Saturday, 8 October 2016
Saturday, 1 October 2016
Sunday, 25 September 2016
Recap & Analysis September 24th 2016
This past week was relatively uneventful as I chose to hold one of my larger positions and sell off my remaining exposure within biotech. This post will analyze my activity with both Gold Standard Ventures Corp (GSV) and Stem cells inc (STEM).
Gold Standard Ventures Corp (GSV)
Gold Standard Ventures Corp is a mineral exploration company, which essentially means they are in the business of acquiring and exploring a myriad of gold projects based out of North central Nevada. Gold Standard Ventures Corp (GSV) operates in both the U.S. and Canada geographic segments. Its portfolio of projects includes Railroad-Pinon, East Camp Douglas, Crescent Valley North, Safford Claims-Silver Project & East Bailey. My initial investment within this business was worth around $107,200 (40,000 shares @ 2.68). Over the course of ownership the share price plummeted to about $2.34 impacting my portfolio drastically. Although it did change my view of the company in the interim I still held onto my belief that ultimately depended on the recovery of the gold market as a whole. This belief was fuelled by several factors. Firstly, I researched the active projects at GSV. After conducting some basic research I was able to extrapolate the fact that both the railroad-pinon project and Crescent Valley North project were widely regarded as some of the most promising projects within the industry. Following my initial interest in this company it was announced that GSV would me making a $13.4 million contribution to its existing Railroad Pinion project in Nevada. A key component to the flagship Railroad- Pinion Project is the the fact that it is classified as a high grade zone. Finding high grade gold at these widths (this near surface and in this part of the world) makes this company a legitimate acquisition target creating tremendous upside. Although I am currently in the red I would hold it in both my personal and virtual portfolio.StemCells Inc (STEM)
Stem Cells Inc represents my most profitable virtual trade to date. I initially purchased 8253 shares at $1.37. StemCells inc has a strong focus on developing and commercializing genetic modification based treatment. If implemented on a mass level it could ignite an entirely new sub-sector within biotechnology. Following a stage 2b update STEM sky rocketed about 10 percent within an hour of the market being open. This has taught me that having a comfortable cash reserve plays a crucial role in trading as if I was able to invest a higher amount into STEM my return could of dramatically altered my portfolio.
Gold
I feel that this upcoming week will be filled with volatility and more importantly opportunity. Gold generally acts inverse to the value of the dollar. When investors feel unconfident about US currency they often convert any cash into gold. With Donald Trump closing in on Hillary Clinton their is great uncertainty in the air regarding the US economy as a whole. If I were to place my bet I would say that leading up to and following the debate scheduled for Monday equities in general will fall including the dollar and we will see a noticeable rise in commodities, specifically gold. Gold is seen by many as a potential trading standard in the event of economic destruction. This destruction may be seen more likely in the current political climate.
Sunday, 18 September 2016
Recap & Analysis September 17th 2016
The past week has had a net negative impact on both my virtual and personal portfolio. I have chosen to expand and elaborate on my positions within Applied Genetics Technologies inc (AGTC) and Apple (AAPL).
AGTC
I initially purchased 6723 shares of AGTC at $12.73. Applied Genetics Technologies inc serves as a crucial player in the genetic modification field. AGTC develops and clinically tests gene therapy products/treatment. These products are designed to benefit those suffering from severe diseases related to ophthalmology. It's current lead candidates are designed to treat X linked retinoschisis, achromatopsia and retinitis pigmentosa. I truly feel that the genetic sub-sector within biotechnology will undergo dramatic growth over the course of the upcoming years. This trade expressed my confidence and view of the industry as a whole. Following developing a basic understanding of the business I began to analyze the financials. Although expenses were increasing at an average rate of 73% year over year the increase in revenue more than made up for this. At year end 2014 this company had brought in $2.35MM where as at year end 2015 it was up to $49MM. This drastic increase dramatically altered the net income as it was up from ($24.38MM) to ($1.38MM). I was not too concerned with the current loss as I new that the industry as a whole was extremely capital intensive. Unfortunately after failing to meet clinical trial targets the share price tanked about 37% within about 30 mins of the markets opening. Although I submitted a stop loss order at $11.50 immediately after purchasing It was only executed at $9.73 impacting my portfolio drastically. This experience has allowed me to fully understand the dangers within this specific sector. Also it has allowed me to experience first hand the major drawback of Stop Loss orders which is the fact that they are not guaranteed. Overall with a 52 week target price of about $22.73 I would personally hold this stock in the hopes of future profits.AAPL
Apple is a business that In my opinion has been undervalued for quite some time now. In my personal portfolio I was able to establish a position in the mid 90's where as when this challenge ultimately began I felt that it was slightly to expensive for my liking although still undervalued overall. I felt that I would be able to take advantage of certain emotional investors in order to obtain a discount. Due to this I submitted a limit order at 106.30 for 600 shares. Following the underwhelming leaks and rumours of the upcoming iPhone the price finally dipped triggering my order. I was confident at this price as my calculated target price for apple was in the mid 120's. When dealing with a business that has close to 170 billion in cash it is very difficult for me to view it as anything other than a strong long term hold. Following the pre order release of the iPhone share prices soared up to around 115.43 which is when I submitted a market sell order gaining about 8 %. Although I continue to hold apple personally and still feel it is undervalued I believe that the capital could be put to work elsewhere to maximize returns.Stock to Watch: TSLA
Although tesla motors has experienced heavy criticism regarding its failure to reach profitability I believe that they are dramatically undervalued. Their progress within alternative energy based transportation has far surpassed that of any other auto manufacturer. I will be watching tesla's movement this week and potentially buying as it approaches $200 once again.Friday, 9 September 2016
Recap & Analysis September 10th 2016
This week has been one of extreme volatility specifically in biotechnology. This volatility has directly impacted my various positions within the sector. One of the most significant impact occurred within my holdings of AUPH (Aurinia Pharma Inc).
