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AG stock. Absolutely disagree. As a general matter, manipulation is illegal. In spades, if collusion is involved.
No. Nobody knows anything. The stock moved almost uninterrupted from $3.00 to $9.70. It's correction time. My ex-partner (broker) uses wave analysis and his interpretation of APDN's current position is that the move to $9.70 was indeed the 5th wave of the current upward trend. Given the current action, I'd go with his view. In the absence of meaningful news, we could be going side-ways to down for a while.
pasta...My take is this: Much of the volume in the market today is nothing other than hedges, algos and HFTs. They thrive on a situation like that of APDN. They look for situations where there is a lot of interest and an accompanying sharp upward movement in the stock. When the stock took off this morning, fueled by new interest and less-sophisticated traders, much of the stock sold to these buyers was shorted in the $8.50-9.10 range. These are not shorts that locate and borrow shares. They are manipulators who, thanks to the Madoff Exemption, can sell shares short without having to borrow. They have until T+3 (3 days) to buy back these shares.
So, after putting on the short, they then short more on downticks to create fear in those who just bought or others who are long and are afraid of giving up the profit that they have. These shorts, who have no intention of holding their position overnight, are now in the process of closing out their positions with a pretty good profit (as much as a point or so). I would expect, with the selling drying up, they will lift the stock in order to close out the position before the close. This is what our markets are all about today. JMO.
Sad.
mcsharkey (and anyone interested) I've done some calculations, which I believe are conservative, of what we can expect for FY2016 revenues.
First, my estimate for 2015Q4 is $4.5M which comprises $2.8m for Pima and $1.7M for all other sources, I.e., Home Asset-Marking, 5 government agencies, labeling, etc. This will produce the Company's first profit, in the $.02-.03 p/s range. (Net of one-time expense for Vandalia).
Then, even though APDN's revenue has increased more than 50% per quarter for 3 quarters and apparently 100% for Q4, I have assumed a declining rate of quarterly increases. Say, 50% Q1, 40% Q2, 30%Q3, 20%Q4. This will produce 2016 revenues of about $44M! I strongly believe they will be much higher as recently announced deals ramp up and new deals are announced. Anyway, although quarterly expenses have been steady at around $4.0M, I have assumed $5.0M per quarter for 2016. This will net out at a net of $1.00 per share for 2016. (No taxes until the $220M NOL has been exhausted).
And, this is assuming no contribution from Pharma (our biggest opportunity!) Is my enthusiasm beginning to show??
pasta....Me too. I am not a big proponent of technical analysis, but I do look at support and resistance levels. IMO, first support is $7.70 (52 week high), the $6.60 (interim high). I think with the heightened interest in APDN, $7.70 will hold. If not, it could go to $6.60 which will not break the upward trend.
mcsharkey.... With the change of trading rules in the early part of this century, brokers and hedge funds are going to manipulate small companies (APDN) and take their pound of flesh on a daily basis. Nothing we can do about it. I would not expect anything from FINRA. Since Goldman and other biggies essentially control FINRA, complaints end up on the desk of the fox controlling the henhouse. It's a sad joke.
My two cents to all longs on this board: Don't sell this stock! 1) By selling, you aid and abet the manipulators by allowing them to cover their unborrowed short sales. 2) We are in the first inning of this game. 3) I expect a deal with a big Pharma before the end of the year. Stock will surge 50-100% on news. (Can't afford to be out). AMO.
McSharkey.. IMO, the shorts (i.e., the real shorts who borrow real shares) are way too early here and will actually be adding to the surge in APDN.
Thanks houtheman. That sheds some light, to me, on the fact that we do have significant other revenue, other than cotton. So, if Q3 was a total of $2.3 and cotton contributed $800,000 (20M x .04), then other revenue totaled $1.5M. Therefore if 70M were attributed to Q4, $2.8 would be the contribution from cotton in Q4. If there was no growth in the non-cotton sector, then it follows that Q4 would be a minimum of $4.3M (2.8 +1.5). This would be a Q-to-Q growth of about 80% and, it would be a break-even to slightly profitable quarter. JMO. Thanks again for the info.
mcharkey.....I am newer to APDN than you. Yes, we have no way of knowing at this time what the per-pound rate is. Also, I do not have any idea what the non-cotton initiatives are contributing to total revenues. However, looking at Q3 revs. of $2.3M and 20,000 pounds marked, the $.04 rate would imply $800,000 revenue for cotton. I believe that cotton-marking comprises the majority of revenues. Therefore it does seem that $.10 makes more sense. (I.e., in Q3 cotton revs. were $2M and not $800K). It will probably be a while before we find out. If ever.
apdn....Good read (thanks houtherman). Hope Eli is wrong about the $.04 per pound. Doesn't seem to jibe with what you and Mcsharkey have provided in your analyses. JMO.
