Weekly thought on $AEMD, $IBIO, $LRAD

Before you read on, please be aware that the analysis below is my opinion only and may include flawed assumptions and inaccuracy of logic; therefore, caveat emptor applies here.  Furthermore, all emphasis (color-coded, boldness, and underlined) on the excerpts are my own.

Ha! Last week doji bar on the SP500 was confirmed to be a “pause” by a strong rally this week. SP-500_weeklyNotice that the green bar is moving away from the former 79 & 89 MA resistance which are now becoming support.  Furthermore, this week up bar kicked off the run after penetration of the downtrend line two weeks ago which is very bullish.  Can the bull make a new high in the first half of 2019?  If momentum continues, it just may.

I believe “Boom!” best described my speculation in $SOLO and $SOLOW this week.  Let me reminded the readers that I entered my speculation in $SOLO(W) at a terrible timing because the price practically fell off the cliff the next day after my entry.  And then to top it off, a secondary offering was announced several days later.  And to add insult to the injury, SeekingAlpha (SA) published a bear attack article to further tarnish my speculation. My immediate reaction to the fall-off after my entry was to sell my $SOLO pronto and added more $SOLOW expecting the warrants to have less volatility than the common shares. But due to the tremendous selling pressure from the aftermath of the unexpected secondary offering and the bear attack article from SA, $SOLO dropped below a buck, and the warrants dropped as low as 20 cents. In short, I was wrong about the volatility of the warrants. Both the stock and the warrant tanked miserably.

Undaunted because I genuinely believe in the concept of a single-seat EV, I continued to accumulate the warrants as the price dropped.  My opinion of the single-seat EV is that it represents the best use of EV to reduce carbon dioxide emissions because a smaller and lighter EV will require a LOT less electricity to run the same 100 miles range than a full-size EV.  As mentioned in my prior blog post, when $SOLO announced the existence of a brand new factory Zongshen built to assemble the Solo EV in China, I bought the common shares $SOLO to supplement my $SOLOW.  In a manner of speaking, instead of selling the $SOLOW to cut my losses in disgust after the secondary offering, and the SA bear attack, I saw an opportunity to accumulate my position at a bargain price because I BELIEVE in the single-seat concept and TRUST my own judgment in my own due diligence.

What surprised me the most was the strength of rally and the percentage gain it achieved this week. I’ve no idea that a single article from Bloomberg “Canada’s Answer to Tesla Is a $15,500 Electric Three-Wheeler” could spark such a massive rally.  I expected the $5 price range to be made sometimes in the second half of 2019 when Zongshen proves to the world that it is on schedule to deliver 5,000 Solo by the end of the year.  Therefore, seeing that my speculation paid off in spade in just two days, I immediately put a mental stop losses to protect my windfall.  By Friday, I was stopped out of all my $SOLO and $SOLOW to protect my gain.

Does that mean I’m done with $SOLO?  No! Far from it, I’m looking to jump back in $SOLO as soon as it settles down.  With earnings release coming out soon, I’m afraid there may be a sell-off when traders found out that the 5,000 Solo won’t start coming in until the second half of 2019.  My concern may be unwarranted if there are more believers about the Solo’s single-seat concept car.  So, I’ll be mindful about the price action of $SOLO from here and will be ready to jump back in if the momentum supports it.

The above event belies my core investment strategy.  If I genuinely believe in the business after my OWN due diligence, I’ll continue to add even if the price drops from my entry point.  In fact, I see it as a blessing in disguise.  If $SOLO had gone up after my initial entry instead of falling off the cliff, I would have made less money.  It was due to my accumulation at the lower price that I had an incredible gain this week.  This is the same strategy I’ve been using on $IBIO and $AEMD.  The only difference between $IBIO/$AEMD and $SOLO is the time it took $SOLO to blast off to the upside.

$AEMD – In my opinion, the company’s earnings conference call (CC) disappointed not because of the earnings but because of the continued lack of  “update” from the new CEO.  There was no discussion of any “strategic transaction” mentioned by the 8K filing regarding the hiring of an interim CEO, and the overall tone of the CC reminded me of a poker player holding all his cards close to his chest to prevent others from peeking at them.  Understandably, price took a dump for two days after the CC.  Again, because I believe the hemopurifier has a strong leg with the Breakthrough Device Designation awarded by the FDA for metastatic cancer therapy, I added more on Wednesday when the price dropped to around a buck.

After some thought, I begin to understand why the interim CEO refused to discuss anything that is not finalized yet. My opinion is that despite the warnings on forward-looking statements, ambulance chasers will still go after the company when certain forward-looking statements did not come to fruition.  This creates an unnecessary legal cost and may likely settle out-of-court to minimize legal expenses even though the company could defend itself with the “forward-looking statements” clause.

