Weekly thought on $AKER, $AMRN, $CARA, $DMRC, $IBIO, $SEED

What I think we witnessed this week is not a bear pulling a number but the bull stretching its legs.  I believe the market is now saying, “Hey fellas, I think I’m ready to run again.

SP-500_weekly

From the weekly chart above, this week green spinning top bar pretty much put a stop to the bearish sentiment and may be ready to head higher soon. There is a Presidential Election in the horizon and the market is going to run higher to meet the election day the same way a marathon runner run up the steep stairs to light the torch to kick off the Olympic Game.

Well, my port finally has a correction which is perfectly normal since nothing go straight up without a break.  I made minor tweak to my port which did not impact the ranking of my stocks in term of position size.  Basically, $DMRC size becomes even larger at the expense of $CARA and $AMRN.

“Why more $DMRC?  Isn’t it already your largest position in the port?”

Yes it is but the more I think about it (Alert! Alert! Beware of any statement or spoken words that starts with ‘the more I think about it’) the more I feel that there is no way that Digimarc does not get adopted.  Our growing population demands it.

“Huh? What does growing population has to do with Digimarc barcode?”

Think about it, with a much larger population down the road, what do you think is going to happen at the checkout lines at the big boxes retailers such as Walmart, Costco, Targets, Ralph Supermarkets, etc?  In other words, a growing population is going to stress out the existing infrastructural support at the big box retailers unless they take one of the two actions below:

  1. Hire more staffs and open up new checkout stations
  2. Utilize the latest technologies to increase checkout efficiency and minimize waiting time

As we all know, #1 is really not a preferable option since it reduces profit giving the additional labor cost and hardware investments.  However, #2 is a much preferable option ’cause the investment in technologies (both hardware and software) actually result in cost saving as well as maximizing efficiency in all aspect of the retail operations- from packaging to distribution to inventory control to faster checkout to customers’ need of add’l information to government requirement of additional information for food products.

Thus, any respectable big box retailers and distributors are going to “plan and invest for the future” accordingly.  If you pay attention to Walmart’s soundbite for the last few years, it’s all about “investing in the technologies to bring maximum shopping efficiency to the customers.”  And it is my big belief that the Digimarc barcode plays a critical role to this transformation of the futuristic retail world.  As far as I’m concerned, this is the case of “when” and not “if”.  Hence, I’m allocating more dollars to the $DMRC position betting for a huge payback (in term of years, not months).

Here is the scenario I’m betting on.  Once adoption starts, year over year, Digimarc revenues will increase exponentially as companies after companies from all over the world come to pay their annual fees to obtain the right to use the Digimarc barcode on their products packaging.  This is going to make the multi-years price increase of Priceline seems like child play.

It is from this vision and my belief that this vision will come into reality that I added to my $DMRC position to increase my bet.  Now, I just need to put on my “stubborn suit” to weather the heat from any correction against my position and wait for the “ding! ding! ding!” sound of the adoption bell.

“Hear that bell!  Digimarc has landed!  The digital wave in the retail world has begun!” is what I’m betting on to happen soon.

DMRC_weekly

As you can see from the weekly chart, $DMRC corrected this week after being up three weeks in a roll right after the recent dilution.  While it shows a bearish engulfment bar for the week, the bearish sentiment still needs to be confirmed by taking out this week low.  It may or may not happen but I need to be ready to take the heat when it does.  While I had done this last year and got burned as a result, I feel this year is different since Digimarc is so much farther ahead in building their infrastructural support as well as having more customers “reviewing” the technologies.

“Wait, how do you know there are more customers reviewing?”

Easy, read Bruce’s update on his recent earnings update here- Digimarc’s (DMRC) CEO Bruce Davis on Q2 2016 Results – Earnings Call Transcript

Below are some excerpts from the earnings call transcript:

Since our last call, we’ve been improving training, coordination and support for previously announced participants. We’ve also added several new partners some of which I will highlight in more detail later. As the number of partners grows, our company’s access to prospective customers and ability to serve them is expanding significantly. We are beginning to observe the benefits of this leverage.

A GS1 US executive opened the workshop with the following statement, “Over 40 years ago, the barcode revolutionized the world providing benefits for everyone, companies, communities, and consumers all that benefited greatly from this common and universal standard and today we’re doing it again.”

