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Investing

Ideas and Strategies on Investing.

Previous Articles

A Quick Look at Kindred BioSciences

9/28/2017

0 Comments

 
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When one of Kindred BioScience's founders was the Chief Executive Officer of OneWorld Health, he noticed something extraordinary. At OneWorld Health, a Gates Foundation-funded nonprofit that develops drugs for poverty-stricken patients, Richard was developing drugs to fight diseases like malaria and cholera. As he searched high and low for new drugs to help patients in the poorest parts of Africa and Asia, he realized that drugs for neglected diseases often come from the veterinary field.

Richard had stumbled onto something that few physicians today know, but was common knowledge two centuries ago. The fields of animal medicine and human medicine are brother and sister. Drugs that work for humans almost always work for animals, and drugs that work in animals virtually always work in humans. And diseases in animals, like Alzheimer’s disease, asthma, lupus, congestive heart failure, Crohn’s diseases, and cancer, are twins to those in people.

But despite this, there is a gap between the two fields. Veterinarians and physicians rarely talk to one another. Realizing this, Richard thought that perhaps, there might be hidden opportunities, drugs from the human pharmaceuticals field that might be developed for companion animals, drugs formerly forgotten or abandoned that could revolutionize care for animals.

As he looked further, he also discovered that veterinary market is just past a major tipping point. He found that it has recently become a vibrant, highly attractive field with low competition. In many ways, it echoes the human pharmaceutical field 30 or 40 years ago. That was the dawn of the golden age of pharmaceuticals when opportunity and profit were plentiful, reimbursement was simple, commercialization was affordable, and generics were obscure.

There are drugs, knowledge, and technology that exist on one side of the chasm between human and animal medicine that could transform medicine on the other side. KindredBio was founded to capitalize on this extraordinary opportunity and to carry the best medicines and technologies across this gap. 
​

​Kindred Biosciences, Inc., a development stage biopharmaceutical company, focuses on the development of therapies for pets. The company's product pipeline consists of small molecules and biologics for a range of indications in dogs, cats, and horses. Its lead product candidates include Zimeta, a dipyrone injection for the control of pyrexia (fever) in horses; and Mirataz, a mirtazapine transdermal ointment for the management of weight loss in cats. The company's other small molecule product candidates consist of KIND-014 for the treatment of equine gastric ulcers in horses; and KIND-015 for the management of clinical signs associated with equine metabolic syndrome. It is also developing biologics programs, such as KIND-510, a feline recombinant erythropoietin for the control of non-regenerative anemia in cats; KIND-011, an anti-tumor necrosis factor (TNF) treatment for newborn foals; KIND-502 for the treatment of allergic and immune-mediated diseases; KIND-0888, an antibody that targets CD20; various antibodies that target cytokines involved in atopic dermatitis; KIND-509, an antibody that targets the canine TNF; and KIND-Bodies, a novel biologics with certain advantages over antibodies, including bispecific binding. The company was founded in 2012 and is headquartered in Burlingame, California.
(Summary) (Company) (Chart)
24 September 2017
Price $7.40
1yr Target $9.88
Analysts 3
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 33.51%
Yield 0.00%
1yr Tot Return 33.51%

P/E ---
PEG ---
Beta 0.19


EPS (ttm) $-1.17
EPS next yr $-1.03
Forward P/E ---
EPS next 5yr 40.00%
1yr Price Support ---

Market Cap $206.02 Mil
Revenues $--- Bil
Earnings $-24.80 Mil
Profit Margin ---

Quick Ratio 29.90
Current Ratio 29.90
Debt/Equity 0.00


1yr RevGR ---
3yr RevGR ---
5yr RevGR ---

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA -35.40%
ROE -37.00%


Our Pets.

Over the last couple of decades the role of pets in our lives has changed. They have now become full members of the family. Illustrative of this, we spend $700 million every year on Valentine’s Day gifts for our beloved pets. We also spend $1.5 billion per year for knee surgeries for our dogs.

Today, there is a critical need for, and willingness to pay for, innovative medicines for our pets. However, there are very few companies dedicated to developing such therapies. It is a burgeoning market in dire need.

Kindred BioScience’s mission is to bring to our animal family members the same kind of innovative, breakthrough medicines that our human family members enjoy.

The Company's core strategy is to leverage the billions of dollars that have been invested by other companies in human pharmaceuticals by modifying, improving, and repurposing pre-existing drugs and targets that have already proven to be safe and effective in humans. For example, they are developing a canine version of Humira, one of the most successful human biologics on the market.

​In addition, they develop most of their drugs and biologics for between $3 million to $5 million and in only 3 to 5 years. Given that most veterinary drugs reach peak sales between $10 million and $100 million per year, the Company believes that the return on investment is very attractive.


This companion animal biotech sector is where the human biotech sector was a generation ago. Kindred BioScience believes that the pet pharmaceutical industry is poised to replicate the tremendous success seen in the human pharmaceutical industry over the last 25 years.

Kindred BioScience is one of the pioneers in this pet biotech field, and they have one of the best teams and pipelines in the industry. Their goal is to continue to build on their leadership position and transform veterinary medicine.
​

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Kindred BioSciences Weekly Chart

My Perspective

This company is an interesting twist on the entire BioTechnology Sector, which seems to be red hot these days. And while this company is specifically narrowed in on Pet BioScience, I believe there's quite a bit of money to be made investing in this area. People continue to spend, spend, spend on their pets.

This investment has to be based on the stock chart alone. The data available on the fundamentals is sketchy at best, and nonexistent at times. Therefore I look for support and resistance lines. In this case, it appears that there's support just above $7 per share so that's probably the best place to put a buy in. At $7.40, we're pretty close to that area right now. And with a projected $9.88 price target, we'll get a nice 33% return. And the closer the price gets to $7, the closer the one year return gets to 40%.