Thus, I’m undaunted.  I still believe the company has a good chance of finding a suitor or a partner because the Breakthrough Device Designation provides a fast-track communication with the FDA which can minimize the cost of “waiting” for FDA responses. The way I see it, the cost of waiting may include a late start in the trial run while keeping up the expenses (payroll, service fees, rental, etc.) that are not productive.  Therefore, I believe (aka my 2 cents) that this cost-saving feature bestowed by the Breakthrough Device Designation holds some value to Aethlon’s suitors or potential partners.

Another big bonus from having Timothy C. Rodell, M.D., FCCP as an interim CEO is that he is very well-versed in oncology.  This goes to show that the Aethlon’s board of directors took the necessary action to move Aethlon Medical forward with the right person in the right direction which is using the hemopurifier as cancer therapy for dying patients afflicted with the metastatic cancers.

Below is an excerpt from the CC that proves my point:

AEMD_CEO_Oncology

Key points from the above excerpt regarding Dr. Timothy Rodell’s ability:

  1. 15 years experience in oncology
  2. Understand the pathways for identifying:
    1. target patient populations
    2. appropriate endpoints for
      1. early approval
      2. accelerated approval
      3. full approval

In summary, Aethlon Medical is going FULL SPEED on cancer therapy with the hiring of Dr. Timothy Rodell.

This is now a waiting game for the chapter on oncology and no longer on the first Breakthrough Device Designation for the numerous deadly viruses removal.  I believe the board made a wise decision so I’ll continue to hold.

$IBIOThe 10Q is out, and iBio recognized $651,000 of revenues for the quarter ended December 2018. A record-breaking revenues stream in iBio’s history and a great start to begin in 2019.  This week, I came upon an article that gave me a “Eureka!” insight on why CDMO is picking up steam.  Take a look at the excerpt from the article, “Future Trends in the CDMO Space“:  IBIO_Drug_offPatentThat is $57 billion PER YEAR in biologic sales going OFF-PATENT!!!  That means it is open season for anyone who can produce biosimilar drugs to offer to the global medical community at a lower price.

Below is another excerpt from the same article: IBIO_flexibilityBelow is a summary of the above excerpt in outline format:

  1. Flexibility
  2. Small footprint (my opinion is that the plant-based facility required a smaller footprint than those using the mammalian system in the production of same quantity output)
  3. Operator safety
  4. decreased risk of contamination
  5. scalability
  6. reproducibility
  7. lower cost
  8. time saved through efficiencies

Does all the above fit the profile of running the iBio’s plant-based facility?  I’m betting that it is a resounding YES!

Having said all the above, I’m betting that iBio CDMO LLC is a prime target similar to the frontier land grab.  We are talking about grabbing a piece of the $57 billion per year of potential revenues that only the worthy CDMOs can manage to do.  And I believe iBio’s plant-based facility can do so.

I’ve been accumulating $IBIO since my original entry point that my average price is much lower thanks to the descending price over the years. I believe (aka my 2 cents) that the time is ripe for $IBIO to transform itself into a beautiful butterfly that many prospective buyers will pursue.

$LRADLRAD reported on Tuesday, February 12th and below is an excerpt that spoke volume!

LRAD_2019Q1First, $10.2 millon for the 1st quarter was record revenue for LRAD.  Second, the backlog of $20 million is expected to be recognized as revenues for the rest of fiscal 2019, and this is ON TOP of what they will continue to sell during fiscal 2019!!

Another exciting development in LRAD is the new line of indoor voice broadcast system. LRAD_indoorLineWhat I like to see (aka my opinion) is that the indoor voice broadcast system includes the “panic button” akin to those red manual fire alarm activation panels you saw in the buildings.  Imagine the ability to hit the “panic button” that will generate a high piercing noise that will require practically everyone to cover their ear.  This is especially useful when a predator invades the property with deadly intention.

Furthermore, LRAD is also making headway with military organizations globally. LRAD_largeArmyOrdersBesides the expanding U.S. military orders, they are also expecting to increase international defense order as well!

One more thing I like to add that may benefit LRAD tremendously if it comes to fruition.  President Trump is calling for using the National Emergency fund to build the border walls.  If the court battle to build the wall is successfully defended, the U.S. Army Corps of Engineers may be involved in building the walls.  If that’s the case, what do you think is the odd of LRAD being selected as part of the border walls?

In summary, there is a LOT of irons in the fire for LRAD to shine in 2019 and beyond.

Thanks to the $SOLO(W) windfall this week, it was more than enough to offset downdraft from $AEMD and $IBIO.

Current positions (in alphabet order):

Stocks = AEMD  IBIO  LRAD

Call options = CARA  TRXC

Plus cash (up 17.7% YTD)

My 2 cents

From my camera:

009

 

 

 

 



Categories: Daily trading Journal, trading journal

Tags: , , , , ,

1 reply

Trackbacks

  1. Weekly thought on $AEMD, $IBIO, $LRAD, $SOLOW – Trading my two cents

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: