1/15/17

What is everyone's top stock pick to start off the new year? Explanation preferred if you throw up some no name or controversial stock. Once the year is coming to a close we could look back and see whose pick is doing the best and whose is absolute shit.

As there has been a lot of haters on facebook in some other topics, I'll own that one as my pick.

Comments (120)

1/8/17

That's not really meaningful. I've put out a few ideas on these forums and I'm sure no one did their own due diligence.

1/8/17

I was thinking of this topic as being more of a bit of fun posting which ever company you think will outperform this year. I am sure everyone has a favorite stock or holding which they think is going to do very well in the future.

Though on a more serious note, if someone does present a good idea that I liked I would then do my own due diligence and look into it. I think that sometimes the idea is harder to come up with then determining the actual fundamentals behind it.

1/8/17

I smell someone trying to datamine WSO to make a leading indicator to sell to GS or at least sell them during the interview process!

Sneaky @PatrickStar120 , I see what you did there! Consolidate and make the data parsing easier...

Shameless plug for resume bullet

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1/8/17

Lol I prefer to make money off other peoples ideas instead. Then claim the success as my own :)

1/8/17

$AMZN $BABA

1/8/17

BABAs numbers stretch credulity, I've made it a rule to never touch Chinese paper. It's absurd.

1/9/17

Come on buddy, we're in and out of it for a buck, what's worth doing is worth doing for a buck.

You sound like this dude(Jim Chanos) right now and ya know, I can't fault you! Freaking Asians, tricks are for kids not your CPAs!

1/9/17

It's not an investment I'd feel comfortable with, and it's well outside my normal investment profile.

1/12/17

Like BABA

WSO's COO (Chief Operating Orangutan) | My story | My Linkedin

1/9/17

Amazon has been interesting lately. They have been in the news like everyday due to their personal assistant Alexa thing. Seems like they are doing well marketing that product.

Best Response
1/8/17

I've posted on another thread on here about one stock that I believe is going to have a really great year, Portola Pharmaceuticals. Currently, the stock is trading at a $25.46.

$PTLA is a late stage biopharmaceutical company that is in the process of developing two different anticoagulant drugs, Betrixaban and Andexanet. They also have another drug for cancer but I won't be touching on it.

Betrixaban is slated to have their PDUFA (pretty much the final approval) date with the FDA on June 24th and is the biggest catalyst of the year for the company and has been on the Fast Track approval list for some time. It is also under final review by European Medicines Agency.

The drug is an orally-given anti-coagulant meant for people on blood thinners that have a stroke, heart attack, serious illness, or infection that need to undergo treatment immediately that otherwise could not due to the fact that they are on some type of blood thinners. What's so amazing about this drug is that it is the only drug in the world (other than PTLAs sister drug, Andexanet) that reverses the effects of blood thinners and it does it in 2-5 minutes meaning countless lives will be saved in the hospital.

Andexanet does the same but for a different series of blood thinners. PTLA just received an unsecured $50million loan from Pfizer and Bristol-Myer Squibb to continue to fund the development of Andexanet that is to be repaid through royalties from the sale of the drug.

A huge unsecured loan from two of the biggest pharmaceutical manufacturers shows that they not only have faith in the management team but in probability of Andexxanet being approved.

Blood thinners like Warfarin, Xarelto and Eloquis are the #3 drug class admission to hospitals due to adverse effects and the PTLA says the market for Andexanet and Betrixaban could be greater than 500,000 in the first year. In addition to its approval, more patients would be prescribed these blood thinners because there would now be a reliable way to stop patients from bleeding out.

The current market for blood thinners is $24 billion and these drugs will easily expand this market giving PTLA potential to do billions of dollars in business a year.

Morgan Stanley says they see widespread acceptance of Andexanet and Betrixaban and offers a price guidance of $29.

Citi Group raised their guidance from $38 to $40.

Credit Suisse advises $30.

Goldman Sachs - $30.

Lots of big institutional ownership as well.

I think that these price guidance's are actually a little conservative considering that these were prices were all released before PTLA's most recent NDA guidance from the FDA and the $50million loans against future sales, I think if the drug is approved in June you're going to see this stock double into the ~$50 a share price range.

Of course it's a biotech stock and that doesn't come without risks. Last year FDA approved a record low number of drugs(22) but I the risk/return is just too good to pass up for 2017. I got in at $18.33 a share so I've already seen a great amount of upside but I think we're just getting started. I also planning on purchasing puts as we get closer to June as protection against the odds of it not being approved.

