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elindholm

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I thought it might be fun to have a thread about lower-profile stocks that we've stumbled onto. Maybe we can help each other find a big upswing before it happens. Here are my first two contributions, both of which hit the market recently, although if you find something that's been on the board forever and has been neglected, that's great too.

OGN Organon. This is the spin-off from Merck Pharmeceuticals that's going to focus on women's health and established drugs, leaving most of the research and development side still under the Merck name. It started trading on May 24. The plan is for ORG to pay a dividend sooner rather than later, but whether it would approach MRK's 3.4% hasn't been discussed (that I've found). Since it's not really a new company, it doesn't figure to be a candidate for explosive growth, but it should be a safe opportunity for modest performance. It closed today (June 25) at 30.19 and its price targets range from 33 to 48. I bought it at 29.02.

KNBE KnowBe4. This company sells "security awareness" software and training, i.e. helping businesses help their employess not to fall for scams or otherwise get hacked. They were founded in 2010 and went public last April 22. It surged in the middle of June and has taken a breather this week, but I see it as a long-term play. I got it at 18.07 and it's at 33.26.

Other contributions welcomed!
 
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Devilmaycare

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There's two that I'm playing with like this:

IPOF: I've mentioned it before in the market thread. It's Chamath's SPAC with the most money to merge. I've been parking money in since it's stock is trading just above NAV at $10.16 today, warrants have been hovering around $2. Depending on who he closes a deal with it could easily go 2 to 3x or more. There's been rumors Equinox and Impossible Foods as the merger targets but speculation and rumor at this point since he legally can't comment.

GSAT: Trading right now at $1.88. They're a satellite company but it's really a 5G play. Back in about February Qualcomm announced support in their new cell modem for the spectrum they own. I jumped on a few thousand shares at the time when it was trading at about 1.10. So I'm already happy but it could take off even more. There's a possible squeeze coming, there's only about 150m shares available (out of 628.58m) with about 7% shorted. It's a low percentage but that is almost 1/3 of the available shares. It's been getting mentioned on WSB too.

There's also the possibility of them being bought for the spectrum that they own. There was a good DD post on WSB a few months back that went over it. I can try to find it again if there's interest.
 
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elindholm

elindholm

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It looks like GSAT has that midstream kind of role as with fossil fuels or, in a way, REITs. I like companies like that because they benefit from the broader industry even though they aren't a name on most people's minds. I'd be more into midstream fossil fuels except that I'm trying to be slightly in the ESG direction, so I generally avoid the worst sin stocks. (DuPont is probably my most evil holding.) I thought one of my tech funds might own GSAT, but it looks like they don't. Intriguing!

For IPOF, what does "warrants at $2" mean? I know very little about SPACs.
 

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SLS. They've got some promising cancer treatments in late stage trials with the FDA, and earlier in the year they were being subjected to some of the same short games as GME and AMC.

I'm up 22% YTD, but this is a long-term hold for me. If their treatments pan out the way it's looking, this could be another Pfizer in 10-20 years.
 

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There is a lot of hype around EVs, particularly lithium ion powered EVs replacing gasoline engines, but I don't think that technology is a solution for trucking and heavy equipment as the batteries lack energy density for long ranges under heavy load and take far too long to charge for continuous use.

I'm really interested in fuel cell EVs (FCEVs), hydrogen in particular. They aren't getting the same hype as EVs, especially TSLA, but I think the technology has huge upside.

Lots of players like PLUG and NKLA that have gotten hyped recently and are/were quite pricey. Some safer plays that are working on hydrogen projects are DOW Cummins (CMI), and DuPont (DD).

I'm not convinced of any one company coming out on top and there seems to be a bit of collaboration between companies. So I'm looking into a couple of recently launched ETFs that invest hydrogen fuel cell related companies. HJEN and HDRO. They have similar holdings with PLUG being their largest holding at around 9-10%

Anybody have thoughts on the industry/technology or specific companies?
 
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elindholm

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There is a lot of hype around EVs, particularly lithium ion powered EVs replacing gasoline engines, but I don't think that technology is a solution for trucking and heavy equipment as the batteries lack energy density for long ranges under heavy load and take far too long to charge for continuous use.

