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R59- GERN
Re, do you think the Oncology Advisory Committee is impartial ?
Updated portfolio
SOXS 9928.88
GERN 70000
PRIM 3375.86
Buy SOXS @ $4.12
Buy 9928.88 SOXS @ $4.12 = $40907
BTuna- my study on holding into earnings from 2014
shows that holding into earnings in the best of times, is a wash(50/50). That is, you overall lose the same % you make at the close of the session immediately after earnings are announced. so here's my take. If BELFB is a short term play, holding into earnings is a bad idea. On the other hand, if you plan to hold BELFB long term no matter what the earnings are, or guidance, then no problem holding. I rarely hold into earnings, as I'm a trader, and almost 100% of my profits are made intra quarter. So why would you take a 50/50 shot, if you feel you have the best of it by trading outside earnings day.
SMCI from $300 to $800 in 3 weeks !
Unreal
Updated portfolio
Cash $40907
GERN 70000 shares
PRIM 3375.86 shares
Sell GEOS @ $12
Sell 3408.90 GEOS @ $12 = $40907
GERN- March 14 super important date
The oncology advisory committee gives the FDA their opinion on GERNs drug Imetelstat on March 14. If yea, then 97% of the time, the drug gets FDA approval. If nea, then 33% of the time the drug gets FDA approval Being that the stock has been cut in half over the last year, while Institutions have been loading makes things even more interesting. Wadegarret has about 40% of the portfolio in GERN.
PERI- just looked at the 6K
Seems as long as the MSFT deal is extended, as SS pointed out, the stock is cheap here. Balance sheet looks good to me. However I do understand the disappointment on Feb 7, as not only did 2024 revenue estimates come in from $890 to $870, but so did EBIDTA estimates as a % of revenues, from 23% in 2023 to 21% expected in 2024. Still it seems revenues will grow by 17%, and EBITDA by 6%. So my eps estimate based on that is around $3.60 for 2024, which is 8% eps growth. Now the question is, with the slow down in growth, what PE should we now attach going forward ? Mind you, in hindsight, it was selling for a 9 PE on 2023 eps when the stock was at $30 right before the report.
SS- PERI
When are we expected to hear of the MSFT deal being extended ? How much of their revenues come from MSFT ? thanks
Even if S&P earnings growth is 10%-12% in 2024, PEs going
forward are still stretched. So in 2023, S&P earnings are to come in around $220, and for 2024, lets say $246. If that ends up being the case, then the market is now selling for a 20.5 PE going forward. If historic PEs are 16 times, then that would be 28% higher than normal. Now I ask myself, what is out there that could propel earnings enough to support a 20-21 PE in the S&P. The only thing IMO is AI- that is the additional productivity that will come from it. However the only thing I've heard is that AI might add 3% earnings growth to companies over the next 10 years. Now that's a far cry from 28% higher valuations, which is one of the reasons I'm negative on this market. Another concern is consumer debt levels(credit card), and delinquencies, as well as whether inflation can really come down to 2%. Another, although technical, is the inverted yield curve, which has been a staunch predictor of recession for 70 years, being right 100% of the time, 7 out of 7. The yield curve predictor states, after the 2 and 10 year treasuries are inverted, a recession will happen within 24 months. Today, the yield curve has been inverted for about 20-21 months, so by April or May a recession is being predicted.
Now I realize that no one can time the market, but what one can know is, when the market is cheap or expensive for the expected growth going forward. Right now, I'd say the market is at least 20% over valued, even if there would be 10% eps growth in 2024. This, along with the fact that we can lock in around 5% for 5 years or more on fixed income, where there is zero risk.
Lastly I want to give a historic market technical, that in and of itself, spooks me about having much in this market. That is, over the last 120 years or so, every single time the major indexes go up 500% or more from any given point, there soon(within a year or two at most) is a correction of around 50%. If anyone looks at March 2009 till now, they can see we have that 500%+ in the Dow and S&P, and 1300%+ in the Nasdaq !