I thnk we're also setting up for a short squeze at the end of January and into February, right now there's a 12% float and 8.4 days to cover. If good news keeps happening you're going to see all the bears start to cover soon and shoot the price up even higher.

Longggggg PTLA

that or $JNUG

1/9/17

I should have asked for this explanation on the earlier topic when you recommended it...

1/9/17

Tomorrow (1/10/2017) might be a big day for PTLA, they're presenting at the JP Morgan Healthcare Conference on the status of Andexanet and Betrixiban so we might see some movement.

They present at 10 est. I'll have to schedule myself for being in a meeting tomorrow at that time.

1/9/17

I picked some up yesterday so hopefully it's a good day.

1/10/17

welcome to the gain train

1/10/17
WannabeBankerr:

welcome to the gain train

No real change today, what do you see as possible downside if things go sour in June?

Learn more about crypto currencies and ask all your questions at www.thecoinboard.com - I check and reply to questions multiple times a day.
1/10/17

No real change, at one point it was down 3 maybe 4% but rallied to be down ~1% at close.

So this stock is making new highs after it's long tumble from the high 50s and right now it may be a little overbought, the stock price lives off of news catalysts as it loses money (like all pre-sales bio techs). I think we're gonna see the price settled down around $25 until the next earnings (2/24) and the analyst day (which is also in late February).

If things go sour in June, it would be pretty bad news for the stock. With a betrixaban denial, PTLA would have to conduct more trials and then resubmit and hope for the best. All of this would take over a year and millions of dollars in funding. The stock would surely make new lows, but that's what puts are for.

If that happens, the only savior would be Andexxa being approved at the end of the year.

Look for big volatility in late February but the price to accumulate through the rest of January.

1/11/17

Thanks for your thoughts. I do not follow individual stocks due to lack of time. I do appreciate your analysis. Why not just buy calls? Wouldn't that be almost the same as buying the stock and buying puts?

Learn more about crypto currencies and ask all your questions at www.thecoinboard.com - I check and reply to questions multiple times a day.
1/11/17

This is now WSO's stock pick of the year, your gonna have half the message board in it lol.

1/12/17

That's great and all, I just hope everyone understands the risk of investing in a biotech stock. I claim no responsibility for people's potential losses.

PTLA has two really solid products that I wholeheartedly believe will be approved, but you never know what can happen, as we saw yesterday with Trump's comments on pharmaceutical prices.

I'm long PTLA, I just don't want a bunch of freshman to lose $500 in their Robinhood account without doing their DD and just relying on the few postings I have made.

1/12/17

Don't worry you don't need a disclaimer, I only threw some fun money in there. Ill be happy regardless of what happens.

2/2/17

What was your entry?

2/2/17

haha I was gonna come back here to say your the man if it went up 5% more. I am up 8.59% thus far, entry at 26.093 according to my transaction history.

2/2/17

Glad it's working out for you at the moment, it's really been on a roll this past week...

Just purchased Feb 17 $30 calls, I'm looking for a big push this or next week.

2/2/17

Yea this has been awesome so far. I also unloaded the short term holding from the post election fall I had in Facebook this morning so I got some spare change to potentially add. Though I lied above, I threw more then just a little fun money into PTLA when I first added so I don't think I will add anymore.

2/15/17

Feb17 $30 calls in the money.

Buying March 17 35 calls.

Before then we have earnings and the EU is supposed to release their decision on the drug, this decision is supposed to be independent of manufacturing issues and solely based on the efficacy of the drug.

2/16/17

Dude your my hero, keep me posted on any other good ideas you got haha.

3/1/17

I just took profits a second time seeing as I'm up a ridiculous 40% in like barely 2 months. How far do you think it will run short term?

3/1/17

Ha... Just logged in to WSO to shoot you a message about this....

Tbh, I have no idea what's going to happen in the future. There's a TON of volatility in this stock at the moment, at open it gapped down to 30.00 a share then mid day it dropped down to 30.00 a share again. I'm still in it for the approval. Wish me luck.

3/1/17

I'm still in too, I only pulled out profits for a second time. Still have decent amount in it which I will probably progressively reduce if it keeps going higher. Can't believe its up 5 more percent since I posted earlier today lol.

3/1/17

I'm up 89%. No complaints from me.

3/16/17

Broke $40.

Slow and steady!

3/16/17

I'm lovin it, any time I need a boost that stock is up. You made me a crap load of money.