And, Sharkey. Thank you for all the historic information. It's very helpful. I get the fear of delusion myself. Q4 could be a mind-blower. And it's just the beginning.
mcsharkey......I couldn't be more positive than I am about the prospects of APDN. Let me give you a little history about myself:
I have invested in public companies since I was 18 years old. (50 years).
The 20 years prior to retiring, in 2008, was spent as a broker/money manager. I have specialized in building portfolios of aggressive-growth companies such as APDN, for long-term capital appreciation. (i.e. NO TRADING). I invested in these companies alongside my clients. We have had multiple 10-20 baggers in that time span. And we had a couple of clunkers, losing 50-70% of that investment. It's easy to see that one 10 or 20 bagger can wipe out many 50% losers. Bottom line: the building of wealth can only be achieved through long-term capital gains. Anybody who thinks they can get rich trading, is fooling themselves and wasting time. The exceptions, of course, are hedge funds and broker-dealers who have had the trading rules changed so that they essentially don't lose. I doubt we have any of that type on this board.
So, I have to bite my tongue when I read, on this board, of rookie day-traders boasting how they sold APDN and made 25% or 40%, or whatever. It is a loser's game. This is the main reason I am not publicly pumped about the stock. I don't want to encourage any short-term players. Unless APDN fails to execute, I plan on holding this stock 2 to 5 years, and maybe more. With their P and L structure of zero-little cost of goods, this company has more leverage than any software company I have owned. In the interim, I will continue to buy as the story unfolds. Unlikely that I will sell any. GLTY.
apdn.....There is one cautionary note: In talking with IR at the company, it was my understanding that, with cotton, and other contracts, there is a yearly fee that may be adjusted upon renewal. So, we do not know for sure that the revenues generated on a quarterly basis are directly derived from the poundage produced during a given quarter. They probably are paid and reported quarter by quarter, but.....just saying.. We don't want to get overly excited until we see the actual numbers. (But it sure looks good!) AMO.
Wow. Did not see that. On the surface, this looks huge! Thanks.
apdn....IMO, $.10 per pound might be a little high. Of course, we don't know at this point what the magnitude of revenue is from other initiatives. And, I have not been able to determine how many pounds were marked through 3 quarters. However, with total expense run-rate of $4M +/-, you are right: we could be break-even or slightly profitable this quarter (Q4), (of course, net of the one-time cost of Vandalia). GLTA
apdn...Hope you're right. eom.
Buccos..I like your style. IMO, the home-asset marking initiative will not produce out-sized revenues. The cotton, plastics, labeling and container marking projects will produce good revenues. The absolute home run for APDN will be pharmaceutical marking. Last year in the U.S. alone, 4 billion prescriptions were filled. So, tens (if not hundreds) of billions of individual doses world-wide. Huge!
spaw....you'll be too late. They will announce a partnership with a major Pharma before they are profitable. What do think that will do to the stock?
Sure. You can do both. I am just speaking from almost 50 years of buying and holding this type of company. Have had several 15-20 baggers. Doesn't happen when your trading. When you consider that there are hedge funds that haven't lost money in 3 or 4 years, trading on a daily basis, and the fact that in every trade there is a winner and loser, you will never beat them. But, GLTY.
The price movement of the stock the last week or so, I hope, is a lesson for those caught in the fear and greed cycle, or those that mistakenly believe they can make money "trading" the stock. If one has done his homework and believes in APDN (or any other stock), save your time and money. Buy for the very long term. This company has a long way to go. IMO, if they execute, this will be home run-----a ten or twenty bagger. Trying to make that kind of money trading will never happen.
Understood. Along the topic of funds/ETFs, I don't know if APDN is in any ETFs, or just in traditional index mutual funds. Interestingly today, in both the NY Times and the WSJ, there are articles about how hedge funds use algorithms to game the ETF system. The "arbitrage" (i.e. manipulation) they use essentially takes advantage of the difference in value of an ETF and the individual values of the underlying components of the ETF (differences that they actually create themselves). This action can skew the price of any stock in the ETF on a short-term basis. IMO, this would be most apparent at the end of a quarter when rebalancing occurs. Just another way hedge funds and brokers milk the system to the detriment of the individual investor, and another reason for the promulgation of disintermediation.
pasta.....generally, when a company has achieved a market valuation that qualifies it to be included in an index, shares of the company are actually bought by the index 'fund". After joining the index, on a daily basis, the price of the stock does not necessarily track the price of the fund because the price of the fund is represented by the sum total of the current prices of all the stocks in the fund. (Some are up---some are down). Hope this helps.
Interesting timing. Last day of the quarter. Wonder if projected q3 revs. will increase.
JLH2...Thanks for that info. I believe the company is moving to a simpler fee-structure. For example, the cotton contracts are based on customer marking of product and produce yearly fees to APDN (I assume adjusted for increases in sales at time of renewal). Without a doubt, revenues from pharmaceutical applications would dwarf anything on APDN's plate. With all the recent publicity about counterfeit drugs and the accompanying enormous cost to our economy and society, adoption of DNA marking seems inevitable, perhaps imminent.
apdn1mill......Precisely what I figure. After 2 quarters, we should have a pretty good idea what kind of trajectory we are on.