I'm really interested in fuel cell EVs (FCEL), hydrogen in particular. They aren't getting the same hype as EVs, especially TSLA, but I think the technology has huge upside.

Lots of players like PLUG and NKLA that have gotten hyped recently and are/were quite pricey. Some safer plays that are working on hydrogen projects are DOW Cummins (CMI), and DuPont (DD).

I'm not convinced of any one company coming out on top and there seems to be a bit of collaboration between companies. So I'm looking into a couple of recently launched ETFs that invest hydrogen fuel cell related companies. HJEN and HDRO. They have similar holdings with PLUG being their largest holding at around 9-10%

Anybody have thoughts on the industry/technology or specific companies?

I'm also curious about lithium but reluctant to commit to any one company. I hold the LIT ETF, which Morningstar rates very poorly, but which is nonetheless performing pretty well (+127% in 2020, +15% YTD). Generally I put a lot of faith in Morningstar, but once in a while their analysis seems too prejudicial in the face of the demonstrated performance.

Hydrogen fuel cells feel very speculative at this point. With my time frame being 8-10 years, I'm trying to steer away from plays that are very long-term. What I like about lithium is that it's firmly established as a resource with broad applications, so if a particular use (e.g. car batteries) ends up being a dead end, there's still going to be lots of demand for it elsewhere.
 

Devilmaycare

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For IPOF, what does "warrants at $2" mean? I know very little about SPACs.

SPACs when they're created actually come out as Units which is usually 1 common stock and 1/5 of a warrant. Shortly after they're out you can split the unit to separate them and then they trade under their own symbol like regular socks. So for like IPOF you can buy/sell IPOF, IPOF.u, and IPOF.ws (the naming can be slightly different depending on broker, like vanguard is IPOF_T for warrants).

The warrants then trade like regular stock. They're different though in that you don't own stock, you own the right to buy stock. They're sort of like options. At some point after the merger you can convert 1 warrant to 1 common stock for $11.50. When that happens varies. It's usually written something like 30 days to 2 years after merger completion with the company having the right to call for the conversion anytime after the 30 days.

Warrants are also not "protected" like common stock with SPACs. If the SPAC never closes a deal in it's lifetime (it only has a few years to make one) then the SPAC is dissolved and its trust is giving back back to at $10/share. The warrants become worthless at that point.

So buying warrants over stock can have a couple benefits depending on your strategy. They defer part of the cost further down the road if you're long on the target. I have some CCIV warrants for this reason. You can also make a little extra profit if the difference in price between the stock and warrant is greater than $11.50.

That's not the case though right now with IPOF, it's negative. For it I'm looking at the warrants as short term (the stock might be long depending on the deal) and I'm hoping to get a better multiplier on them over the stock. When the prices aren't so close to NAV there's usually like a buck or so difference in between the stock and the warrant+conversion. Like CCIV is at about $1.30 right now. So hypothetically if the stock goes to $20 on announcement the warrants should be in like the $7-8 range. That would give ~2x for the stock, but ~3.5x for warrants.

FYI, the SPAC numbers of $10 NAV, $11.50 to convert, etc. are the typical numbers. You'll see some that vary a bit. Like PSTH had a $20 NAV.
 
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elindholm

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SPACs when they're created actually come out as Units which is usually 1 common stock and 1/5 of a warrant. Shortly after they're out you can split the unit to separate them and then they trade under their own symbol like regular socks. So for like IPOF you can buy/sell IPOF, IPOF.u, and IPOF.ws (the naming can be slightly different depending on broker, like vanguard is IPOF_T for warrants)....

Wow, thanks for all of this. Something to read and refer back to multiple times.
 

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IMO, if EV semi trucks can get over 500 mile range, they will do just fine. That's 4 thirty minute stops to fuel up from arizona to new york. Although, for now, I think EV semi trucking is focused on local delivery within states vs cross country.
 

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IMO, if EV semi trucks can get over 500 mile range, they will do just fine. That's 4 thirty minute stops to fuel up from arizona to new york. Although, for now, I think EV semi trucking is focused on local delivery within states vs cross country.