3/17/17

You can send me my 2 & 20 whenever

6/25/17

@WannabeBankerr Dude holy fuck its up 46% Friday this was as good a surprise as Nvidia's earnings last year. I'm like about to panic sell to lock in these earnings I am up 115 fucking %.

6/26/17

Congratulations! I'm up almost 200% this year... I bought more this morning, looking for 70+ in the next few months.

7/14/17

More like weeks lol. I'm waiting on an account rollover due to compliance restrictions so I got "locked" into the additional like 20 extra percentage gain since my last post...

7/14/17

That just sucks, sorry you got locked into easy money...

Next week should be big, European decision for Betrixaban is due by Friday. My $55 July 21 calls are sitting pretty.... along with my $35 cost basis

1/9/17

Interested in your thoughts here:

1) Looks like the stock was at $50 at the end of 2015 and then it fell off a cliff. Why did that happen?

2) Considering the stock hasn't done much until the last couple weeks, why is there a Big Short interest? My general rule is don't bet against the shorts, but sometimes it works out.

3) $50M loan from Pfizer and Bristol. Do they do these often? $50M may signal that they think the drugs have a chance of getting approved but neither of those companies would care about losing that small of a sum. Do they do a lot of these small bets each year or something and hope that one or two work out?

"Successful investing is anticipating the anticipation of others". - John Maynard Keynes

1/10/17

1) I think at the time PTLA had a few issues. At the time they were hemorrhaging cash to pay for their clinical trials and reporting pretty weak numbers all around, though this is to be expected with any biotech company that doesn't have any commercially available drugs.

Then betrixaban had initially poor results from its phase 3 trials causing the stock to tumble even more, despite there being a statistical significance in patient outcomes. To add to this the FDA then released a surprise CRL letter asking for more information on their manufacturing process. Apparently, it's pretty difficult to make these two drugs, much more so than the average medicine, and the FDA wants to make sure that the processes are down to a T before the drug is marketed.

I believe that the poor phase 3 trials have already been addressed and the FDA has moved on from that as being an issue.

2) I think there's an inherent risk to any biotech company that's making cutting-edge medicines, most obviously 'will they be approved.'

These shorts arise from the manufacturing issues and general anxiety as to whether or not they will be approved and can they do it in 2017. Their balance sheet looked a little grim before to cash infusion from the $50m loan. Any additional delays from the FDA or additional trials would definitely hurt the stock, trials are by no means cheap or quick to conduct.

3) I'm not sure about how often these 'bets' are made by big pharma but Pfizer and Bristol have been working with PTLA since 2015 on the approval of these drugs in return for royalties and other R&D work.

You are right about $50m being a small sum to those two companies but they have so much more to gain back than just the royalties. The approval of these two drugs would vastly expand the market for blood thinners, many people who need blood thinners aren't candidates because they are already at a higher risk for bleeding out or developing complications, that these two drugs would counteract.

Meaning, if these drugs are approved Pfizer and Bristol could sell vastly more warfarin, eliqouis, pradaxa, xarelto, etc....

Here's a really good article that goes pretty deeply into the odds of approval, much more detailed information of the drugs, and the potential market space that is untapped: http://seekingalpha.com/article/4002813-portola-ph...
Edit: Here's another good article that published this morning http://seekingalpha.com/article/4035376-portola-ph...

1/9/17

Thanks very much for the added detail. Biotechs are not really in my wheelhouse but I find your argument interesting enough for me to see if I can understand it well enough to make a call either way. (Personal rule: never invest in something I can't understand.)

Does the FDA normally issue a statement or anything once a company has satisfactorily (or unsatisfactorily) responded to a CRL letter and the FDA has reviewed their response? I'm unfamiliar with the process so I'm just trying to get a sense of whether or not there is something concrete I can check to see that the FDA is ok with their manufacturing techniques.

"Successful investing is anticipating the anticipation of others". - John Maynard Keynes

1/10/17

So from my understanding, the FDA issues the CRL letter to the company and then it is up to the company to decide whether or not they want to publicize the letter. Obviously one would question a biotechs trials/funding/balance sheet/management/etc if a company isn't willing to be transparent about the status and issues of there pipeline.

And of course there are going to be issues, developing drugs and getting them approved the FDA notoriously difficult. But transparency and being upfront with shareholders, I believe, shows that management has faith in their ability to solve the issues.