JLH2...Not sure what you are talking about re: $.05 for bulk. What really has me fired up about this stock is this:
APND's cost of goods (at current manufacturing levels) is so insignificant that they are carried as $0.00 on the P and L. statement. Currently, total expenses (sg&a, interest, etc.) are about $4M per quarter. This means that every incremental dollar of revenue (above $4M) comes directly to the bottom line (because of large NOL, it will be a while before they pay meaningful taxes). Even fully taxed, about $0.65 of incremental revenue will come to the bottom line. I have only once, in my almost 50 years of investing and managing money, seen this kind of earnings leverage.
JLH2...Glad we are on the same page. Re: marking pharmaceuticals. They can go right to marking packages without any approvals, which would go a long way toward stemming the rampant drug counterfeiting that is going on world-wide. Individual dose marking might involve the FDA. But, approvals will not hang on the normal Phase 1-3 testing. It will be much simpler.
Let me (hopefully) put an end to this discussion: I spoke with IR yesterday. I was told they will be reporting on or around December 10, which squares with 70-75 days.
Now let's move on to why we own (or should own) this stock. GLTA.
ap.. Thanks for clarifying that.
First of all, APDN is on a September fiscal year. I.e., their Q4 (and fiscal year) ends today. They are a non-expedited reporting company. They must report either within 70 or 75 days after FY ends. For the other 3 quarters, it's either 40 or 45. If you need to know precisely, you can research it. The December quarter is their Q1 of the 2016 FY.
It is 70 days for yearend reporting. Earnings will be announced in early December. IMO, Q4 will be very close to break-even. (excluding the $1.5M expended for Vandalia). December (Q1) will be first profitable quarter, also excluding any one-time items. AMO.
The biggest risk for investors (and traders) of this stock is being out when you should be in. To date all of the deals announced comprise initial and yearly payments in the, say, $1-4M range. Does anyone have an idea what the initial and annual payments from a pharmaceutical partner will be?----neither do I. But, it will be at least an order of magnitude greater than anything to date. And, IMO, could happen in the very short term. When it does, these current prices will not be seen again. From what I have gathered, this company could be one of those rare, once-in-a-lifetime opportunities. Succumbing to the fear and greed cycle, will preclude making the kind of money that could change your life. AMO.
kbar...There is absolutely no way to determine whether the market cap is too high at this point. Everything depends upon the acceleration of growth, which will only be seen in the rearview mirror. As Dr. Hayward pointed out in yesterday's interview, the Company has grown quarterly revenues by 50% over the past 3 quarters. And he has said on numerous occasions that they are just beginning to "scratch the surface" of their potential markets. So if one were to assume continued 50% quarterly growth for FY16, APDN would have on the order of $40M in revenues which, in the current expense-structure would equate to just about $1.00 per share in pre-tax earnings. IMO, if these numbers are achieved, that would justify a stock price in the $20-25 range.
So, would you pay $5.25 per share today for a stock that could be $20-25 in a little over a year?? (BTW, I think the numbers could turn out to be considerably higher and sooner) AJMO.
http://www.thestreet.com/story/13303908/1/applied-dna-sciences-is-surging-in-antitheft-fraud-prevention-business.html?puc=yahoo&cm_ven=YAHOO
I particularly like the last quote about growing revenues over 50% , quarterly, over the past 3 quarters.
Guess that means we can expect at least 50% growth for Q4.
ap...How do you know it was "somebody else"??? Many times when an institution or other large investor is accumulating, they will sell small amounts, lower, to keep the price under control. (I.e., they have more to buy.)
Presumably the capital raise in March of $12.M is enough to carry the Company to profitability. If it is not, now would be a good time sell another 1.5-2M shares to make sure. IMO.
The company cannot be a buyer in the last 10 minutes so, I would say watch the last 10 minutes of trading to find out. MO
LTE..I totally agree. I believe they suspended buyback pending the ITC decision and are now back in.
OD... thanks for that info. IMO, if there is no settlement in the ITC case, I expect IDCC to come out next week with both barrels blazing in response to this ridiculous claim. Among other charges, I would expect a counter-suit to include collusion and/or tortious interference for MSFT's apparent involvement in the Asustek complaint.
amr.....The basis for my speculation is that certain events that are deemed to be significant can cause a company to suspend share repurchases. Examples could be the near-term prospect of: major settlement or licensing agreement, merger, buyout and others. I mentioned MSFT because I thought it would be the most likely given the "point of clarity", at the ITC, that is fast approaching. At this juncture, both sides have to weigh the ramifications of a loss vis-a-vis finding a reasonable solution to their disagreement. BM has expanded on this point in litigation proceedings numerous times. Other than the above examples, I can't think of another reason to suspend, what was, a very aggressive buyback program. (Doesn't mean there isn't one.) JMO.