IBI Market Insight: To Profit From Value Disconnect

Summary

In recent years, stellar breakthroughs such as CAR-T and gene therapies painted the bioscience landscape.

Previously limited by expertise, we're witnessing an increasing number of companies brewing gene-editing molecules.

Precision medicine therapeutics and companion diagnostics are powering the next wave of innovation.

Nonetheless, the China Trade War and drug pricing pressure lead bioscience stocks to exchange hands at a deep discount.

At the turn of the next market cycle, the long-term oriented investors will enjoy sizable profits.

I like the idea of using artificial intelligence because we're so short of the real thing. - Charlie Munger

I hope that you guys had a great weekend. Asides from doing light tasks like posting on my social media, I shifted away from work during the weekend. In my view, it's best to conduct investment research and news analysis during weekdays. As family and God are matters of the heart, they should at least have the weekend. I believe it's more healthy and balance for you to reserve the weekend to rejuvenate and improve other arenas of life. After all, there is more to life than investing. And, the investment process is not a sprint. It's a marathon so pace yourself accordingly.

Figure 1: Charlie Munger and Warren Buffett (Source: Robyn Twomey)

That being said, I'd like to kick off the week with another series coined Market Insight. This publication is similar to the Industry Trends analysis that I conducted from time to time. Despite the resemblance, there are significant differences. Specifically, Market Insight explores current affairs that are driving broader market behaviors. Aside from providing you with the intelligence affecting your investment value, Market Insights offers various strategies to help you capitalize gains and minimize losses.

IBI Top Picks For Summer 2019 Part II: Which Bioscience Stock Will Sit On The Iron Throne?

Summary

Last weekend, I featured Part I of the Top Picks for Summer 2019. I'll finish up this series by presenting four more growth companies.

As a leader in the non-alcoholic steatohepatitis space, Madrigal is most likely to deliver strong advance data and thereby takes its crown as the undisputed champion in the $25B market.

To honor of my Father, I'm giving out a 50% discount gift to new members this weekend in advance of next week's Father's Day.

One thing that could help would be to write down the reason you are buying a stock before your purchase. Force yourself to write this down. It clarifies your mind and discipline. - Warren Buffett

Author's note: In honor of my Father, I'm offering new subscribers a 50% discount gift in advance of next weekend's Father's Day. Send me a message if you wish to receive yours.

In Part I of my Top Picks For Summer 2019, I featured four powerful bioscience growth equities. To complete this summer expedition, I recently came out of the jungle of bioscience equities to deliver to you four more intriguing investment leads. In my view, they are low hanging fruits that can catapult your portfolio to the new high, provided that you hold them for the next several years. In my view, the most outsized returns arise from long-term investing.

If you take equity investment similar to buying a house, it'll make much more sense. One cannot expect to flip a house overnight for the most gargantuan profit. A house needs years to appreciate multiple folds. From the fundamental paradigm, equity investment works pretty much the same way. Time is simply a requisite for a growth business to unlock its full potential. Buffett said it best: "You can't produce a baby in one month by getting nine women pregnant."

My view is in line with the Oracle of Omaha, Buffett. Nevertheless, I believe that you can still bank short-term profits in bioscience. This occurs in situations known as "binary events" like an FDA approval or clinical data reporting. Nonetheless, one needs to have expert forecasting skills to have an edge over the market. Armed with all the arsenals, it's still quite risky. Moreover, the returns are not outsized as in ultra-long-term holding to make investing worthwhile.

IBI Notable Community Discussion: The Best Is Yet To Come

Summary

Bioscience stocks commenced the week on a rally with the momentum building stronger toward the weekend. Nektar, Portola, Sesen, and especially Regenxbio are trading northbound.

Packing heavy punches, Sesen Bio is knocking market bears toward an approval. Due to the robust VISTA outcomes, Vicinium will ultimately replace Valstar as the standard of care.

In readying for an upcoming approval of NKTR-181, Nektar formed the new subsidiary Inheris. It'll ensure a robust launch for NKTR-181, the silver bullet for the prescription opioid abuse epidemic.

Special thanks of all Integrated BioSci Investing members who participated in our daily discussion. I'm grateful for your intellectual generosity.

In honoring our troops who sacrificed their lives for our freedom, I'm offering a time-limited 50% discounts to new members. Message me if you wish to get your Memorial Day weekend gift.

You only have to do very few things right in your life so long as you don't do too many things wrong. - Warren Buffett

For the Memorial Day weekend, I'll feature another Integrated BioSci Investing Notable Community Discussion ("NCD"). This series is born out of my quest to continually improve the service for our community. As follow, an NCD fills in the gap for members who are unable to join the daily chat due to work and other obligations. As such, present pertinent highlights that we discussed during the week.

On Tuesday, May 21st, Flamman initiated an excellent discussion. As the market traded lower, the opportunistic investor Flamman - at least that's how I viewed him - prudently picked up shares in some key companies. Some of his purchases included the red hot Sesen Bio (SESN), Nektar Therapeutics(NKTR), and Omeros Corporation (OMER). Of note, I recently published updates on both Sesen and Nektar. You should definitely check out those research if you haven't done so. My trading analytics suggest that the momentum is building in Sesen, Nektar, Omer, and Regenxbio. These stocks have been trading on an uptrend earlier in the week.

Figure 1: Notable IBI stocks (Source: Yahoo Finance)