I listened in on Portola's presentation at the JP Morgan healthcare conference this morning and management briefly mentioned that they had addressed the manufacturing issues and that it shouldn't be an issue moving forward, not much was said on the topic, maybe a sentence or two.

However, they strongly reiterated several times that they were extremely bullish that betrixiban would be approved in June and said they expect to launch the drug in the US in August pending approval.

They also said they had strong reasons to believe Andexxa would be approved by the end of the year with a possible late 2017 launch as well.

We're a long way out but things are looking strong.

1/11/17

Thanks again. After looking at this some more I'm going to pass on it. I hope it works out well for you though. I just know that I don't have any particular advantage over other people who are more knowledgeable on this and I prefer only investing when I have a reasonable certainty that I will avoid permanent loss of capital. It seems like a mid $30s price (assuming same share count later this year) assumes that both main drugs will get approved and even if they do that's only about 40% upside from here. Downside if one, or both, doesn't get approved is probably more than that.

"Successful investing is anticipating the anticipation of others". - John Maynard Keynes

1/12/17

Chris Varick: [Over the phone] Hi Dr. Jacobs this is Chris marlin over at JT Marlin
Dr. Jacobs: Marlin?
Chris Varick: [Another broker turns on the speaker phone ] Right, his my father, so my associate tells me you're interested in one of our stocks?
Dr. Jacobs: Yes, MSC sounds like it might be interesting
Chris Varick: Might be? "Might be" doesn't sell stock at the rate MSC is going for, we're talking a very high volume here
Dr. Jacobs: Well, I still have to run it by my people
Chris Varick: That's great doc if you want to miss another opportunity and watch your colleagues get rich doing clinical trials that don't buy a share and hang up the phone
Dr. Jacobs: Hold on I didn't say that I just want to talk about this more
Chris Varick: Honestly doc I don't have the time this stock is blowing up right now the whole firm is going nuts, hold on let me open the door to my office
[signals everyone to yell and make noise]
Chris Varick: See that doc? That's my trading floor now I have a million calls to make to a million doctors who are in the no, I can't walk you through this I'm sorry
[waiting and expecting a response]
Dr. Jacobs: Ok, let's do this
Chris Varick: Since you're a new account I can't go any higher than two thousand shares I'm sorry
Dr. Jacobs: Two thousand shares? Are you nuts? That's way beyond what I was thinking, Jesus! I'm curious why can't you sell me any more than that?
Chris Varick: We'd like to establish a relationship with our clients on something small before we get to the more serious trades, let me show you couple percentage points then we can talk about doing future business
Dr. Jacobs: That sounds good, give me the two thousand shares
Chris Varick: Done, I promise we'll swing for fences on the next one, let me put my secretary on and she'll take down your info, do you want that confirmation sent to your office or your mansion? It was a pleasure doing business

WSO's COO (Chief Operating Orangutan) | My story | My Linkedin

1/13/17

I was short $PTLA at ~$45 to ~$19. The stock is a SeekingAlpha darling - I only ever saw rosy opinions about it, but at the end of the day no one could explain anything of merit about the Company and the thesis always came down to a coin flip about drug approval. I still feel that way, but think the risk/reward isn't there anymore to stay short.

1/13/17

No - its a factor Xa inhibitor inhibitor - and the molecule is enormous - they already have 1 CRL for manufacturing. Beyond that the MOA leaves a lot to be desired - the patient is basically coagulated and anticoagulated at the same time - which you generally see associated with CV safety issues (ie every failed hemophilia/factor IX company). A small molecule reversal agent with high affinity for -ban is going to take the crown in anti-coag. and btw boerhinger ingles already tried the biologic route with a dogshit, but approved factor 2a inhibitor reversal agent.

Move like lions do.

1/14/17

how did you come about to find this company?

1/14/17

My parents are pharmacists and they keep up with biotech companies.

1/14/17

Curious to hear your thoughts on GILEAD Pharmaceuticals

1/17/17

sitting on a war chest and cashing HCV checks - R&D a % of sales is pretty high for them, and HCV nearing end of exclusivity period, so I'd expect to see some M&A in the high Ms/low Bs out of them. But, I also would've said the same thing this time last year.

Move like lions do.

1/17/17

They have a mountain of cash. They need to make some damn moves.

1/20/17

Yea - but it'll be interesting to see if there's any movement on cash repatriation efforts and how that affects m&a

Move like lions do.

1/8/17

If I were you guys I would take a hard look at thermal coal companies that operate in the Illinois Basin. FELP and ARLP being two that come to mind.

