When John identifies a strategic exit point, he will send you an alert with specific trade information on 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
(A LOOK AT ISRAEL’S AIR DEFENSE SYSTEM & THE COUNTRY’S TIES WITH BOEING)
October 4, 2024
Hello everyone
Israel’s Iron Dome air defense system is one of several systems the country has developed to protect itself from missiles since the Gulf War in 1991.
It also uses Arrow interceptions, and a system called David’s Sling.
The short-range Iron Dome air defense system was built to intercept the kind of rockets fired by Hamas in Gaza.
It was developed by Rafael Advanced Defense Systems, an Israeli state-owned company, with US backing, and became operational in 2011. Each truck-towed unit fires radar-guided missiles to blow up short-range threats such as rockets, mortars and drones in mid-air.
A naval version of the Iron Dome to protect ships and sea-based assets was deployed in 2017. The system determines whether a rocket is on course to hit a populated area; if not, the rocket is ignored and allowed to land harmlessly.
What is David’s Sling?
David’s Sling system is designed to shot down ballistic missiles fired from 100 to 200km away.
It was developed and manufactured jointly by Rafael Advanced Defense Systems and the US company RTX, formerly known as Raytheon.
The system is also designed to intercept aircraft, drones and cruise missiles.
What is the Arrow system?
The long-range Arrow-2 and Arrow-3 interceptors, developed by Israel with an Iranian missile threat in mind, are designed to engage threats both in and outside the atmosphere.
It operates at an altitude that allows for the safe dispersal of any non-conventional warheads.
State-owned Israel Aerospace Industries is the project’s main contractor, while Boeing is involved in producing the interceptors.
Israel said it had used the system on October 31 last year to intercept a surface-to-surface missile fired from the area of the Red Seas towards its territory.
Boeing and Israel have a long history that goes back more than 75 years – to the founding of the State of Israel. Since then, Boeing has worked closely with Israeli and commercial and military customers and suppliers and has developed many lasting partnerships.
Israel has a large and modern air force and a successful commercial aviation sector. The Israeli aerospace industry in the public and private sectors provides a high level of innovation and expertise in the design and manufacture of a wide variety of defence, space and communication products. Its position as a world aerospace leader makes Israel an important market and partner to Boeing.
El Al = Israel’s flagship airline.
QI CORNER
SOMETHING TO THINK ABOUT
Cheers
Jacquie
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
Come join me in the grand appointments of the Cunard Line’s luxurious flagship Queen Mary 2 on an adventurous seven-day cruise across the Atlantic Ocean.
The ship departs from the Brooklyn Cruise Terminal at 10:00 AM on Tuesday, July 8, 2025 and arrives in jolly old Southampton, England on the morning of Tuesday, July 15. On day three, the ship will pass over the wreck of the Titanic.
There, I will be conducting the Mad Hedge Fund Trader’s Strategy Luncheon where I will discuss the future of the global financial markets.
I’ll be giving you my up-to-date view on stocks, bonds, currencies, commodities, precious metals, energy, and real estate. I’ll highlight the best long and short opportunities. And to keep you in suspense, I’ll be tossing a few surprises out there too.
Tickets are available for $499 for the seminar only.
Attendees will be responsible for booking their own cabin through Cunard. They offer everything from an inside stateroom from $899 per person to $26,780 for Q1 deluxe two-bedroom apartment with its own gym and two butlers. Please note that Cunard offers its biggest discounts of the year on November 29 Black Friday.
Just visit their website by clicking here, or call them directly at 800-528-6273 to make your own arrangements. Only reserve cruise number M519.
The weather this time of year is usually balmy with the Atlantic as smooth a Mill pond, depending on our luck. A brisk walk three times around the boat deck adds up to a mile where I often see spouting whales and frolicking dolphins. Space X Starlink Full Internet access will be available, for a hefty price, to follow the markets. It’s unlikely we will see another ship during the entire seven days at sea.
Two dinners during the voyage will be black tie, so bring two tuxes or formal dresses. Don’t forget to bring your Dramamine and sea legs, although the 21-year-old, 148,528 tonne, 1,132-foot-long, 131-foot wide ship is so big I doubt you’ll feel the roll of the sea. The ship cost $800 million to build in 2003 and carries 3,000 passengers and 1,000 crew.
The event will be held at the ship’s luxurious Owners Suite, the details of which will be emailed to you with your purchase confirmation.
I look forward to meeting you and thank you for supporting my research.
To purchase tickets for the seminar alone, please click here.
See You Onboard
The English are feeling the pinch in relation to recent geopolitical events and have therefore raised their security level from "Miffed" to "Peeved."
Soon, though, security levels may be raised yet again to "Irritated" or even "A Bit Cross." The English have not been "A Bit Cross" since the blitz in 1940 when tea supplies nearly ran out.
Terrorists have been re-categorized from "Tiresome" to "A Bloody Nuisance." The last time the British issued a "Bloody Nuisance" warning level was in 1588 when threatened by the Spanish Armada.
The Scots have raised their threat level from "Pissed Off" to "Let's get the
Bastards." They don't have any other levels. This is the reason they have been used on the front line of the British army for the last 300 years.
The French government announced yesterday that it has raised its terror alert
level from "Run" to "Hide." The only two higher levels in France are "Collaborate" and "Surrender." The rise was precipitated by a recent fire that destroyed France's white flag factory, effectively paralyzing the country's military capability.
Italy has increased the alert level from "Shout Loudly and Excitedly" to
"Elaborate Military Posturing." Two more levels remain: "Ineffective Combat Operations" and "Change Sides."
The Germans have increased their alert state from "Disdainful Arrogance" to
"Dress in Uniform and Sing Marching Songs." They also have two higher levels: "Invade a Neighbor" and "Lose."