At this price it's tempting to pick up a hundred shares and see where this thing goes. I'll be monitoring the quarterly reports to see what kind of year over year and quarter over quarter comparisons develop. If things continue to improve, this could end up being a very nice investment.
​
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Interface Inc Revisited

9/26/2017

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Interface, Inc., is the future of carpeting for both the home and the office. It's the world's largest manufacturer of modular carpet that needs minimal installation and can be done literally by anyone. By installing it as squares or planks, the carpet can be easily removed or replaced in a single afternoon. It's also easy for the home owner to redesign the look of the home's living space over and over again. The company was founded in 1973, and is based in Atlanta, Georgia.

In 1973, Carpets International was founded by Ray Anderson. In the same decade, Interface introduced GlasBac, a patented structured backing system that has become the industry standard for high-performance modular backings. They also introduced Intersept, a proprietary antimicrobial preservationsless.
  • In 1982, Carpets International becomes Interface Flooring Systems, Inc, and Compact Carpet of Canada was acquired and named Interface Flooring Systems Canada, Inc.
  • In 1994, Interface began designing products utilizing a "Less is More" philosophy, and reduces average consumption of fiber by 10% per square yard in just 12 months. That year founder Ray Anderson read Paul Hawken's book The Ecology of Commerce, and then delivered his first environmental speech, which began Interface's journey to sustainability. Interface then launched ReEntry, a carpet reclamation program.
  • In 1998, Interface introduced a carpet tile product made with 100% recycled nylon face fiber and a layer of 100% recycled vinyl material in the backing. The company also introduced NexStep polyurethane cushion backing. Interface introduces the Portable Creel System, resulting in yarn savings of one million dollars per year.
  • In 1999, Interface introduced the first online product catalog for carpet - TheSampleCenter.com.
  • In 2003, Interface becomes the first carpet company to receive Environmentally Preferable Product (EPP) certification for its products and the first company to introduce Climate Neutral product offering through its Cool Carpet program. The company also announced a partnership with Tricycle Inc. to dematerialize their product development and sampling processes on a global basis.
​

​Interface, Inc. 
designs, produces, and sells modular carpet products primarily in the Americas, Europe, and the Asia-Pacific. It offers modular carpets under the Interface and FLOR brands; and carpet tiles under the GlasBacRE brand name for use in commercial interiors, including offices, healthcare facilities, airports, educational and other institutions, hospitality spaces, and retail facilities, as well as residential interiors. The company also provides two-meter roll goods that are structure-backed for use in education, healthcare, and government markets; and an adapted version of its carpet tile for the healthcare facilities market, as well as offers carpet replacement, installation, and maintenance services. In addition, it offers proprietary antimicrobial chemical compound for interior finishes under the Intersept trademark; TacTiles carpet tile installation system; raised/access flooring products under the Intercell brand; and turnkey project management services for national accounts and other customers through its InterfaceSERVICES business, as well as sells traditional adhesives and products for carpet installation and maintenance. The company sells its products directly to end-users; and to architects, engineers, interior designers, contracting firms, and other specifiers through independent contractors or distributors, as well as sells its FLOR branded products through catalogs and Internet. It operates 21 stores under the FLOR brand name in the United States and Canada; and has product showrooms or design studios in United States, Canada, Mexico, Brazil, Denmark, England, France, Germany, Spain, the Netherlands, India, Australia, Norway, the United Arab Emirates, Russia, Singapore, Hong Kong, Thailand, and China. The company was founded in 1973 and is headquartered in Atlanta, Georgia.
(Summary) (Company) (Chart)
24 September 2017
Price $21.40
1yr Target $21.40
Analysts 5
Dividend $0.26
Payout Ratio 32.91%

1yr Cap Gain 0.00%
Yield 1.21%
1yr Tot Return 1.21%

P/E 27.26
PEG 0.82
Beta 1.20


EPS (ttm) $0.79
EPS next yr $1.32
Forward P/E 16.27
EPS next 5yr 33.10%
1yr Price Support $43.69

Market Cap $1.31 Bil
Revenues $960.70 Mil
Earnings $50.10 Mil
Profit Margin 5.21%

Quick Ratio 1.50
Current Ratio 2.60
Debt/Equity 0.69


1yr RevGR -4.30%
3yr RevGR 0.00%
5yr RevGR 0.11%

1yr EarnGR -24.55%
3yr EarnGR 4.32%
5yr EarnGR 7.06%

1yr DivGR 21.42%
3yr DivGR 100.00%
5yr DivGR ---

ROA 6.30%
ROE 14.50%



​My Perspective

The idea of carpet tiles is not new and Interface has plenty of competition as traditional carpet manufacturers branch out into the carpet tile business. In addition, the cost of design and innovation has caused its earnings to be a little volatile although positive.

The business is also tied to the economy as a good portion of their business is to other businesses, so a business recession would impact earnings. But I think that may be changing as their designs become more interesting to the DIY home remodeler. 

I've owned shares in this company since January 2016 and it's been a nice investment but not a very exciting investment. I got in at a price of about $16 per share and today it sits at $21.40. That's about a 33% return. Add in about 2% in dividends and the return becomes acceptable for less than two years but nothing to get overly excited about. 

But recently the stock has been hitting new highs. And that's what got my attention again. When I originally bought these shares I expected a price target of $25 within a year. And although it didn't make that price target, I think it may once again be on a trajectory toward $25. That's about 17% above today's current price. That's not an exciting return but it's not a bad return either. 