The industry is going through major consolidation and adaptation of cheaper mining methods. There is so much talk about natural gas use to the constant lobbying, marketing, etc. of natural gas and oil companies. There are still a huge amount of BTUs being consumed and these two players have a lot of room for earnings growth in the coming years.

1/10/17

Currently have a long position in ARLP, have for around 2 years. Would definitely agree with this sentiment Big4Please. It was unreal how sold off coal was at its bottom during 2016.

1/13/17

Without a Clean Power Plan, both of these companies likely double in size (or more).

1/8/17

Msft - up 35% since I bought it late last year
DB- up 61% since I bought it in Oct/Nov last year

only 2 stocks I own in my Roth IRA

1/9/17

How much room do you think financials can run? I actually own some Goldman Sachs, and am hoping the deregulation and rising rates will help continue the awesome rally that's been on going since the election. While they have run pretty far, their valuations are still reasonable for the most part I think.

1/9/17

MLP's are another good bet as they are protected somewhat by regulation from Mutual Fund activist investors. I personally like $CINR. Probably the most boring Company on the planet, but yields a strong dividend and capital gains.

4/14/17

MLP is up 86% since you've suggested it. Great call.

4/24/17

I don't think he meant MLP as the ticker

1/9/17

I heard Blue horseshoe loves Bluestar Airlines...

1/9/17
Ebolamonkey:

I heard Blue horseshoe loves Bluestar Airlines...

...Blue Horseshoe loves Anacott Steel. God dammit, Bud.

1/9/17

I'm just not another broker Mr.Gekko! If you give me another chance I will prove that to you, I will go the extra mile!

Here is a chart from StockTwits favorite Asian. In recent times she's gone classic and simple but in her haydays you need a chart of a chart to read her charts. Ritalin dealer probably cut her off.

Becky Hiu - Gift to the World

1/9/17
1/9/17

I have a crazy idea in my head that shorting $GS would be a good idea. Their stock is up about 35% since Trump won the election and I just do not see how the value of their company could possible have increased that much nearly instantaneously. I feel like it HAS to come back to earth somewhat in the next few months, even if it's just a quick 3 - 12% drop. Anyone have any thoughts on this?

1/9/17

Check out the Nvidia chart. That company has great prospects but that rally was/is crazy.

1/9/17
1/10/17

It's about time someone mentioned the chip space. Been riding this fantastic ride for a while. MU / NVDA / AMD all has been good.

"Straight Cash, homie"-Randy Moss

1/10/17
John Rocker:

It's about time someone mentioned the chip space. Been riding this fantastic ride for a while. MU / NVDA / AMD all has been good.

Hope earnings come out strong, if not they will drop like a rock.

Learn more about crypto currencies and ask all your questions at www.thecoinboard.com - I check and reply to questions multiple times a day.
1/9/17

Here's my personal stock portfolio (my "play" account aka money I can afford to lose) . . . just FYI most of these are very risky so definitely not for everyone. Not going to go into any color on these, but yeah, I felt like sharing.

Cash 2.27%
CLIR 16.59%
CVEO 11.03%
EFOI 6.13%
ENT 9.17%
FNV 9.00%
GOOGL 8.03%
LNG 8.63%
STKL 10.97%
TV 8.16%
VIP 10.01%

"The problem with Socialism is that eventually you run out of other peoples money"

  • Margaret Thatcher
1/9/17

FANG party...

1/9/17

Haha nah man I would never touch NFLX or AMZN just not my style . . . I actually hate GOOGL as a company (to the extent where I use a BlackBerry and goddamn Bing), but I think their AI division (DeepMind) is going to dominate one day and the company's current valuation is reasonable.

"The problem with Socialism is that eventually you run out of other peoples money"

  • Margaret Thatcher
1/9/17

Long WFC / short BAC

1/9/17

Long:

-islamophobia
-hairspray
-walls
-pot
-lumbar lordosis (butt selfies)

Short:

-university of louisville
-mexico
-scientology
-bryce harper
-greece
-solar power

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

1/9/17

I suggest you also open a long position in telephone land lines.

1/9/17

i thought scientology was set to make a big comeback this year... clearly oversold after the hit piece from HBO.