You think a 30 minute fill up for a fully loaded big rig to get a 500 miles is on the horizon? We're not talking about charging up a Model X.
 

BigRedRage

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You think a 30 minute fill up for a fully loaded big rig to get a 500 miles is on the horizon? We're not talking about charging up a Model X.
Maybe not. I don't know. Even if it was an hour, it is after 7 hours of straight driving at 70mph. Taking an hour break before the next 7 hours doesn't seem unreasonable to me either, especially with all the other savings vs running a diesel engine over the same trek. I wouldnt be surprised is the mileage is higher due to the size of battery pack that could be put into the chassis of a semi either.

I read a recent article about an EV semi actually getting the job done faster than a diesel semi in recent tests but I cannot locate it right now, potentially because of the word Semi. Different parts of the country call them different things.

Also though, I still do think the EV semi market is focused on regional and in state semi jobs vs over the road and to my memory, regional and in state trucking is a larger % than cross country trucking.
Nevada to AZ. AZ to CA, etc.
 
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Folster

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Where are you guys with gold and gold miners? I am not a gold bug, but I am bullish mainly due to inflation.

I have a small mid-term position in IAU, a gold price tracking ETF. I'm looking at miners like NEM and GOLD as well. They seem to be undervalued right now with big jumps in revenue over the last year or so. I think crypto has suppressed gold prices to some extent, but we are seeing the extreme volatility in crypto coupled with increasing inflation concerns that could be a catalyst for a sizeable upward movement in gold. My big stumbling block with gold is that it has no real industrial use so it's value beyond jewelry is just perception.

When it comes to metals, I'd like to be in copper right now, but it has gotten swept up in the EV and electrification hype and seems a bit too pricey right now for my liking and I don't want to chase it.
 

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SLS. They've got some promising cancer treatments in late stage trials with the FDA, and earlier in the year they were being subjected to some of the same short games as GME and AMC.

I'm up 22% YTD, but this is a long-term hold for me. If their treatments pan out the way it's looking, this could be another Pfizer in 10-20 years.

So I looked at SLS and they have very little in the way of financials to examine so this is just a speculative bet on their drugs/treatments in process. I took a look at their 10K that was filed in March and got the following info that may be useful to some.

https://sec.report/Document/0001390478-21-000007/#iabdd3f481a7445ebbd19135861283b8e_16

ITEM 1. BUSINESS
Overview
We are a late-stage clinical biopharmaceutical company focused on developing novel cancer immunotherapeutics for a broad range of cancer indications. Our product candidates currently include galinpepimut-S and nelipepimut-S.