There are expansion initiatives underway in Japan, Europe and South America. Plans are being developed to address growing interest in the platform in other geographies as well. GS1 is a wonderful ally in formulating plans to facilitate timely, effective and efficient adoption of Digimarc Barcode around the world.

We’re also at the proposal and pilot stages with other much larger retailers regarding private brand product package enhancement subject to confidentiality restrictions. We and our partners are meeting with many leading consumer products manufacturers. We’re entering into pilot production with a leading consumer products company following successful technical trials and in parallel working to establish commercial framework for an enterprise license and providing collaboration on the platform.

***Blue highlights and underlined are my own emphasis.

I think the above are telling in term of interest in the Digimarc barcode.  Of course, announcement of signed deals with major retailers is what we need to kick off the adoption process but I don’t think I want to wait until then ’cause I surely don’t want to pay north of $50 to buy this stock.  Any announcement of major retailers coming on board can easily trigger a short-squeeze; therefore, to me, the perceived risk in this play depends on how confident am I in thinking that Digimarc barcode will be adopted.  Giving the increased size of my investment in $DMRC, I think I’m pretty confident.  Hence my larger bet.

$SEED, my 2nd largest position, is doing well this week.

SEED_weekly

Price stayed on the up trendline. As far as I’m concerned, I’m just waiting for the new CEO to execute his plan which included signing new partners per his recent earnings update.

$AKER, my 3rd largest position, continued to rally.

AKER_weekly

Price finally broke out of the $3.50 resistance and closed higher.  I can’t wait to look at the 3rd quarter earnings update to see how well they are selling the BreathScan OxiCheck since it has proven to be quite accurate- Akers Biosciences OxiCheck Study Results Positive. I believe the OxiCheck will sell well ’cause I want to buy one myself when it becomes available online.  I believe the OxiCheck will be a popular item among the aging population which is quite large due to our ability to live longer than the previous generations.

$IBIO, unfortunately, succumbed to selling pressure ’cause more and more investors are tired of waiting.

IBIO_weekly

Price broke down below the trading range since May.  However, I believe this is only temporary.  Since it is currently my 4th largest position, I still have substantial money speculated in this one.  One day, I’ll wake up with a nice surprise.  Until then, this one is in hibernation.

$CARA had another down week but this week drop is in smaller range than last week.

CARA_weekly

I believe price is going to find support at the $5.30 area.  While I lightened up $CARA to starter position size last week in anticipation of further downdraft, somehow I found myself building back my position to medium size during the week.  Because I believe in this one so much that I didn’t have the patience to wait till end of week to add.  Oh well.

$AMRN is now my smallest position.

AMRN_weekly

While the long tail below this week red bar looks promising for a bounce back up, price still needs to climb above this week high of $3.07 to negate the bearish sentiment.

Last Friday, “Amarin Announces Mandatory Exchange of Exchangeable Senior Notes Issued in May 2014 and November 2015”.  This news effectively eliminates a huge chunk of debt from the balance sheet but at the expense of diluting the company shares even more.  I believe the price correction this week is simply market trying to adjust its market value to reflect this new addition of shares.

The near term catalyst is now the “binary outcome from the 60% Interim REDUCE-IT analysis.”  You can click on the link to read the analysis written by a SeekingAlpha contributor.  I guess more and more people are beginning to accept the fact that the 60% interim analysis is not going to result in a stoppage due to efficacy.  If that is the case, which remain to be seen in this month or October, price may settle back down to $2.50 where there are the 79 & 89 MA supports.  This is the reason why this is the smallest size position in my port. However, there is still this oddball chance that a “stoppage” may happen.  Thus, I still hold some shares for the bet.

Giving that four of my stocks in my port was negative for the week, my port gave back some gain this week.

Current positions:

Main port (no margin): DMRC  SEED  AKER  IBIO  CARA  AMRN and 3% cash. (up 40% YTD)

Trading port (with margin): IBIO down 10% on position only and up YTD on port. Also, this week, I added $MENXF to my trading port. Since this is a relatively small position compared to the main port, I’m not writing an indepth analysis on it.  In a nutshell, it’s part of the Internet-of-things to monitor manufacturer’s plant productivity using Cisco’s chips.  If I read it correctly, there is no competition in this area and Cisco endorsement as well as the launching of the next generation of Industrial Internet of Things (IIoT) hardware and software solutions are the big catalysts here for future growth.  Memex Inc. is a company located in Canada. Also, check out their partner lists.

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

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