1/10/17

Also short Harper. I pray to god the Yanks don't offer him a $1bn contract next year, but deep down i already know it's going to happen

1/10/17

if papa george was still in charge, they'd do it. methinks their idiotic contract days (on a relative not absolute basis) are behind them. the nats & dodgers are the new yankees

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

1/10/17

I agree but get another subpar season under their belt and ole Hal and Hank might be getting a little itchy on that trigger finger

1/10/17

I can see it now, Joey Bats gets $200mm for 5 years with a no trade clause and then hits .200

"The four most dangerous words in investing are: 'this time it's different.'" - Sir John Templeton

"The investor's chief problem - and even his worst enemy - is likely to be himself." - Benjamin Graham

1/10/17

and i woke up thinking today was going to be stress free...

1/9/17

BHI
RDS.A
NLY
And if you really feel like rolling the bones - NYMT

1/9/17
realjackryan:

BHIRDS.ANLYAnd if you really feel like rolling the bones - NYMT

I already have a bunch of NYMT in my portfolio, love that dividend!

Learn more about crypto currencies and ask all your questions at www.thecoinboard.com - I check and reply to questions multiple times a day.
1/9/17

My two highest conviction ideas are ones I currently cover, so in the interest of job security I'll refrain from posting those.

Outside of that, I do think the set up for gold/silver exposed equities is extremely strong. I am back long the JNUG, which is crazy because I've been stung by this in the past but the siren call was just too strong. Virtually all of Trump's policies should be inflationary. Cutting taxes means more discretionary $$ floating around and an even weaker federal budget situation... inflationary. Huge infrastructure projects... inflationary. Erecting trade barriers that make everything from iPhones to earmuffs more expensive... inflationary. All that plus the fact that the Fed is likely to lean into his fiscal stimulus by tightening monetary policy, which means they will need to let reported inflation numbers slip higher. Note that I am one of the tin hats that thinks reported inflation has pretty much nothing to do with actual underlying inflation, but it does matter for gold prices/dollar strength/sentiment. Yellen will try to crush Trump's recovery by taking rates higher which means we're gonna see the Fed/BLS pumping out 2.5-3.0% reported inflation numbers in no time.

Finally, not sure if anyone has noticed, but there is shit-ton of geopolitical risk out there. Any one of about a dozen things could happen on the geopolitical side which will trigger a flight to safety trade. Oh yeah, China currency controls, India currency controls etc... all this is good for gold.

The JNUG is obviously a super risky product, and not for everyone. For those wanting more plain vanilla, I kinda like Tahoe Resources (TAHO) here, as well as the major miners (GG, NEM AUY). But yeah, JNUG is like crack so be careful.

1/9/17

my experience with JNUG so far has been buy high sell low

1/9/17

Any opinion on FNV?

My friend bought TAHO a while back, thing has been taking a beating lately. Looks interesting where it is now though.

"The problem with Socialism is that eventually you run out of other peoples money"

  • Margaret Thatcher
1/10/17

I am holding gold for many of the reasons you stated above in addition to using it as a hedge that I could roll over into other opportunities if the market did crash. I was using GLD though. Any perspective on using that ETF as opposed to the stocks you mentioned.

1/10/17

I don't know anything about GLD but I do know the basics on JNUG and its inherent risks.

JNUG is a 3x leveraged ETF that tracks the movement of gold, if it reacts properly to the movement of gold prices JNUG's price should reflect that multiplied by 3x which is why it is so risky (decay).

Decay is a relatively easy concept to understand.

Imagine gold is at $100 an ounce and one share of JNUG is $100.

Day 1: The price of gold goes down 10%, thus the price of JNUG would go down 30%.
Gold: $90
JNUG: $70

Day 2: The price of gold goes up 10%, thus the price of JNUG would go up 30%
Gold: $99/ ounce (90 x 1.10)
JNUG: $91 a share (70 x 1.3)

As you can see, gold is only down 1% from its starting price but JNUG is down 9% from its starting price even though it tracks the movement of gold prices.

Sure there are quick gains to be had but it is very risky to hold levered etfs for any extended period of time. I would never hold JNUG or DUST overnight,

1/11/17

Just to clarify - JNUG tracks junior gold miners, not gold...

1/11/17

Thanks.

Like I said, I don't trade JNUG.

1/11/17
Solstice3:

Just to clarify - JNUG tracks junior gold miners, not gold...

Yeah that's part of the beauty (insanity) of this product. Junior gold miners are already very torquey relative to the underlying gold price. So with JNUG being 3x the move in the jr golds, you are actually getting something like a beta of 5x-7x relative to moves in the gold price. That is just so damn sexy!