Galinpepimut-S, or GPS

Our lead product candidate, galinpepimut-S, or GPS, is a cancer immunotherapeutic agent licensed from Memorial Sloan Kettering Cancer Center, or MSK, that targets the Wilms tumor 1, or WT1, protein, which is present in 20 or more cancer types. Based on its mechanism of action as a directly immunizing agent, GPS has potential as a monotherapy or in combination with other immunotherapeutic agents to address a broad spectrum of hematologic, or blood, cancers and solid tumor indications.
In January 2020, we commenced in the United States a Phase 3 clinical trial, the REGAL study, for GPS monotherapy in patients with acute myeloid leukemia, or AML, in the maintenance setting after achievement of second complete remission, or CRem2, following successful completion of second-line antileukemic therapy. We expect this study will be used as the basis for submission of a Biologics License Application, or BLA, subject to a statistically significant and clinically meaningful data outcome and agreement with the U.S. Food & Drug Administration, or the FDA. In the second half of 2020, we received approval from each of the French and German regulatory authorities to advance the REGAL study in France and Germany, respectively. We expect approvals from additional European health authorities in early 2021 which will allow us to expand AML patient enrollment for the REGAL study in Europe. We plan to enroll approximately 116 patients at up to approximately 135 clinical sites primarily in the United States and Europe with a planned interim safety and futility analysis after 80 events (deaths) which we anticipate will take place in the first half of 2022, provided that the ongoing COVID-19 pandemic does not significantly adversely impact our projected timeline for enrollment.
In December 2020, we entered into an exclusive license agreement with 3D Medicines Inc., a China-based biopharmaceutical company developing next-generation immuno-oncology drugs, for the development and commercialization of GPS, as well as the Company’s next generation heptavalent immunotherapeutic GPS+, which is at preclinical stage, across all therapeutic and diagnostic uses in the Greater China territory (mainland China, Hong Kong, Macau and Taiwan). We have retained sole rights to GPS and GPS+ outside of the Greater China area.
In December 2018, pursuant to a Clinical Trial Collaboration and Supply Agreement, we initiated a Phase 1/2 multi-arm "basket" type clinical study of GPS in combination with Merck & Co., Inc.’s anti-PD-1 therapy, Keytruda® (pembrolizumab). The tumor type currently being studied is ovarian cancer (second or third line). We reported initial data from this study in December 2020 and we expect to report further clinical and immunobiological data by the end of the first half of 2021. We, together with Merck, have determined not to pursue the following indications as part of the basket study: colorectal cancer, triple negative breast cancer, small cell lung cancer, or SCLC, or AML, and we are exploring other additional potential indications to investigate in the study.
In February 2020, a Phase I open-label investigator-sponsored clinical trial of GPS, in combination with Bristol-Myers Squibb’s anti-PD-1 therapy, nivolumab (Opdivo®), in patients with malignant pleural mesothelioma, or MPM, who harbor relapsed or refractory disease after having received frontline standard of care multimodality therapy was commenced at MSK. In December 2020, we announced initial data from this study and we expect to report further clinical and immunobiological data by the end of the first half of 2021.
GPS was granted Orphan Drug Product Designations from the FDA, as well as Orphan Medicinal Product Designations from the European Medicines Agency, or EMA, for GPS in AML, MPM, and multiple myeloma, or MM, as well as Fast Track Designation for AML, MPM, and MM from the FDA.
4

Nelipepimut-S or NPS
Nelipepimut-S, or NPS, is a cancer immunotherapy targeting the human epidermal growth factor receptor 2, or HER2, expressing cancers. Data presented in 2018 from a Phase 2b clinical trial of the combination of trastuzumab (Herceptin®) plus NPS in HER2 low expressing (1+ or 2+ per immunohistochemistry, or IHC) breast cancer patients in the adjuvant setting to prevent recurrences showed a clinically and statistically significant improvement in the disease-free survival, or DFS, rate for the TNBC cohort at 24 months for patients treated with NPS plus trastuzumab of 92.6% compared to 70.2% for those treated with trastuzumab alone. Following discussions with the FDA and based upon written feedback from the FDA and on the totality of clinical, safety and translational NPS data to date, we have finalized the design and plan for a Phase 3 registration-enabling study of NPS in combination with trastuzumab for the treatment of patients with TNBC in the adjuvant setting after standard treatment. If successful, we believe this study may be considered as the basis for a BLA submission to the FDA. We are seeking out-licensing opportunities to fund and conduct the future clinical development of NPS in order to maximize the potential of the program and we do not plan to conduct and fund a Phase 3 program for NPS on our own.
FBP-targeting bivalent vaccine (GALE-301/-302)
In order to prioritize development of our core assets, we determined to cease development of GALE-301 and GALE-302, cancer immunotherapies that target the E39 peptide derived from the folate binding protein, or FBP, which were licensed in from The Henry M. Jackson Foundation, or HJF, and the MD Anderson Cancer Center, or MDACC. We entered into a Termination Agreement with HJF and MDACC in February 2021.
The chart below summarizes the current status of our clinical development pipeline:
 

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Okay guys!

The Nasdaq is down over 30% and the S&P 500 is down 18%. What companies do you like that appear to be on sale?

DIS and GOOG are two that I have long term interest in that are near my price targets. I would be adding to an existing position with GOOG.

Obligatory: You can't go wrong with broad market indexes and as I have stated before I prefer S&P indexes for the US market as they screen out unprofitable trash companies. I will be dropping a nice chunk in to SPTM if the S&P 500 hits -20%.
 