Wadegarret portfolio- up 7% YTD, up 180% since Jan 2022
Hweb, thanks
Hweb, GEOS
Surprised more on this board aren't taking a shot, after a 30% sell off for little reason. I mean yes, the huge Dec qtr won't be repeated too often, but in their CC call, they said that business is strong, and that growth is increasing still, especially in the sector they had the $30M contract in. In that case, then one has to figure they could continue at least at the Sept qtr levels of around $.33/qtr. Also, one has to figure, even though qtrs are lumpy, that the huge Dec qtr, shows that GEOS will likely have more huge qtrs once in a while. Even if it's once a year, then I see around $1.50 at a minimum going forward. Therefore it seems to me, this sell off should be bought
GEOS said in their CC, that business is growing, not
going down. This sell off is over done, just like AI stocks are over done. Even if GEOS makes the same $.33 as they made in the Sept qtr, they would still make $1.30+. The stock has carried a 10 PE going forward, so it seems to me, buying in the $11s, should at least mean 15% upside, even to super conservative valuation.
GEOS, just bought back @ $11.69
I mean I understand they won't do $.94 every qtr, but sending it down 30% is crazy. I mean give it a 12 PE just on the one great qtr, and assume zero the rest, and that's the current stock price ! This sell off has been overdone, and I feel around $14-$15 is fair value.
Updated portfolio
PRIM 3375,86
GEOS 3408.90
GERN 70000 shares
Buy GEOS $11.69
Buy 3408.90 GEOS @ $11.69 = $39850
This market is one tough cookie !
About even on Wadegarret so far this year, and trying to make out in the market is like pulling teeth ! I mean are we supposed to chase the Fab 4 or SMCI ? I am going to go all out short again soon, and will announce when I do. I hate this market ! ARM goes up 56% and has a 150 PE going forward ? SNOW continues to go up, despite nearly a 200 PE going forward ! Lets see what else we can chase. RXRX goes up 150% on the potential for their AI software, but GERN awaiting FDA approval for a multi billion dollar potential drug, gets cut in half ! PRIM, which has a 12 PE going forward with 24% eps growth going forward(and pays a dividend) can hardly move, but STRL in the same exact sector with 13% expected growth and a 17 PE going forward hits new all time highs every other day ! This market will take to the cake on the most irrational since late 1999 to early 2000.
Updated portfolio
GERN 70000 shares
Cash $39850
PRIM 3375.86 shares
Buy GERN @ $1.92
Buy 20000 GERN @ $1.92 = $38400
Nelson GEOS CC was unimpressive & I sold
in Wadegarret just in time ! Thing is, no catalysts near term, so likely $.30-$.35 /qtr at best for now. PE has been around 10-12, so dead money for a bit IMO.
Sell GEOS @ $15.65
Sell 5000 GEOS @ $15.65 = $78250
This market has me spooked
I mean you can't chase the AI stocks IMO anymore, and few stocks are acting healthy in general, outside earnings day. So we have MSFT, AMZN, NFLX, GOOG, META to keep chasing ?
GEOS says the trend is for higher revenues and earnings,
despite the lumpiness of given quarters ie the Dec qtr of $50M and $.94...
"Analysis and Outlook
The company's performance in the first quarter of fiscal year 2024 suggests a positive outlook, with a strong emphasis on profitability and disciplined financial management. The significant increase in revenue and net income demonstrates Geospace's ability to capitalize on market demand for its innovative products. However, the management's cautious tone regarding future sales volatility indicates that while the company is on a solid path, it must continue to navigate the cyclical nature of the oil and gas industry."
R59- GEOS
Yes, I understand. So how would you value the stock ? what do you think it does tomorrow ? CC tomorrow morning by the way
GEOS knocks it out of the park !
$.94 for the qtr ! https://finance.yahoo.com/news/geospace-technologies-corporation-reports-profitable-214500950.html
GEOS out with Q4, tomorrow after the bell
I like the chances for the stock to go higher. They have a $30M contract, in which most of will be realized in Q4. I think they come in with $.40-$.45 in eps for the quarter. c
R59- GERN
A good way to play the stock from here. We know that March 14 is the Oncology Advisory Committee meeting. Here is an article from JAMA that gives stats. That is, when the Avisory Committee suggests approval, it gets FDA approval 97%. When the board suggests no approval, then the FDA approves only 33% of the time. https://jamanetwork.com/journals/jama-health-forum/fullarticle/2807051
Based on this, one might want to buy GERN here, especially under $2. I mean the stock has been hit 50% over the last year, and on no bad news, and in fact, with record Institutional Ownership as of Sept 30, 2023. At $1.89, the stock is a great hold into the Advisory Committee meeting only 5 weeks away. The way I see it is, either Blackrock and Vanguard are plain ignorant, or someone is manipulating the stock. Point is, unless the Advisory Committee gets paid off, chances are GERN gets recommendation of approval, and goes up 50%+ on the news. On the other hand, if the Advisory Board says no, then the drug still has a 1/3 chance of approval.