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Micron Technology

9/21/2017

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Micron Technology, Inc. provides semiconductor systems worldwide. The company operates through four segments: Compute and Networking Business Unit, Storage Business Unit, Mobile Business Unit, and Embedded Business Unit. It offers DDR3 and DDR4 DRAM products for computers, servers, networking devices, communications equipment, consumer electronics, automotive, and industrial applications; mobile low-power DRAM products for smartphones, tablets, automotive, laptop computers, and other mobile consumer device applications; DDR2 and DDR DRAM, GDDR5 and GDDR5X DRAM, SDRAM, and RLDRAM products for networking devices, servers, consumer electronics, communications equipment, computer peripherals, automotive and industrial applications, and computer memory upgrades; and hybrid memory cube semiconductor memory devices for use in networking and computing applications. The company also provides NAND Flash products, which are electrically re-writeable, non-volatile semiconductor memory devices; client solid-state drives (SSDs) for notebooks, desktops, workstations, and other consumer applications; enterprise SSDs for server and storage applications; managed multi-chip package products; digital media products, including flash memory cards and JumpDrive products under the Lexar brand name. In addition, it manufactures products that are sold under other brand names; and resells flash memory products that are purchased from other NAND Flash suppliers. Further, the company provides 3D XPoint memory products; and NOR Flash, which are electrically re-writeable and semiconductor memory devices for automotive, industrial, connected home, and consumer applications. It markets its products to original equipment manufacturers and retailers through its internal sales force, independent sales representatives, and distributors; and through a Web-based customer direct sales channel, and channel and distribution partners. The company was founded in 1978 and is headquartered in Boise, Idaho.
(Summary) (Company) (Chart)
19 September 2017
Price $35.95
1yr Target $43.72
Analysts 27
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 21.61%
Yield 0.00%
1yr Tot Return 21.61%

P/E 16.56
PEG 16.56
Beta 1.77


EPS (ttm) $2.17
EPS next yr $6.25
Forward P/E 5.76
EPS next 5yr 1.00%
1yr Price Support $6.25

Market Cap $39.97 Bil
Revenues $17.40 Bil
Earnings $2.55 Bil
Profit Margin 14.65%

Quick Ratio 1.50
Current Ratio 2.10
Debt/Equity 0.72


1yr RevGR -23.43%
3yr RevGR 10.85%
5yr RevGR 7.12%

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA 8.40%
ROE 18.60%


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Micron Daily Chart
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Micron Weekly Chart


My Perspective

DRAM producers are notoriously famous for being cyclical. Micron Technology is no different. So for me this could never be a long term investment. The way I'm approaching it is through swing trading. As seen in the charts above, the weekly average moved up through the 40 week moving average in the spring of 2016. That was obviously a great time to invest as the price was on a long term reversal. But having missed that opportunity, where was a more recent place to invest?

More recently the stock saw a triple top near $32 per share so that was great time to buy as it moved up through that resistance. That would have brought in a quick 10% move. Today it sits just below $36 per share. Based on the charts above this doesn't seem significant. On a longer chart (P&F), it can be seen that about 30 months ago there was serious resistance at this level. 

This is somewhat significant because a move above $36 would shoot through resistance and then leave only blue sky ahead. That's important because at that point almost no one has a losing position and no one is trying to actively break even and get out. Above $36 and there is not resistance. Projections have this stock going to $43 within the year and I think that's very possible. But being a cyclical stock, I'll be watching this closely. Any weakness and I'd sell quickly. In the meantime, this could be a very nice 20% gainer.

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Manipulating the Genome

9/19/2017

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As most will agree, the search for the medical cures of tomorrow will ultimately be found inside the Human Genome. And those cures will be treated by editing the gene sequences to eliminate the defective sequences. We're only now scratching the surface of this relatively new technology and there'll be both corporate winners and losers in the years ahead. Today I want to look at three gene editing companies that are on the cutting edge of this movement and could be the big winners in this nascent scientific endeavor.
​
 

​Editas Medicine, Inc. operates as a genome editing company. It focuses on treating patients with genetically defined diseases by correcting their disease causing genes. It is developing a proprietary genome editing platform based on CRISPR technology to target genetically defined diseases with an initial focus on debilitating illnesses where there are no approved treatments. Editas Medicine, Inc. has a collaboration and license agreement with Juno Therapeutics, Inc. for the research and development of engineered T cells with chimeric antigen receptors and T cell receptors; and collaboration, option, and license agreement with Adverum Biotechnologies, Inc. to explore the delivery of genome editing medicines for the treatment of inherited retinal diseases. The company was formerly known as Gengine, Inc. and changed its name to Editas Medicine Inc. in November 2013. Editas Medicine, Inc. was founded in 2013 and is based in Cambridge, Massachusetts.
(Summary) (Company) (Chart)
17 September 2017
Price $20.94
1yr Target $35.25
Analysts 6
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 68.33%
Yield 0.00%
1yr Tot Return 68.33%

P/E ---
PEG ---
Beta ---


EPS (ttm) $-3.19
EPS next yr $-2.85
Forward P/E ---
EPS next 5yr ---
1yr Price Support ---

Market Cap $876.55 Mil
Revenues $5.60 Mil
Earnings $-117.90 Mil
Profit Margin ---