Devilmaycare

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Okay guys!

The Nasdaq is down over 30% and the S&P 500 is down 18%. What companies do you like that appear to be on sale?

DIS and GOOG are two that I have long term interest in that are near my price targets. I would be adding to an existing position with GOOG.

Obligatory: You can't go wrong with broad market indexes and as I have stated before I prefer S&P indexes for the US market as they screen out unprofitable trash companies. I will be dropping a nice chunk in to SPTM if the S&P 500 hits -20%.
Right now my thought is sell everything and buy SPACs that are sitting at NAV to ride this out. Maybe one will close and you'll get a good pop. I'm half joking with this but the thought did cross my mind.
 
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elindholm

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Every buy I've made recently has been wrong, of course, since the market goes down basically every day. But I'm fairly confident in my two most recent acquisitions, WU and DPZ, being able to stabilize.

As for DIS, I still prefer PARA, and I'm not going to hold both.

In case anyone is curious, I dumped PACK at a 43% loss yesterday. I have other stocks that are doing just as poorly, but that one seemed to offer the dimmest chance of rebounding any time soon.
 
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elindholm

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AMZN is a bit out of my ethical comfort zone, but it sure looks tempting at its current price point.
 

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JPM and SCHW are two industry leading financial companies I'm looking at. They are down near at their 52 week lows, but I haven't established a target price for either yet.
 
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elindholm

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JPM and SCHW are two industry leading financial companies I'm looking at. They are down near at their 52 week lows, but I haven't established a target price for either yet.
I'd forgotten about JPM. Had my eye on them for a while. It was approaching 140 before the pandemic, so it probably has some upside over its current 118. I've learned (too late) not to pay much attention to post-pandemic highs.

As for SCHW, their whole "We're a fiduciary" advertising angle feels off-target to me. What I'd want to know is, are you going to get the job done or not? The chart below also makes me think they have quite a bit farther to fall if the market in general continues to struggle.

JPM is intriguing, though -- I'll look into it some more.


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elindholm

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JPM and SCHW are two industry leading financial companies I'm looking at. They are down near at their 52 week lows, but I haven't established a target price for either yet.

By the way this could be a good opportunity for an etf play. Check out VFH (which I already hold) and IYG (which has a slightly different focus).
 

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By the way this could be a good opportunity for an etf play. Check out VFH (which I already hold) and IYG (which has a slightly different focus).

Yeah, I'm holding XLF. It's a little more concentrated with its top 10 holdings equaling 55% and it has nearly 13% in BRK.B. Same 0.10% expense. I imagine returns are comparable. I just wanted more BRK.B and JPM exposure when I bought it.
 
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elindholm

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Yeah, I'm holding XLF. It's a little more concentrated with its top 10 holdings equaling 55% and it has nearly 13% in BRK.B. Same 0.10% expense. I imagine returns are comparable. I just wanted more BRK.B and JPM exposure when I bought it.
That's kind of funny, because BRK.B is for all practical purposes an etf itself.
 

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That's kind of funny, because BRK.B is for all practical purposes an etf itself.
IYG is interesting that it includes Visa and Mastercard. I never understood why those two were in info tech.
 
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elindholm

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IYG is interesting that it includes Visa and Mastercard. I never understood why those two were in info tech.

Morningstar has them in Financials. One of these days I'll have to track down what the different sorting conventions are and who follows which. I learned yesterday that DIS and PARA are considered Consumer Cyclical by some; Morningstar has them in Communications. I've based all of my balancing on Morningstar (who copies ... someone?), so I'll stick with that.
 

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Morningstar has them in Financials. One of these days I'll have to track down what the different sorting conventions are and who follows which. I learned yesterday that DIS and PARA are considered Consumer Cyclical by some; Morningstar has them in Communications. I've based all of my balancing on Morningstar (who copies ... someone?), so I'll stick with that.
As we said before some of these companies overlap two or more industry sectors. I get DIS being Cyclical/discretionary due to their theme parks and cruises, but I don't understand PARA not being in Communications.
 

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