Update portfolio
GERN 50000
GEOS 5000
PRIM 3375.86 shares
Buy PRIM @ $35.96/Sell SQQQ @ $11.90
Sell 10201.35 SQQQ @ $11.90 = $121,396
Buy 3375.86 PRIM @ $35.96 = $121,396
Update portfolio
GERN 50000 shares
GEOS 5000
SQQQ 10201.35 shares
Buy GERN @ $1.88/Sell SQQQ @ $11.88
Buy 10000 GERN @ $1.88 = $18,800
Sell 1582.49 SQQQ @ $11.88 = $18,800
Hweb, good points
However I don't think AI is as strong as the Internet boom. I mean I remember when my brokerage had a line of people to lay down their bets in Jan 2000, that went out the door. A friend of mine was calling me all during late 1999 to early 2000, saying he turned a couple hundred thousand in well over a million ! The same guy said he went broke a year later ! Your point though is well taken. I mean no one can time the top, and there surely is a lot of excitement still with AI. However I am taking the shot of being in the SQQQ right now @ $11.86, as I bought yesterday. I am betting this market will correct soon, but I was wrong all last year, so who knows. Hweb, I was quite successful shorting in 2018, 2020, and 2022. So now back to an even year again- ha !
Updated portfolio
GEOS 5000 shares
SQQQ 11783.84
GERN 40000 shares
Buy GEOS $15.90/Sell SQQQ @ $11.88
Buy 5000 GEOS @ $15.90 = $79,500
Sell 6691.92 SQQQ @ $11.88 = $79,500
Every expert says markets max up 8%-10% this year
So if the market is already up 5% this year, how much more upside ? That's one reason I firmly believe shorting some index at least for a hedge is appropriate. The other reason is, these markets haven't corrected more than 2%-3% in months ! I don't know how long that can keep going, but I wouldn't want to be betting on it continuing.
Making a call tonight on SMCI and NVDA
I believe $700 will be the top for both of these for some time. NVDA was $702 ah, and SMCI $684. Tomorrow SMCI will likely break $700, but I think that will be it. Lets see what happens. Also with those tops, I believe the Nasdaq tops out- at around 15600-15700. This market has been parabolic, and the only other time I've seen this was in 2000. I don't think anyone knows how much productivity AI will bring, nor how much in profits, and the only reason for the high valuations is for lofty AI expectations. Time will tell, but I think companies already have AI potential baked in and more, and that this euphoric stock chasing in companies like SMCI, NVDA, AMD, etc, will end soon.
Value- SMCI vs AAOI
No doubt SMCI is a finer company- no comparison. I owned both when valuation was good. SMCI was a hard luck story for me for sure. I mean I believe you should keep a stock for at least several weeks after a good report, and I did just that with SMCI after their Sept 2022 quarterly report. I was walking in a certain park every day last year around 8 AM- 9 AM, and walked for an hour or so. Every day I owned SMCI, I just couldn't figure out why it wouldn't move. I mean $70 to $79 back and forth a dozen times during the 8-10 weeks I owned it. I finally got frustrated, and with good reason. However who knew AI would hit the way it did. At the time, SMCI had an 8 PE. How was I to know it would skip to a 15 PE overnight, and then to a 24 PE going forward, after years under a 10 PE !
Point is though, I play almost any stock with halfway decent liquidity, that looks well undervalued. However SMCI is no longer under valued IMO, unless one wants to just keep yanking up the valuation. However I find when that happens, it gets much more risky to own the stock, as there's always competition, and super growth in a new technology only lasts so long in general. Another stock that mimicked SMCI for me was TTD, which I brought up to the board at $69 a few years ago, but I had no idea how to value it, and I no response at the time from anyone on the board. I had around 7000 shares of that one as well, and it went to over $1000 over the next 18 months ! I guess we all have our stories.
Can SMCI keep going up $80-$100/day for much longer ?
Maybe the stock hits $1000 later this week yet ! sheesh !