Quick Ratio 6.70
Current Ratio 6.70
Debt/Equity 0.26


1yr RevGR ---
3yr RevGR ---
5yr RevGR ---

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA -38.20%
ROE -67.80%


Intellia Therapeutics Inc., a gene editing company, focuses on the development of therapeutics utilizing a biological tool known as the CRISPR/Cas9 system. The company develops in vivo programs focused on liver diseases, including transthyretin amyloidosis, alpha-1 antitrypsin deficiency, hepatitis B virus, and inborn errors of metabolism programs. Its ex vivo pipeline includes proprietary and partnered programs focuses on chimeric antigen receptor T cells and hematopoietic stem cells. Intellia Therapeutics Inc. has collaboration agreement with Novartis Institutes for BioMedical Research, Inc.; Regeneron Pharmaceuticals, Inc.; and Caribou Biosciences, Inc. The company was formerly known as AZRN, Inc. and changed its name to Intellia Therapeutics Inc. in July 2014. Intellia Therapeutics Inc. was founded in 2014 and is headquartered in Cambridge, Massachusetts.
(Summary) (Company) (Chart)
17 September 2017
Price $22.68
1yr Target $27.17
Analysts 6
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 19.79%
Yield 0.00%
1yr Tot Return 19.79%

P/E ---
PEG ---
Beta ---
EPS (ttm) $-1.33
EPS next yr $-2.06
Forward P/E ---
EPS next 5yr ---
1yr Price Support ---

Market Cap $794.93 Mil
Revenues $22.60 Mil
Earnings $-46.30 Mil
Profit Margin ---

Quick Ratio 9.30
Current Ratio 9.30
Debt/Equity 0.00
1yr RevGR ---
3yr RevGR ---
5yr RevGR ---

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA -16.20 
ROE -22.70%
CRISPR Therapeutics AG, a gene editing company, focuses on developing transformative gene-based medicines for the treatment of serious human diseases using its proprietary clustered, regularly interspaced short palindromic repeats associated protein-9 (CRISPR/Cas9)gene-editing platform in Switzerland. The CRISPR/Cas9 technology allows for changes to genomic DNA. It has a collaboration agreement with Vertex Pharmaceuticals, Incorporated to develop, manufacture, commercialize, sell, and use therapeutics; a license agreement with Anagenesis Biotechnologies SAS; and a service agreement with MaSTherCell SA to develop and manufacture allogeneic CAR-T therapies. The company also has research collaboration agreements with Neon Therapeutics and Massachusetts General Hospital Cancer Center to develop novel T cell therapies for cancer. CRISPR Therapeutics AG is headquartered in Basel, Switzerland.
​(Summary) (Company) (Chart)
17 September 2017
Price $19.19
1yr Target $23.80
Analysts 5
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 24.02%
Yield 0.00%
1yr Tot Return 24.02%

P/E ---
PEG ---
Beta ---
​
EPS (ttm) $-0.07
EPS next yr $-3.02
Forward P/E ---
EPS next 5yr ---
1yr Price Support ---

Market Cap $793.89 Mil
Revenues $10.20 Mil
Earnings $-41.40 Mil
Profit Margin ---

Quick Ratio 17.80
Current Ratio 17.80
Debt/Equity 0.00
1yr RevGR ---
3yr RevGR ---
5yr RevGR ---

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR --- 

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA -13.20%
ROE -28.40%
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My Path Forward

This really is the future of BioTechnology and to not have a stake in it is just crazy. These may not be the eventual winners but this early in the development of this science it's prudent to be in the game. So my path forward, based on my limited knowledge of gene editing limited to a few college courses, is to buy a small position in all three companies. This is based on the fact that all three companies are tied in with, and partnered with, some large capitalization pharma companies that have the financial backing to push this forward. 

​I expect to get a lot of my investing intelligence from the daily, weekly and monthly charts. I will be watching the price and volume movements to determine what other investors and traders are buying and selling. That may seem like simply following the crowd, and in many ways it is, I'll be watching the momentum indicators to try to anticipate moves both up and down. I'll also rely on earnings expectations and announcements to look for changes from quarter to quarter and year to year.

Over time I should be able to determine the winners and losers. And the winners are the ones I'll be increasingly adding to my portfolio.


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Investment Risk vs Inflation

9/14/2017

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I wish I could invest without risk. I wish I could get a guaranteed return on my investment. I wish there was no such thing as inflation. But wishing for things is simply the desire for things that I have no other way of getting. Risk is everywhere and inflation has been around longer than I’ve been alive. Unfortunately both are here to stay.

Risk is dangerous. Risking anything means I could lose it. Purchasing a stock could result in a loss of equity in my account if the stock goes down. But the risk of doing nothing could be just as damaging because inflation will eat away at my purchasing power. To avoid this risk of simply doing nothing I’m forced to take the risk of doing something. It is this realization that I am being forced into accepting risk whether I do something or nothing is what resonates at the core of my financial existence. If I do nothing I am sure to lose and if I do something there is a serious potential for loss. I have no choice. I’m forced to accept risk. Risk itself is inherent in life as life moves through time.

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​Once I come to terms with risk and this fear of financial loss, I come to understand that I must take on risk in order to at least keep up with inflation if I am to maintain the purchasing power of my savings. If all I want to do is maintain that purchasing power then I look for the minimum risk that I’m required to accept. For me risk is defined as the probability that my trade will end in a loss. It’s the chance of losing money when I buy and sell stocks and options. For me it’s also directly related to the chance of making money in the market. The more risk I take on, the more reward I expect to make.

This risk and reward are simply fear and greed. They’re the same fear and greed that move the markets. They’re the emotions that excite and paralyze every investor and are the cause of so many mistakes in trading. For most traders the fear of loss is a greater emotional event than greed and will drive trading decisions to a greater degree than greed, but both emotions will interfere with the logic of trading and ultimately interfere with an investor’s trading plan.