1/11/17

I just wish miners always tracked the moves in gold but it seems to not always be the case and, as a result, it is easy to lose money on short term products like JNUG.

1/12/17

Interested in hearing your opinion on buying JNUG before Trump takes office. I've been reading into it and I think it might be a good swing trade next week.

Do you think there is potential for people to move to safer assets (i.e. gold) and thus a pop in JNUG price?

1/12/17

Yes, I definitely think there's a pretty wide range of outcomes where we see a flight to safety trade unfold over the next year. The biggest (and scariest) possibility to me is around Trump's relationship and positioning with China. It is funny to me that the media is so hyper-focused on the Russia relationship, when if you look at our most important partner from a trade and finance perspective, it is clearly China. Trump has already made a number of faux pas around the Taiwan stuff, and given his follow up tweets this is increasingly looking intentional. That is the type of shit that will absolutely set China off. And if Trump starts taking a hawkish stance on trade with China (e.g. border adjustability tax which is effectively a tariff), I definitely think we are going to see retaliation. The easiest and most straight forward way for them to retaliate would be to step away from Treasury auctions and start liquidating U.S. credit. This will send shockwaves through the global markets, dollar should be expected to plummet, rates should be expected to move up regardless of Yellen's best efforts, and GOLD should be a big winner.

Now this is just the worst case scenario for the U.S. economy (best case for gold), but gives you a sense of the scope of uncertainty we will be facing in the next few years. Any number of other things could arise that would similarly spark a stampede it gold and other non-sovereign credit safe havens. That plus the general rising tide of inflation, which I think will continue given the tax rate/infrastructure policies, should all be supportive of XAU price.

On a more bottom-up basis, I could also see an increase in M&A activity across the miners. Corp tax reform means all of these streams of cash flow are becoming more valuable, so the major miners should be able to more easily justify taking out some of the juniors to their Board's. That should be positive for junior miners relative to the big cap guys, hence my preference for the JNUG vs. something like the GDX.

Again, as a caveat, this is not my space so I'm not an expert on these names. But I just think the setup is extremely compelling relative to elsewhere in NatRes, and certainly relative to healthcare, tech or even the utilities names.

1/12/17

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1/9/17

My pick for this year is Second Sight Medical Products (EYES.) The fundamentals look solid according to Capital Cube, though they were overvalued slightly--though as of trading right now they fell below the $1.99/share that Capital Cube had valued them at. They had a steep drop from $10/share to $1.82/share over the last 2 or so years, but considering their work is in extremely experimental type stuff I think it fell mostly because of investor excitement that was way out of bounds. Basically the company is centered on creating products to assist people to regain their sight and/or keep their sight. Their first product is an inplant on the retina that works to try and restore some sight to people with Retina Pigmentosa (RP) I won't go into the medical details because this would be too long of a post--but you can find out more by going to their site which is 2-sight dot com. (post controls won't allow me to post any links)

Again, the main reason its so low right now is because people tend to get over excited, expect miracles and when miracles don't happen then the price drops like crazy--this product has already been developed, is in version 2.0 and is approved by the FDA. I'm not sure if its publically available for purchase but I do know it has interested at least one major player--the Bascom Palmer Eye Institute in Miami is running a long-term study--and that's a big name in terms of Optamology, so at its conclusion that could give the company some more credibility. This could be a long term investment--don't expect it to rise much this year unless something big happens in that particular study, or someone else gets involved, but if you're interested in a long-term play this is definitely a good choice, and based on the fact they only have 1 product, they could be well placed for a merger with one of the bigger drug companies--particularly the biomedical ones that have been picking up steam these last few years.

1/9/17

Highly unlikely to do extremely well over 2017, but long term I like DIS and ADNT right now.

DIS - reasonable 18x P/E. Decent FCF yield. Phenomenal franchises. I have a feeling ESPN concerns are overblown.

ADNT - recent spinoff. Like most auto-related stocks, it's cheap on an earnings basis. However, even if revenue goes nowhere or declines slightly, they have a lot of room to improve margins. ADNT primarily does seating, and I think driverless cars will help them - increased focus on quality and comfort of seats when people are sitting back and relaxing as their cars drive them places. #1 player in their space. Chinese JVs performing really well (unconsolidated), arguably value could be unlocked here.

I don't currently own the following, but think GOOGL and V will do well long term. I think some retail stocks will bounce back, but I just don't know which. Probably a lot of money to be made on a few mall stocks if you can pick which ones will survive. L Brands and Estee Lauder are two near 52 week lows.