Belgians, on the other hand, are all on holiday as usual; the only threat they
are worried about is NATO pulling out of Brussels.
The Spanish are all excited to see their new submarines ready to deploy. These beautifully designed subs have glass bottoms, so the new Spanish navy can get a really good look at the old Spanish navy.
Australia, meanwhile, has raised its security level from "No worries" to
"She'll be alright, Mate." Two more escalation levels remain: "Crikey! I think we'll need to cancel the Barbie this weekend!" and "The Barbie is canceled." So far, no situation has ever warranted the use of the final escalation level.
-- John Cleese - British writer, actor, and tall person.
2015 in Marrakesh, Morocco
“Bonds are priced artificially because you’ve got some guy buying tens of billions of dollars’ worth a month. That will change at some point, and when it does, people are going to lose a lot of money,” said the Oracle of Omaha, Warren Buffett.
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 and Healthcare Letter
October 3, 2024
Fiat Lux
Featured Trade:
(TESTING, TESTING… CAN THIS BIOTECH SURVIVE THE POST-PANDEMIC DROP?)
(FLGT)
If you blinked, you might have missed the meteoric rise of Fulgent Genetics (FLGT) during the pandemic.
What started as a small player in genetic testing suddenly became a heavyweight in COVID-19 diagnostics, raking in nearly a billion dollars in revenue.
But with the pandemic in the rearview mirror, investors are wondering if Fulgent is just another one-hit wonder—or if it has a real shot at a biotech encore.
Fulgent started life in 2011 as a tech-savvy genetic testing outfit. They'd take your DNA, run it through their whiz-bang machines, and spit out a report for your doctor.
Not a bad gig in a market that's set to grow at 22% annually for the next decade.
But then 2020 rolled around, and boy did the plot thicken. COVID-19 hit, and Fulgent went from 59,000 billable tests in 2019 to a mind-boggling 10 million in 2021.
Talk about being in the right place at the right time.
Their COVID performance sent Fulgent's revenue into the stratosphere, rocketing from $32.5 million in 2019 to $992.6 million in 2021.
But as we all know, what goes up must come down, and by 2023, revenue had fallen back to $289.2 million as the COVID testing frenzy fizzled out.
So, where did Fulgent go from here? That’s the billion-dollar question—literally.
With COVID-19 testing revenues all but evaporated (just $841,000 in Q2 2024, or 1% of total revenue), Fulgent is back to focusing on its core genetic testing business and mapping out new territory.
Fortunately, the company didn’t just sit on its COVID cash pile. Instead, it made several strategic acquisitions to shore up its position in the broader healthcare space.
In 2021, Fulgent bought Cytometry Specialists Inc. (CSI), a move that expanded its presence in molecular diagnostics and cancer testing.
Then, in 2022, Fulgent went on a shopping spree, picking up Inform Diagnostics—a major pathology lab—and Fulgent Pharma, which marked its entry into the therapeutic development game.
These moves signal a clear intent: Fulgent wants to transition from being a niche diagnostics firm to a full-fledged healthcare solutions provider.
And here’s where it gets more interesting. Fulgent Pharma brought along a pipeline of drug candidates, including FID-007, a novel treatment for head and neck cancer that uses advanced nano-drug delivery technology.
While this segment currently contributes zero to the top line, the upside potential is massive if any of these candidates clear FDA hurdles.
Next, let’s take a look at the numbers.
Pre-COVID, Fulgent was growing at a respectable 21% clip from 2016 to 2019, but profitability was as elusive as a straight answer from the Fed. The pandemic changed all that, flooding the company with more cash than a Vegas high roller.
Still, even as COVID revenues dried up, Fulgent's core business kept growing. Their non-COVID revenues have jumped from $32.5 million pre-pandemic to $262 million in 2023.
That's an 8-fold increase, folks. Not too shabby for a Plan B.
As of Q2 2024, Fulgent's sitting on an $838 million cash pile, with zero debt. That's a lot of dry powder for a company valued at around $700 million.
Now, valuing Fulgent is trickier than nailing jello to a wall. Its specialized industry and lack of sustained profitability in its core business make traditional metrics about as useful as a screen door on a submarine.
But if we include long-term marketable securities in our net current asset value (NCAV) calculation, we get a per-share value of $25.40.
With the stock trading at $22.70, that's a price-to-NCAV ratio of 0.89x. Historically, Fulgent has traded at much higher multiples. Smells like opportunity to me.
And remember, this valuation gives zero credit to Fulgent's operating business. If they can hit their target of 40% gross margins by year-end 2024, we could be looking at a serious re-rating of this stock.
Of course, no investment is without risk, and Fulgent's got its share.
The main worry is cash burn, especially as they venture into the cash-hungry world of drug development. For 2024, they're expecting to burn $15-17 million on therapeutics development. That's manageable for now, but it's something to keep an eye on.
There's also the risk of bad acquisitions. Fulgent's been on a buying spree, and while it's paid off so far, one bad deal could spoil the broth.
Lastly, there's the Ming Hsieh factor. The CEO owns 29% of the company, giving him more control than a puppet master. His vision sounds promising, but it's speculative and may not always align with shareholder interests.
So, what’s the bottom line here?
Fulgent Genetics is like a biotech chameleon, constantly adapting to its environment. It rode the COVID wave to financial success and is now trying to parlay that into a long-term winning strategy. I suggest you buy the dip.
Global Market Comments
October 3, 2024
Fiat Lux
Featured Trade:
(THE MAD HEDGE SEPTEMBER 17-19 SUMMIT REPLAYS ARE UP),
(HOW TO EXECUTE A MAD HEDGE TRADE ALERT)