It’s because of these two emotions that a trading plan becomes an absolute necessity. A good trading plan will describe the conditions for entering a trade, exiting a trade, and the subsequent transactions when the trade goes sour. All three parts of the plan are necessary because of the existence of risk. The minute I enter a trade I’m putting my money at risk. I could be completely wrong in understanding the situation or I could be exactly right yet my timing could be completely off. Because of risk the trade may immediately start to lose money. Since that possibility always exists, I need to know what to do even before I enter the trade. Without a plan I’m immediately subject to my emotions and I end up doing either nothing or the wrong thing. Both of these decisions would have a disastrous effect on my accounts.

"Life is inherently risky. There is only one big risk you should avoid at all costs, and that is the risk of doing nothing."
-- Denis Waitley, Author, Consultant, and Motivational Speaker.
With a trading plan I simply execute the plan whether everything is going great or everything is going terrible. My plan tells me what to do regardless of the developing situation. Emotions are not involved in the decision making process. Fear and greed are controlled and risk is successfully managed. Success ends up being the result of allowing the winning trades to occur while limiting the losing ones.

Understanding the debilitating effects of risk and the need to control the emotions associated with risk by developing a trading plan was the beginning of me becoming a successful trader.
​

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The News is a Lagging Indicator

9/12/2017

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For the most part, there’s always a lag in the news. It’s not as bad as it use to be years ago but it’s still there. The news media are always reporting something that’s already happened. Sometimes days ago, sometimes only a few hours ago, but for the most part the event is already over and professional traders have already placed their trades. I’m not the last one to know what’s going on but I’m definitely not the first. That information had to get to a reporter before it can get to me and you can bet it got to a lot of trading desks long before it got to that reporter.

The average investor doesn’t understand, or at least doesn’t appreciate, this lag in reporting. What most investors do when they hear either good news or bad news is to immediately react to the news by either buying or selling the stock. And since this lag in the news means that he’s reacting on old news, he’s getting in late.

News tends to spread out gradually over time. And over time there’s a gradual building of volume and inertia in the buying or selling. As I’ve pointed out in other posts I may never know the real reason that investors begin to buy or sell a stock in unison but in all likelihood I will eventually be given a reason by the business news media. They give a reason every day for why the stock market moved and sometimes they’re even correct. But whether they know why a stock or the market goes up or down they’ll always give a reason when they quote prices during the business news. It both reassures the public and at the same time hides the ignorance of the business newscaster who in all likelihood doesn’t know any more that you or I do.

​"Every day, self-proclaimed stock market experts tell us why the market just went up or down, as if they really knew. So where were they yesterday?"
-- Anonymous.
Here’s why charts are so important to me. Traders trading stock in the market is what creates volume, and volume along with price is recorded and plotted moment by moment on a stock’s chart. Any good charting website like StockCharts.com or FINVIZ will show in real time exactly what’s happening to a stock’s price and volume. If a stock is increasing or decreasing in price while increasing in volume, then I know that someone knows something and they’re acting on that information by trading in the stock. As volume builds and the price starts to trend, I’m seeing the evidence of trading on that information as it spread out to other traders who are acting similarly on that information. The more volume that comes in as the price is extended the better (or worse) the news will be when it’s reported hours later on the internet, that evening on television, or tomorrow morning in the newspaper. The poor guy that finds out in the newspaper will more than likely be the last to the party.

So what good is the news and how do I use it. If the news is good I expect buying to come in the next day. If the news is bad I expect selling to come in the next day. This makes sense to the average investor so he buys or sells on the news and expects the market to confirm his investment decision. Sometimes, however, good news or bad news breaks and the stock trades sideways. At that point the market is telling me that the news got out yesterday and is no longer driving the stock. The average investor got in too late. I immediately check my momentum indicators and oscillators to see what the stock is really doing and most of the time it’s getting ready to roll over and reverse direction. Knowing this I trade with the traders of the stock and not with the news.

In the end stocks are going to do what stocks do and not what’s expected by the news. The news is a lagging indicator. It’s like trying to drive down a road while only looking at the rearview mirror. It’s impossible to do. I watch charts and not the news. I look at charts to tell me when to buy and sell stocks. If you spend the time to understand what price and volume are telling you and you learn about momentum indicators and oscillators and what they can tell you about the movement of stock prices, then you can visually see which way traders are pushing a stock and you can financially benefit from this information. Knowledge can make you rich if you learn how to act on that knowledge. And simply by thinking you can earn a decent living.
​

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Pragmatism in Investing

9/11/2017

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Stocks don’t go up or down forever. They go up as long as investors push them up and they go down as long as investors push them down. In each case they will eventually reverse and head in the opposite direction. They do this for many reasons like product cycles, earnings surprises, buying seasons, management changes, fed policy, wars and more. Every company and every stock will rise and fall for its own reasons and investors may never know why until days or weeks later. Recognizing where a stock price is headed will greatly enhance your returns and recognizing reversal points will tell you when to get in or out.

“It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.” 
-- Charles Darwin, English Naturalist.
For those stocks that I just want to buy, hold and collect the dividends, I want to be able to get in at the best possible price. I look at the charts for reversal patterns where the stock is oversold and about to turn up. The best way of doing that is by looking at the momentum indicators and oscillators and seeing the momentum shifts in investor sentiment. I also look at the longer time frame chart (weekly chart) for support levels and identify the level that I think is the best possible price I can get. I then go back and look at the daily chart to determine the specific reversal patterns I like to use.

If both the daily and the weekly charts are bottoming out and beginning to turn up, this is the best possible time for me to maximize my buying. This is the point I want to accumulate as much stock as I can afford. Buying at this point doesn’t affect the dividend amount paid per share but it does affect the number of shares I am able to buy and therefore increases the income paid to me at the next dividend payment date. This could be considered my “buy low, hold, and live off dividends” strategy. If I got into my position by selling puts in the first place then the strategy is even that much better!

