to investing is never to stray from quality.
In the words of no less than Warren Buffett, “It is better to buy a wonderful company at a fair price than a fair company at a wonderful price.”
This reminds me of one of the stocks I constantly add on pullbacks: AbbVie (ABBV).
AbbVie, which is a spinoff company from Abbott Laboratories (ABT), started trading in 2013. Since then, its name has been synonymous with its rheumatoid arthritis drug Humira—the No. 1 selling drug globally in the past years.
While AbbVie understandably relied heavily on this product for years, with 65% of its revenue coming from Humira sales in 2018, the company has already aggressively implemented ways to diversify its portfolio to prepare for the impending patent loss.
Among its efforts, one of the most exciting ones is its work with biotechnology company Regenxbio (RGNX).
AbbVie and Regenxbio have been collaborating to develop gene therapies that can treat rare eye disorders.
Basically, gene therapy is a novel approach to deal with diseases by genetically altering a patient's cells instead of the traditional method involving surgery or drugs.
AbbVie’s deal with the smaller company comprises a $370 million upfront payment to Regenxbio, with up to $1.38 billion in developmental and commercial milestones.
So far, the two have come up with RGX-314, a gene therapy candidate in Phase 2 trial for wet age-related macular degeneration (AMD).
This condition includes symptoms like blurred vision and a blind spot.
Patients can also suffer from a complication triggered by diabetes, called diabetic retinopathy, which results in damages to the retina’s blood vessels. Some cases may even lead to blindness.
In terms of the target market, the US alone has recorded over 11 million individuals suffering from some form of AMD, with the number projected to double and reach 22 million by 2050.
There’s also an urgent need for treatments for this condition, as more and more AMD cases lead to blindness annually.
In fact, diabetic retinopathy has been identified as the leading cause of blindness among adults with diabetes and the No. 1 cause of blindness among all adults in the US.
Considering the pervasiveness of diabetes and the continuously rising number of cases of this disease in the US, the number of people affected with diabetic retinopathy is estimated to virtually double from 7.7 million recorded in 2010 to over 14.6 million by 2050.
Assuming that RGX-314 gains FDA approval, AbbVie and its partner can target a market that can generate sales reaching $8.7 billion by 2025 due to the aging global population.
Meanwhile, the diabetic retinopathy segment, which has had an annualized growth rate of 6.3% since 2017, can reach up to $10.1 billion by 2025.
Given the massive addressable market, it is no surprise that the AMD segment has also attracted competitors. One of the contenders is Regeneron (REGN) with Eylea.
What makes RGX-314 more attractive, however, is that it’s a one-time treatment.
This is a massive competitive advantage over Eylea, which requires administration every four to eight weeks.
Using a conservative estimate, we can safely assume that AbbVie could take at least 8% of the market share by 2030. This would work out to roughly $2.1 billion in yearly revenue for RGX-314.
This is just one of the candidates that Regenxbio and AbbVie are working on these days, and its potential is enough to move the needle.
Other than that, AbbVie has the product portfolio from its $63 billion acquisition of Allergen, which includes the best-selling Botox.
The company also has its own homegrown drugs, cancer treatment Imbruvica, rheumatoid arthritis drug Rinvoq, and psoriasis medication Skyrizi, which all deliver strong results every quarter.
To date, they have a dividend yield of 4.7%, and the company has boosted its dividend for an impressive 8 consecutive years now.
Recently, AbbVie stock has been clobbered because Rinvoq was included in the list of drugs that the FDA instructed to carry a warning label that announced severe side effects, such as blood clots and even death.
However, AbbVie isn’t too worried about this as the company explained that the FDA based the decision on another company’s product, Pfizer’s (PFE) Xeljanz, which holds a completely different safety profile as Rinvoq.
So, what do all these mean?
This means that investors are handed a rare opportunity to buy into a solid, cash-generating biopharmaceutical titan at a massive discount.