AUPH
I initially purchased 15,000 shares of AUPH at $1.96. Prior to bidding on this company I analyzed several key factors. Initially I began to understand the specific role this company played within the sector. I began to understand that Aurinia Pharmaceuticals developed and tested therapeutic drugs in order to treat autoimmune diseases such as rheumatoid arthritis or systemic lupus across North America. After developing a basic understanding about the business I analyzed the financials. At the time AUPH was trading at around forty-four percent of its 52 week high ($4.49) which immediately indicated opportunity. As I thought this decline was simply a result of delay rather than changes in core technology. I strongly believe that biotechnology as a sector is fuelled by clinical endpoint rather than specific time targets so long as intellectual property remains protected. AUPH is widely regarded within the Biotech community as the lead innovator within the autoimmune disease. Their primary drug candidate, Voclosporin was due for a clinical research update. Many industry insiders predicted modest progress to about stage 1b or 2a. I placed this trade with confidence that this drug had progressed more rapidly as a result of the past two delays. Ultimately, I didn't fear an immediate decline as I understood and believed in the technology. Luckily, It was announced that they were actually in stage 2b which meant they were not far off from qualifying for FDA approval. This resulted in an immediate 7.5% increase in the share price. I then sold all 15000 shares at $2.12. I chose to sell as I felt within the allocated time we have their are stronger areas in which capital could be placed. I continue to hold AUPH in my personal portfolio as I feel that within the the coming year shareholders will see tremendous growth. The current 52 week target price sits at 7.80 which is a 363% increase from todays price.
LULU
Throughout my short trading career I have typically bought, held and sold shares. This past week I was able to experience short selling. (Lululemon Athletica inc). Although I have conceptually understood short positions for a long time I have failed to act as a result of the potential downside. LULU or Lululemon has been something on my watch list for the past 8 months. It's rapid growth over the last 52 weeks truly interested me. After posting 3 consecutive quarters of better than expected EPS LULU grew about 43 percent over the course of the past year. After viewing and analyzing the financials I quickly identified the significant issue LULU faced. Although net revenue continued to rise steadily operating expenses disproportionately increased creating unsustainable future. After creating a financial model assuming a 35% tax rate, a 4 % quarterly rev growth rate, 1% quarterly operating exp growth rate and a 4.5 percent discount rate I was left of a current valuation of $58.65. At the time LULU was trading for approximately $70.04. This seemed like an ideal short opportunity which led me to place a short order of about 1000 shares. Following a lower than expected earnings report their was an immediate market correction of about 5% causing me to cover. Long term I believe that LULU will eventually fall (5-10%) resulting in a fair value in my opinion.
NEXT WEEK
This week I will be watching AGTC or Applied Genetic Technologies inc. This company has extreme short term and long term potential as they are expected to post clinical research results within the next 14 days. Analysts rate AGTC as a strong buy with a 52 week target price of $29.14 which is 236% up from the last price.
AUPH
I initially purchased 15,000 shares of AUPH at $1.96. Prior to bidding on this company I analyzed several key factors. Initially I began to understand the specific role this company played within the sector. I began to understand that Aurinia Pharmaceuticals developed and tested therapeutic drugs in order to treat autoimmune diseases such as rheumatoid arthritis or systemic lupus across North America. After developing a basic understanding about the business I analyzed the financials. At the time AUPH was trading at around forty-four percent of its 52 week high ($4.49) which immediately indicated opportunity. As I thought this decline was simply a result of delay rather than changes in core technology. I strongly believe that biotechnology as a sector is fuelled by clinical endpoint rather than specific time targets so long as intellectual property remains protected. AUPH is widely regarded within the Biotech community as the lead innovator within the autoimmune disease. Their primary drug candidate, Voclosporin was due for a clinical research update. Many industry insiders predicted modest progress to about stage 1b or 2a. I placed this trade with confidence that this drug had progressed more rapidly as a result of the past two delays. Ultimately, I didn't fear an immediate decline as I understood and believed in the technology. Luckily, It was announced that they were actually in stage 2b which meant they were not far off from qualifying for FDA approval. This resulted in an immediate 7.5% increase in the share price. I then sold all 15000 shares at $2.12. I chose to sell as I felt within the allocated time we have their are stronger areas in which capital could be placed. I continue to hold AUPH in my personal portfolio as I feel that within the the coming year shareholders will see tremendous growth. The current 52 week target price sits at 7.80 which is a 363% increase from todays price.
LULU
Throughout my short trading career I have typically bought, held and sold shares. This past week I was able to experience short selling. (Lululemon Athletica inc). Although I have conceptually understood short positions for a long time I have failed to act as a result of the potential downside. LULU or Lululemon has been something on my watch list for the past 8 months. It's rapid growth over the last 52 weeks truly interested me. After posting 3 consecutive quarters of better than expected EPS LULU grew about 43 percent over the course of the past year. After viewing and analyzing the financials I quickly identified the significant issue LULU faced. Although net revenue continued to rise steadily operating expenses disproportionately increased creating unsustainable future. After creating a financial model assuming a 35% tax rate, a 4 % quarterly rev growth rate, 1% quarterly operating exp growth rate and a 4.5 percent discount rate I was left of a current valuation of $58.65. At the time LULU was trading for approximately $70.04. This seemed like an ideal short opportunity which led me to place a short order of about 1000 shares. Following a lower than expected earnings report their was an immediate market correction of about 5% causing me to cover. Long term I believe that LULU will eventually fall (5-10%) resulting in a fair value in my opinion.
NEXT WEEK
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