I’ve used this strategy over and over again to build up a portfolio of stocks that pay nice quarterly dividends. But stocks reverse on the top side also. If I own stocks that I want to continue to hold simply for the pleasure of receiving those nice quarterly dividend checks, I sell covered calls off those positions as I see the stocks begin to roll over and reverse. Covered calls are a great strategy for increasing your income above and beyond receiving simply that quarterly dividend. And since options are usually sold with monthly expirations they provide a nice monthly income supplement to those quarterly dividends. I guess this could be called my “sell naked put, buy stock low, hold, live off dividends, sell covered calls for additional income” strategy.

For the most part, this is how I run my portfolio. This strategy is a fairly simple and straight forward plan. I do, however, have a very small portion set aside for the sole purpose of selling covered options. I do this for the purpose of generating income to finance that larger portion discussed above. It is here that I use my knowledge of stock reversals to sell covered puts and calls. This strategy is based on finding high beta stocks that show definite patterns of reversals. This strategy also requires the extensive use of momentum indicators and oscillators to determine when stocks are either overbought or oversold.

My strategy is to sell covered puts on stocks that appear to be oversold and turning up. I generally sell puts at-the-money or in-the-money with the expectation that the stock will turn up and the put will expire worthless. I then simply keep the premium or fee and look for another candidate. Occasionally I misgauge the amount the stock will move up after the reversal and I end up having the stock put to me. In those cases I sell calls at the same or slightly higher strike price so I can collect the largest premium possible as I exit the stock. Once back in cash, I look for another put candidate.

This portion of my account is relatively small but I like to turn it over quickly and continuously to keep a constant flow of income. This is the fuel that feeds the larger portion of my account. In order to do this, I prefer to sell options that expire weekly. I like being able to go completely to cash at the end of the week and then having the weekend to review the charts.

I guess this would be my “sell puts on Monday and they expire worthless on Friday” strategy.  My target return for this strategy is 1% per week. That’s not always possible but it’s the goal I use in comparing the returns on various options. For instance, on a $50 stock option ($5,000) I would like to make $.50 ($50) for the week. Doesn’t seem like much but percentage wise, it is. A 1% gain per week is a 52% gain per year. And while I can’t do that on a consistent basis, if I can get even half that amount it’s still outstanding by any measure. But as I mentioned above this is only a very small portion of my account because this is an extremely risky strategy and the possibility of total loss of equity is always there.

Remember to always do your homework before you invest. Always invest with a plan and always have an exit strategy.

Trade for today, invest for the future.
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0 Comments

Edwards Lifesciences

9/8/2017

0 Comments

 
Edwards Lifesciences Corporation is the global leader in patient-focused innovations for structural heart disease and critical care monitoring. The Company partners with the world’s leading clinicians and researchers and aggressively invests in research and development to transform care for structural heart disease and critically ill patients. A pioneer in the development of heart valve therapies, the Company is the world’s leading manufacturer of heart valve systems and repair products used to replace or repair a patient’s diseased or defective heart valve. Their innovative work in heart valves encompasses both surgical and transcatheter therapies for heart valve replacement. They are also the global leader in hemodynamic monitoring systems used to measure a patient’s cardiovascular function in the hospital setting.
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Cardiovascular disease is the number-one cause of death in the world, and is the top disease in terms of health care spending in nearly every country. Cardiovascular disease is progressive in that it tends to worsen over time and often affects the structure of an individual’s heart.
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Patients undergoing treatment for cardiovascular disease can be treated with a number of the Company's medical technologies. For example, an individual with a heart valve disorder may have a faulty valve that is affecting the function of their heart or blood flow throughout their body. A clinician may elect to remove the valve and replace it with one of the Company's bioprosthetic surgical tissue heart valves, surgically re-shape and repair the faulty valve with the Company's annuloplasty ring, or implant the Company's transcatheter valve via a catheter-based system that does not require traditional open-heart surgery and can be done while the heart continues to beat.

​Patients in the hospital setting, including high-risk patients in the operating room or intensive care unit, are candidates for having their cardiac function or fluid levels monitored by the Company's Critical Care products. These technologies enable proactive clinical decisions and may be important for improving diagnoses and developing individualized therapeutic management plans for patients. 


​Edwards Lifesciences Corporation provides products and technologies to treat structural heart disease and critically ill patients worldwide. It offers transcatheter heart valve therapy products comprising transcatheter aortic heart valves and their delivery systems for the nonsurgical replacement of heart valves. The company also provides surgical heart valve therapy products, such as pericardial valves for aortic and mitral replacement, and minimally invasive aortic heart valve system; and tissue heart valves and repair products, which are used to replace or repair a patient's diseased or defective heart valve. In addition, it produces pericardial valves from biologically inert animal tissue; and provides heart valve repair therapies, including annuloplasty rings and systems. Further, the company offers critical care products, such as hemodynamic monitoring systems to measure a patient's heart function in surgical and intensive care settings; pulmonary artery catheters; and Oximetry Central Venous Catheters for continuous measurement of central venous oxygen saturation. Additionally, its critical care products include disposable pressure monitoring devices and closed blood sampling systems to protect patients and clinicians from infection; and peripheral vascular products used to treat endolumenal occlusive disease, such as embolectomy catheters for removing blood clots from peripheral blood vessels. The company distributes its products through direct sales force and independent distributors. Edwards Lifesciences Corporation was founded in 1999 and is headquartered in Irvine, California.
(Summary) (Company) (Chart)
4 September 2017
Price $113.31
1yr Target $139.80
Analysts 20
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 23.37%
Yield 0.00%
1yr Tot Return 23.37%

