Weekly thought on $IBIO, $LRAD, $MCIG, $SEED

“The market can stay irrational longer than you can stay solvent.”

A famous quote made by John Maynard Keynes the speculator came to my mind this week.  Although I didn’t bet against the “irrational” market, the quote did address the inherent power of market force.  It can move with reckless abandon for a long stretch before it comes to its sense.  And no one will ever know when the party is going to end.

Basically, the lesson I learned this week is that in order to flow with the market energy, I must abandon any pre-existing bias based on what I “think” should be the economic reaction to certain Fed policy.  Because I was stuck in the mindset that the October Fed balance sheet unwinding would be the harbinger of a down market, I held on to my available cash and refused to buy stocks that I really wanted to own or, at the least, bet on plays that I think had great momentum.  In a nutshell, I was completely out of touch with the market flow and missed the two important plays that I had been watching carefully- $HIMX and $KNDI.

I actually bought $HIMX on Monday near the low of the day, around $9.50; but got kicked out of the trade the next day after witnessing my unrealized gain disappeared in the morning from $10+ back to $9.5x.  I exited the trade to avoid facing potential losses from a winning position. I was more obsessed with macro-economic (October correction coming) than I was with Himax fundamental; thus I could only witness the rallies of both $HIMX and $KNDI without me on board. Oh well, moving on.

I also made a blunder on $KWFLF. Turned out that despite the streaming and licensing deals they signed, production won’t be online until about a year later. It was laid out in the investors presentation but I did not catch it until I read it more carefully. By then, price already dropped from those who saw it first.  Needless to say, I sold it for losses after I discovered the timeline. It was an avoidable error so I only had myself to blame.  At the time I sold $KWFLF, I also sold $MCIG. But after seeing the bounce on $MCIG later in the week, I bought back some. Now, I only have $MCIG for the cannabis play.

I also sold $CTEQF for losses ’cause I was looking to raise cash worrying about the October correction mentioned above. It looks bouncy so I may buy back some next week.

This week, I picked up an old favorite- $LRAD.  $LRAD had been my first biggest trade and it used to be my biggest win as well until I gave back a chunk when the company failed to procure the $10 million mass notification deal from a large Middle East city in 2015. Now, inside the month of September, the company generated $10 million dollars sales that are recognizable when shipped by end of December 2017.  Back when the company announced the prospect of a $10 million dollar deal with the large Middle East city, price soared as high as $3.88 buck. Now, with $10 million worth of signed deals inside a month, price is still at low $2!

Below are a list of news detailing sales totaled $10 million dollars:

  1. LRAD(R) Corporation Announces $6.0 Million U.S. Army Program of Record Order-September 28, 2017
  2. LRAD(R) Corporation Receives $900,000 Order for Military-Grade Mobile Mass Notification Systems-September 27, 2017
  3. LRAD(R) Corporation Receives $2.4 Million Air National Guard Order for New LRAD 360XL-MID Mobile Mass Notification Kits-September 26, 2017
  4. LRAD(R) Corporation Announces US Navy Orders ($600,000)-September 20, 2017
  5. LRAD(R) Corporation Receives $700,000 in Follow-On Public Safety Orders from Southeast Asia-September 14, 2017
News Sales Long Range Acoustic Device Mass Notification System
1 $6,000,000.00 $6,000,000.00
2 $900,000.00 $900,000.00
3 $2,400,000.00 $2,400,000.00
4 $600,000.00 $600,000.00
5 $700,000.00 $700,000.00
Total $10,600,000.00 $6,600,000.00 $4,000,000.00

While $10 million may not mean much to some, it is quite a significant amount for a microcap company with only $68 million market cap. Notice that out of the $10 million dollars sales, #2, #3, #5 are all mass notification system sales which represented about 38% of total sales.  Basically, their “superior” mass notification systems are now picking up steam. Below is an excerpt from their website:

Superior Voice Intelligibility

Based on Federal Emergency Management Agency (FEMA) and U.S. Military United Facilities Criteria (UFC) guidelines, the minimum standard for high-powered speaker array (HPSA) mass notification systems is a 0.5 speech transmission index (STI) measurement.

LRAD ONE VOICE systems feature the highest STI rating in the mass notification industry at 0.95, substantially exceeding all FEMA and UFC voice intelligibility requirements.

I’m betting that pretty soon, more cities, towns, colleges, universities, etc across the globe will be ordering the superior mass notification systems from $LRAD. Below give you a good idea of how LRAD’s mass notification system is being deplored so far (from July 25th news release):

  • LRAD 360X and LRAD 360XL-MID mass notification and campus security installations at three universities, including a competitively bid project for George Mason University in Fairfax, Virginia;
  • An LRAD 360XT mobile mass notification system and LRAD 100X systems for the City of San Jose, California for flood and disaster warnings, and neighborhood evacuation operations;
  • Satellite activated LRAD ONE VOICE systems at a dam and hydroelectric facility in the Western United States. The mobile and permanently installed systems can be activated at the mountainous site or via satellite from a command and control center several miles away; and,
  • LRAD 360X Quad Stack systems for a United States military base in Afghanistan. The base communication and emergency notification systems are activated and controlled via fiber or radio.

From a technical standpoint, the weekly chart looks very bullish:

LRAD_weeklyLook like this time around, the breakout above $2 has a much stronger weekly bar pattern (solid green bar) supported by much higher volume compared to the two previous attempts (see yellow circles).

And from a much longer time frame (monthly), this month price action is a continuation of a recent bounce off the base of a long term uptrend line. Notice Friday close above the 79 & 89 MA resistance lines which is very bullish per my book.lrad_monthlyThus, I took the risk and bought on Friday above $2 to get back into the game on $LRAD looking for breakout to above $4 buck betting that the mass notification system sales will continue to increase exponentially.

As far as I’m concerned, I believe $IBIO is being accumulated heavily.  Volume continued to be higher than average.  On Friday, someone wanted shares quickly and over half-a-million shares were bought in less than two hours.  Although I bought iBio because of the fibrosis treatment, I believe recent news regarding the contract deal with TheoremDx is a sign that the company plant-based protein expression technology is now officially opened for business. I think it is apparent that during our waiting, iBio diligently restored the facility (after acquisition from Caliber) to be in compliance with FDA guideline.  Last shareholders update pretty much emphasized the points.

From recent video “The Fab Lab Tour- Carol Feghali-Bostwick” below;

Dr. Bostwick mentioned that the plant-based technology can produce one gram of peptides for $50 while synthetic peptide costed about $25,000 per gram.  That’s a HUGE wallop of difference. Practically night and day difference!  Now, I expect to hear more contracts coming because of the cost-effective method of producing peptides for biotech companies.  Furthermore, recent 10K filing pretty much stated that iBio is no longer relying on Fraunhofer to complete the transfer of technology since they’ve refined and improved over Fraunhofer’s discovery.  Below is an excerpt from the 10K under “Our Business” that pretty much summed it up nicely.

Although the Company owns the patented iBioLaunch™ technology that arose out of the relationship with Fraunhofer and is entitled to use and prevent its use by others, the Company never received technology transfer from Fraunhofer to which the Company is entitled—including all of the know-how and data developed and accumulated during the period of its creation and use by Fraunhofer as the Company’s outsourced research and development contractor. Consequently, the Company now uses its newer and more advanced technologies in ongoing programs. However, even the older, less effective iBioLaunch™ technology was able to demonstrate significant potential for plant-based technologies in comparison to CHO and other legacy methods. For example, iBioLaunch™-produced vaccine candidates against each of the H1N1 “Swine” flu virus, the H5N1 avian flu virus, the bacterial pathogen that causes anthrax, and a candidate to block transmission of the malaria pathogen were successfully tested in Phase 1 clinical trials. Bio-Manguinhos/Fiocruz, or Fiocruz, a unit of the Oswaldo Cruz Foundation, a central agency of the Ministry of Health of Brazil, originally sponsored initial development efforts of yellow fever vaccine candidates, using the iBioLaunch™ technology to replace the vaccine it currently makes in chicken eggs for the populations of Brazil and more than 20 other nations, and these candidates have been successfully tested in non-human primates.

Notice the highlighted, “Consequently, the Company now uses its newer and more advanced technologies in ongoing programs”!  In a nutshell, Fraunhofer is no longer a liability to the company due to his refusal to transfer technologies owned by iBio, the company has an even more advanced technologies! With this tech obstacle out of the way, I believe the door is wide open for contracts signing and even possible a buy out prospect from a BP.  Think about it, the patent, “USE OF ENDOSTATIN PEPTIDES FOR THE TREATMENT OF FIBROSIS” is already public news, all it takes is for one BP to use the more expensive endostatin ($25,000 per gram synthetic peptide) to test it in their own lab. If it shows the same result as Dr. Bostwick studies which included the potential to reverse fibrosis, do you think the BP will sit idly letting iBio run away with the potential?  What is the odd of the BP making an offer to buy iBio outright?  So yeah, I think BO has a good odd giving iBio plant-based technologies and the fibrosis treatment.

But I’m more than happy to hear some good solid contract news for $IBIO. Let’s see what next week will bring.

$SEED is just waiting for news on China adoption of GMO seeds.

$MCIG, I like the potential of the 420cloud app.

Due to drawdown from IBIO and LRAD this week, my port gave back some.

Current positions:

Main port: SEED  IBIO  LRAD  MCIG  & cash (up 29.6% YTD)

Trading port: MENXF IBIO

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

Tags: , , , ,

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