1/9/17

NAME, LMOS, KODK, BNED, BEBE, and SNOW. Enjoy.

7/13/17

5/6 of these went up, those sound like I would have enjoyed it, how did you even find these companies, whats the secret

1/11/17

Anyone still tracking 3D Systems? $DDD

1/11/17

Criteo (CRTO) and GDX (Gold Miner ETF)

I am pretty much long strong ad tech companies. RUBI seems like a risky value play at the moment. I have gotten hammered on that. My CRTO position is up a good 20% since I purchased. Still expect a strong move up for it in 2017.

1/12/17

Always Google

1/12/17

I have been thinking of adding it. Can't get myself to pull the trigger yet though. Maybe i'll add it to my IRA instead of my regular account.

1/12/17

Does anyone have an educated opinion on Square (SQ) here? I see those terminals everywhere now...

1/13/17

I got GWPH at $180+ on Dravets/LGS PDUFA, deep pipeline, even backing out all sativex sales, which have been dogshit. Cash for years - even if they have to run more studies. And btw...theyre an inversion target - how many UK based spec pharmas for $1-5B are even left?

Hold for 2-3 years for sNDA upside for all epilepsy - easily $250+.

Bought under $40 in march and I'm still building the position at $100+.

Move like lions do.

1/14/17

I owned GWPH back in 2014. Great company. I was looking back at it this past summer when a friend of mine told me he bought back into it. If I free up some cash I will take a look back at it.

1/15/17

Uranium. I bought CCJ, the largest producer, but URA is an ETF that is also worth looking at.

Uranium reached highs of $136/lb back in 2007, and has been in a downward trend from $64/lb since the Fukishima disaster in 2011. The up move since the election has been solely due to speculation. Trump's comments on nuclear weapons have gotten the price moving. Also, Kazakhstan is the largest producer of Uranium in the world and announced last week they are decreasing production by about 10%. Additionally, a decent amount of nuclear plants in the world have long-term contracts expiring in the next few years, and speculators are trying to get in now before those contracts bump the price up. I do not know much about the actual science behind it, but there are thoughts out there that nuclear is actually the most efficient form of Clean Energy, it just has that small risk of the reactors exploding and decimating the environment, which has put it very out of favor in the public's eye.

1/17/17

Thanks for the info, I'll have to take a further look at this.

2/19/17

Nuclear power plants are still not "in" and they are in many cases having to beg for subsidies to stay alive now. Lower priced gas has hurt them bad.

1/16/17

Here's some info on Second Sight (EYES) let's see if it'll let me post the link now. https://www.zacks.com/stock/research/EYES/company-...

1/20/17

Go long on Tech Stocks. Short Retail.

1/21/17

My entire portfolio is in MX because of AMOLED growth, declining opex/wafer capacity, everyone hates companies that undergo financial restatements (although now their revenue recognition policy recognizes the deferment of sales made to questionable distributors), working capital anomalies due to its shareholder lawsuit mask operating cash flow recovery, and estimated forward EBITDA multiples that are well below peers'.

The bonds have already recovered from ~60% to ~90%, and I think the equity still has room to move given its sizable discount to peers and acquisition multiples.

The stock has already moved up 30% from my cost basis on the heels of convertible debt offering with a conversion price of $8.26, which is a pretty good premium from current levels.

Without modeling in any of MX's cost reduction for 2017, the stock could trade at around $10, assuming a 10x EBITDA multiple for 27% upside. Modeling $14mm of cost reductions takes that PT to $13. Another consideration to take into account is that MX trades at its lowest P/S multiple ever.

A writeup on Valueinvestorsclub makes the case that the stock could eventually trade in the $20s, and I don't doubt that possibility eventually.

3/5/17

If our time horizon is now until the end of the year, then my top pick would be VCRA, which is essentially a SaaS company that is being valued like a med. tech. company. If you aren't familiar with the stock, then all you really need to know is that they sell communications software/devices that are designed to replace pagers/intercoms at hospitals and have been shown to drive huge gains in terms of efficiency and patient safety/satisfaction. The recurring revenue piece of the business is really taking off, the company has consistently beat earnings expectations, and yet the valuation isn't anywhere close to what it should be for a software-centric company growing at 20%+ per year. Right now, it's one of the few stocks that still appears to be undervalued to me.

3/5/17

I'll take a look, thanks for the post.

3/16/17
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7/14/17
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