P/E 34.32
PEG 2.10
Beta 0.65


EPS (ttm) $3.30
EPS next yr $4.18
Forward P/E 27.08
EPS next 5yr 16.38%
1yr Price Support $68.46

Market Cap $23.85 Bil
Revenues $3.23 Bil
Earnings $716.20 Mil
Profit Margin 22.16%

Quick Ratio 3.20
Current Ratio 4.10
Debt/Equity 0.35


1yr RevGR 18.85%
3yr RevGR 13.01%
5yr RevGR 12.04%

1yr EarnGR 16.00%
3yr EarnGR 14.97%
5yr EarnGR 21.39%

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA 15.30%
ROE 26.10%


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Edwards Lifesciences’ Product and Technology Offerings 

The following are the main areas of products and technologies that the Company offers to treat advanced cardiovascular disease. They are categorized into three main areas: Transcatheter Heart Valve Therapy, Surgical Heart Valve Therapy, and Critical Care. 
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Transcatheter Heart Valve Therapy

Edwards Lifesciences is a global leader in transcatheter heart valve replacement technologies designed for the nonsurgical replacement of heart valves. The Edwards SAPIEN family of valves, including Edwards SAPIEN XT and Edwards SAPIEN 3 transcatheter aortic heart valves and their respective delivery systems, are used to treat heart valve disease using catheter-based approaches for certain patients for whom traditional open-heart surgery is not optimal. Delivered while the heart is beating, these valves can enable patients to experience a better quality of life sooner than patients receiving traditional surgical therapies. The Company began offering transcatheter heart valves to patients commercially in Europe in 2007, in the United States in 2011, and in Japan in 2013. As of December 31, 2016, the transcatheter aortic heart valves were available in more than 65 countries. Supported by extensive customer training and service, and a growing body of compelling clinical evidence, the SAPIEN family of transcatheter aortic heart valves are the most widely prescribed transcatheter heart valves in the world.

Sales of the Company's transcatheter heart valves represented 55%, 47%, and 41% of net sales in 2016, 2015, and 2014, respectively.

Surgical Heart Valve Therapy

The core of the Company's surgical tissue heart valve product line is the Carpentier-Edwards PERIMOUNT pericardial valve platform, including the line of PERIMOUNT Magna Ease pericardial valves for aortic and mitral surgical valve replacement. With more long-term clinical publications on durability and performance than any other surgical valve, PERIMOUNT valves are the most widely implanted surgical tissue heart valves in the world. The Company's EDWARDS INTUITY Elite Valve System, available in Europe, the United States, and certain other geographies, is a minimally invasive aortic heart valve system designed to enable faster procedures, shorter patient times on cardiopulmonary bypass, and smaller incisions. In addition to the Company's replacement valves, Edwards Lifesciences pioneered and is the worldwide leader in surgical heart valve repair therapies, including annuloplasty rings and systems. The Company is also the global leader in cardiac cannula devices and offer a variety of innovative procedure-enabling platforms to advance minimally invasive surgery.

Sales of the Company's surgical tissue heart valve products represented 23%, 28%, and 31% of net sales in 2016, 2015, and 2014, respectively.

Critical Care

Edwards Lifesciences is a world leader in hemodynamic monitoring systems used to measure a patient’s heart function and fluid status in surgical and intensive care settings. Hemodynamic monitoring enables a clinician to balance the supply and demand of oxygen in critically ill patients, and plays an important role in enhancing surgical recovery by enabling appropriate tissue and organ perfusion, and ultimately enabling the improvement of patient outcomes and survival. The Company's hemodynamic monitoring technologies are used before, during, and after surgeries, such as open-heart, major vascular, major abdominal, neurological, and orthopedic surgical procedures; as well as for acutely ill patients with conditions such as sepsis, shock, acute respiratory distress syndrome, and multi-organ failure.

Edwards’ complete hemodynamic portfolio helps clinicians make proactive clinical decisions for their patients, and includes the minimally invasive FloTrac system and the noninvasive ClearSight system. The Company's hemodynamic monitoring portfolio also comprises the Swan-Ganz line of pulmonary artery catheters and the Edwards Oximetry Central Venous Catheters for continuous measurement of central venous oxygen saturation. The EV1000 clinical monitoring platform displays a patient’s physiological status and integrates many of the sensors and catheters into one platform, giving clinicians multiple options to meet their clinical and patient needs.

Edwards Lifesciences is also the global leader in disposable pressure monitoring devices and innovative closed blood sampling systems to help protect both patients and clinicians from the risk of infection.

They manufacture and sell a variety of peripheral vascular products used to treat endolumenal occlusive disease, including the Fogarty line of embolectomy catheters, which has been an industry standard for removing blood clots from peripheral blood vessels for more than 40 years.

​Sales of the Company's core hemodynamic products represented 12%, 13%, and 15% of net sales in 2016, 2015, and 2014, respectively. 

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My Perspective

There's no doubt that by most measures this stock is expensive. Most quality company's stock is expensive and this is no exception. Edwards Lifesciences is a leader in the treatment of structural heart disease and I like to invest in leaders. I intend to initiate a position in this company in the very near future but I'm going to try to get it as cheaply as possible. To me, that means a price at or below $110 per share. At the price the one year estimated capital gain would increase to 27% and that's a very nice return for a large capitalization company. 

I also think this company will remain the leader in this area so I believe it will maintain its premium pricing. I also believe the price of these shares will increase along with the earnings growth rate of over 16% and that's the kind of return I would like from all my investments.

