Weekly thought on $AEMD, $IBIO, $LRAD, TRXC

Well, well, well, am I glad to be wrong about my last week probability assessment that the broad market has a 51% chance of correction?  You bet!  I’m still heavily invested; thus I wanted to see bullish broad market to act as a supportive foundation for my stocks to go higher as well.

This week is a recovering week for my port.  I also made a few change by selling $SIGO to close my position and added back $TRXC.  The reason I dropped $SIGO was because my sloppy due diligence neglected to take into account that Sunset Island Group does not have any valid licenses (temporary nor permanent) to cultivate and sell recreational cannabis in 2018.  All along, I was ASSUMING that they have the licenses to do business in 2018.  And when I started reading the comments in investorshub, I realized that California will only issue 2018 licenses (if approved) in January 2018.  This completely changed the dynamic of risk in my bet since I only wanted to bet on the shortages of cannabis supply for recreational use but NOT on the binary event of the company’s ability to procure the necessary licenses to conduct cannabis business in California.  If the company failed to procure licenses to conduct cannabis business in California for whatever reason, it doesn’t matter how many square foot space the company has in cultivating cannabis, they cannot legally sell the weeds they harvested.  Thus, I opted out of the risk betting on this binary event by closing my position.  Obviously, I gave back a chunk of gain due to falling prices on Monday.

$AEMD made my week by waking up with a big bang!  I always knew the dollar price wouldn’t last giving the massive potential of AEMD’s hemopurifier if it received blessing from the FDA.  Hence, I am grateful to be able to accumulate quite a boatload before the awakening.AEMD_WeeklyLook at the volume below this week bar. The technical divergence is there. Price closed above both the weekly 5 and 15 MAs.  My 2 cents is that this week spike may be the start of a climb from here.

Fundamentally speaking, AEMD’s hemopurifier has proven to be SAFE and NON-TOXIC to most (if not all) patients being tested.  In fact, patients who were tested with the hemopurifier were treated successfully, including the ebola patient who was in coma and dying from multiple organ failures.  So, my probability assessment for FDA approval is better than 50/50.  Although $AEMD went through many years of testing; it was only recently granted the Expedited Access Pathway Designation from FDA to accelerate U.S. access to the Hemopurifier® as a treatment for life-threatening viruses.  Here’s the beauty per my 2 cents, all the past years AEMD spent on testing and testing the AEMD hemopurifier with live patients, these test results become the body of real world data (RWD) or real world evidence (RWE) that the FDA “may” accept as clinical data.  On top of that, it finally struck a deal with $IBIO to mass-produce the patented ingredients for its hemopurifier device and at the most economical cost compared to traditional method.  I believe $IBIO’s recent success in making their facility FDA compliance played a major role in giving AEMD’s ability to gain fast track status with the FDA.  Therefore, I’m not surprised at all of this week sudden spike up.  This awakening is long overdue.

$LRAD Q4 2017 result is better than I thought.  Below are excerpts that pointed to signs on the wall that LRAD’s technologies are breaking out to be accepted by a much larger customer base.

  1. Our bookings for the quarter were $12.5 million, and totaled $28.4 million for the fiscal year, that’s a record for LRAD, a 195% increase over the prior fiscal year and more than the previous two years combined. This increase was led by North America achieving $16.5 million of bookings, up 166% over fiscal year 2016.
  2. In FY17 we received our largest domestic order, a $6 million U.S. Army order. This order was for more than 2 times that was originally budgeted for the army to buy in FY17.
  3. New customers accounted for $10 million of our $28.4 million in bookings, last notification, bookings were exceptionally strong increasing to $8.7 million from $1.6 million in fiscal year 2016.
  4. Off note, most of the mass notification bookings in fiscal ’17 came through the channels originally developed to support the acoustic hailing device sales.
  5. We ended FY17 with a backlog that is orders to be delivered in FY18 of $11.9 million versus $3.1 million in FY16 over a 300% increase.
  6. In FY17 we booked $10 million from new LRAD customers, $8.7 million in mass notification orders, realized bookings growth in all geographic sales region and our pipeline increased by 30%.
  7. We’re making good progress in our growing and diversifying our customer base and our products offerings.
  8. In fiscal ’18 we expect the U.S. Army to release an RFP for our multi-year program, this award is of course dependent on an approved FY18 defense appropriation bills.
  9. We’re continuing to pursue global market opportunities for acoustic hailing devices and mass notification systems with the support of our expanded sales team and the 17 new domestic and international resellers added to our sales network last year. Increasing and strengthening partnership and pursuing acquisitions to broaden our product line are among our fiscal 2018 business priority.
  10. Based on the strong bookings trend, the significant growth of our addressable backlog and our recent order announcements were off to a strong start in fiscal year 2018 and positioned for growth in fiscal 2018.

Here is what I’m excited about, notice #1 and #3 above mentioned booking of $28.4 million which already exceeded fiscal 2017 total revenues of $20.3 million.  #5 discussed backlog of $11.9 million that are to be shipped in fiscal 2018.  Basically, by the end of fiscal 2017, the company already have $11.9 million revenues that  are to be recognized in fiscal 2018.  This is already a bit more than 50% of 2017 fiscal revenues.  Don’t forget that after the fiscal 2017 is over, the company made the following sales in Q1 fiscal 2018:

That’s another $3.6 million on top of the $11.9 million backlog to be recognized in fiscal 2018 which bring the total to $15.5 million in revenues with three more fiscal 2018 quarters for LRAD to generate even more revenues. In a nutshell, we are at the tail end of fiscal Q1 2018 and LRAD already have $15.5 million recognizable revenues which is a whopping 76% of fiscal 2017 $20.3 million.

Now, here is another beauty and a potential massive surprise for fiscal 2018; #2 and #8 above implied that there may be more huge orders from the U.S. military happening in fiscal 2018.  Also notice that #4 and #6 above signifying that the demand for LRAD’s mass notification systems continues to be strong and persistent.

Because of the above signs on the wall, I added more to my already overweighted position on $LRAD through out the week.LRAD_weeklyTechnical speaking, LRAD has a Cup & Handle breakout this week. Since this cup is formed over a year-and-a-half (from July 2016), the breakout is more pronounced than the shorter time frame varieties.  I expected to see price going over $3 in 2018 if not this month when more million dollar sales are announced.

This week, I bought back $TRXC.  Originally, I was going to wait to see how low it would drop due to tax loss selling; but Friday bounce after reaching the low point of $1.81 was so strong that I decided to jump back in before closing to buy back my core position.  Sure I wished I bought them at the $1.8x level but lower price is not what I’m looking for.  It’s the direction of momentum that I’m looking for.  Friday strong reversal told me that there is a possibility of sellers’ exhaustion and buyers (both short-covering and old/new investors) are coming back in.  This Friday reversal needs to be appreciated by looking at the daily chart below:TRXC_dailySee the strong hammer candlestick bar with high volume.  Below is the definition of a hammer candlestick bar in a downtrend:

A hammer is a type of bullish reversal candlestick pattern, made up of just one candle, found in price charts of financial assets. The candle looks like a hammer, as it has a long lower wick and a short body at the top of the candlestick with little or no upper wick. In order for a candle to be a valid hammer most traders say the lower wick must be two times greater than the size of the body portion of the candle, and the body of the candle must be at the upper end of the trading range.

When you see the hammer form in a downtrend this is a sign of a potential reversal in the market as the long lower wick represents a period of trading where the sellers were initially in control but the buyers were able to reverse that control and drive prices back up to close near the high for the day, thus the short body at the top of the candle.

TRXC_Hammer

Here is why I bought back before closing bell on Friday, not only did $TRXC ended with a hammer candlestick bar with high volume, it also closed above the magical 79 & 89 MA supports.  To me, these are very powerful signal and the probability of a stronger bounce next week is very high from my perspective.

Now, on to $IBIO.  To tell you the truth, I don’t really have anything to worry about despite a weak price action.  As long as the catalysts are still alive for $IBIO, price action is just noise created from weak hands, day-traders, swing-traders, doubters, and the daredevil shorts.  Below is a reminder of why I like $IBIO:

  • Dr. Carol A. Feghali-Bostwick’s discovery- how IBIO-CFB03 worked on human skin and lung with the possibility of reversing the fibrosis disease (see video below)
  • A potential global life-saver in the event of an unexpected pandemic attack that I feel is coming sooner than later due to the accumulative effect of global warming
  • AEMD’s hemopurifier, per my 2 cents, has a better than 50/50 chance of being approved by FDA as a treatment for life-threatening viruses (known and unknown).  Once approved, this would open a massive door to validate iBIO superior plant-based technologies that offer the best economical cost to customers compared to traditional based method.
  • AEMD’s hemopurifier has an opportunity to be the break-through medical device that can treat patients dying of metastasis cancer.  If this is validated to be truth by future trials, both $AEMD and $IBIO will go through the roof.

Hence, I see no reason for me to worry about weak price action at the moment.  There is also a shareholders meeting next Tuesday on December 19th.  I’m looking forward to more updates from the company.

Thanks to rally from $AEMD and $LRAD, my port gained back nicely from last week.

Current positions:

Main port: LRAD  AEMD  IBIO  TRXC  & cash (up 21.6% 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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