0 Comments

Abeona Therapeutics

9/7/2017

0 Comments

 
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​Abeona Therapeutics
, a biopharmaceutical company, focuses on developing and delivering gene therapy and plasma-based products for severe and life-threatening rare diseases. The company offers MuGard, a mucoadhesive oral wound rinse for mucositis, stomatitis, aphthous ulcers, and traumatic ulcers; and ProctiGard, a mucoadhesive oral wound rinse for the treatment of rectal mucositis and radiation proctitis. Its lead program is an adeno-associated virus (AAV)-based gene therapy for sanfilippo syndrome. The company develops ABO-101 for Mucopolysaccharidosis (MPS) III, a sanfilippo syndrome Type B; ABO-102 for MPS III, a sanfilippo syndrome Type A; ABO-201 for juvenile batten disease; ABO-301 for fanconi anemia; and clustered, regularly interspaced short palindromic repeats (CRISPR)-CRISPR associated protein 9 AAV for rare blood diseases. It also develops PTB-101 salt diafiltration process (SDF) Alpha, a alpha1-proteinase inhibitor for chronic augmentation and maintenance therapy in adults with clinically evident emphysema due to severe deficiency of alpha1-proteinase inhibitor; and PTB-102 SDF IVIG, an intravenous immunoglobulin for autoimmune, infectious, and idiopathic diseases. The company was formerly known as PlasmaTech Biopharmaceuticals, Inc. and changed its name to Abeona Therapeutics Inc. in June 2015. Abeona Therapeutics Inc. was incorporated in 1989 and is based in Dallas, Texas.
(Summary) (Company) (Chart)
4 September 2017
Price $13.80
1yr Target $19.40
Analysts 5
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 40.57%
Yield 0.00%
1yr Tot Return 40.57%

P/E ---
PEG ---
Beta 2.28


EPS (ttm) $-0.60
EPS next yr $-0.76
Forward P/E ---
EPS next 5yr ---
1yr Price Support ---

Market Cap $589.81 Mil
Revenues $0.80 Mil
Earnings $-23.20 Mil
Profit Margin ---

Quick Ratio 14.00
Current Ratio 14.00
Debt/Equity 0.00


1yr RevGR -14.52%
3yr RevGR -24.00%
5yr RevGR -13.54%

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA -23.90%
ROE -26.70%


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My Path Forward

I started buying these shares as they moved above $11 per share and posted a new all time high. Since then I've been adding more shares as I continue to fill out this position in my portfolio. This appears to be a very strong high growth stock in a sector that is exploding. I intend to continue to add shares in this company as well as other biotech companies in the near future. I believe we are on the cusp os a biotech revolution that will continue for decades. I intend to own shares of those companies that appear to be at the forefront of upcoming technologies. This company appears to be one of them.

0 Comments

ImmunoGen

9/6/2017

0 Comments

 
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​ImmunoGen
, a clinical-stage biotechnology company, develops targeted anticancer therapeutics. The company develops its products using its antibody-drug conjugate (ADC) technology. The company's product candidates include mirvetuximab soravtansine, an ADC targeting folate-receptor alpha for the treatment of platinum-resistant ovarian cancer; IMGN529, an ADC that is in Phase 1b/2 clinical trials for B-cell malignancies; coltuximab ravtansine, which is in Phase 2 trials for B-cell malignancies; IMGN779 that is in Phase 1 clinical trials for the treatment of acute myeloid leukemia (AML); and IMGN632, a preclinical CD123-targeting ADC for the treatment of hematological malignancies, including AML. ImmunoGen, Inc. has collaborations with Roche; Bayer HealthCare AG; Sanofi; Biotest AG; Novartis Institutes for BioMedical Research, Inc.; Eli Lilly and Company; Amgen; Takeda Pharmaceutical Company Limited; Merck; and CytomX Therapeutics, Inc. ImmunoGen, Inc. was founded in 1981 and is headquartered in Waltham, Massachusetts.
(Summary) (Company) (Chart)
4 September 2017
Price $8.07
1yr Target $9.50
Analysts 6
Dividend $0.00
Payout Ratio 0.00%

1yr Cap Gain 17.71%
Yield 0.00%
1yr Tot Return 17.71%

P/E ---
PEG ---
Beta 2.35


EPS (ttm) $-1.21
EPS next yr $-1.51
Forward P/E ---
EPS next 5yr ---
1yr Price Support ---

Market Cap $755.19 Mil
Revenues $89.00 Mil
Earnings $-105.10 Mil
Profit Margin ---

Quick Ratio 2.30
Current Ratio 2.40
Debt/Equity ---


1yr RevGR 117.24%
3yr RevGR 36.16%
5yr RevGR -2.47%

1yr EarnGR ---
3yr EarnGR ---
5yr EarnGR ---

1yr DivGR ---
3yr DivGR ---
5yr DivGR ---

ROA -54.20%
ROE 68.20%


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​My Path Forward

I started buying these shares as they moved above their 40 wma. Since then I've been adding more shares as I continue to fill out this position in my portfolio. This appears to be a very strong high growth stock in a sector that is exploding. I intend to continue to add shares in this company as well as other biotech companies in the near future. I believe we are on the cusp os a biotech revolution that will continue for decades. I intend to own shares of those companies that appear to be at the forefront of upcoming technologies. This company appears to be one of them.

0 Comments
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    I am an Individual Investor with specific interest in long term growth and then enhancing my returns with income from dividends and derivatives. I don't recommend stocks to anyone (it's a good way to lose friends) and no one reading this should misinterpret my blog as a recommendation for any type of investment. I am writing this solely for myself and my kids.


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