Weekly thought on $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.

And the bull roars on!  The bull penetrated and closed above the resistance of January 2018 high. SP-500_weeklyEither the bull will move on to make new high by taking out the October 2018 high or turns downward to form a right shoulder of a possible head & shoulder pattern. Giving the length between the left shoulder and the head is much wider than the distance between the “possible” right shoulder and the head, I speculate that the market will make a new high very soon and obliterate the potential head & shoulders pattern completely.

This week, I closed out my $SOLOW position. ElectraMecannica ($SOLO) reported earnings on Monday, and I was quite disappointed to learn that only 20 Solos were delivered in the 1st quarter of 2019 instead of the 50 Solos the company had stated. When they made the secondary offering a week ago, I thought they needed the money to ramp up production to more than 5,000 units for 2019. Turned out I was way too optimistic. On their February 25th press release on Factory Grand Opening Ceremony, the company announced they expected to produce approximately 50 Solos in the first quarter ended March 31, 2019 (see below excerpt), I thought that 50 Solos was too low, but I gave them the benefit of the doubt due to my assumption they needed to test the production run first.SOLO_50Solos

Below is an excerpt from the earnings summary:

SOLO_20Solos

I was also wrong about my expectation that the Bloomberg coverage would increase the pre-order number for both the Solo and the Tofino. Per ElectraMecannica’s October 29, 2018 Press Release (PR), they announced 64,154 pre-order number.  See excerpt from the PR below:

SOLO_Oct2018PreOrder

Total pre-order per above:  23,030 + 41,124 = 64,154

Yet, from their earnings summary on April 1st, 2019, they announced they currently have 64,327 pre-order number.  See excerpt below from the earnings summary.

 

SOLO_AprPreOrder

So, you have April 1st, 2019 pre-order number of 64,327 minus October 29, 2018, pre-order amount of 64,154 units which equaled to addition of only 173 new pre-order even after the Bloomberg coverage.

Now that the actual delivery was only 20 (instead of 50) and the pre-order did not increase significantly as I’d expected, I’m beginning to harbor doubt. Doubt is a killer of faith in an investment; if I’ve doubt, I can’t justify holding on to my speculation.

Therefore, I sold my holding on $SOLOW this week to sit on the sideline. I prefer to watch for new development from their following 2019 1st quarter earnings update. Just because I’m doubtful doesn’t mean I’m right.  As in my Amarin’s miss, I’m at risk of missing the run on $SOLO.

Besides getting out of $SOLOW, I also closed my other positions because I’m not getting any positive vibes from them.  And I also want to pay more attention to the two leading stocks which I believe will blow everything away just from their sheer size of gain I expect to make from them.

I reduced my position on $AEMD to the point where I no longer want to include it in my weekly thought.  I’ll be looking to add if it starts to bounce on good news. However, I have a stop at the all-time low of 79 cents. If the price gets there, I’ll be completely out.

I closed out my $HYRE position to lock in gain because I saw significant resistance under $5.50.  Since $HYRE’s bids/asks are quite thin, this can go up and down violently at the whim of a large trader, so I decided to lock in gain to take a break from watching the volatility.

After the $CGC drop on Monday creating a daily bearish engulfment candlestick bar, I began to feel uneasy holding my call options.  Tuesday lower opening spooked me a bit, and I decided to close out my option position.  Yeah, if I waited till afternoon to close the position, it would have lessened the losses I had to eat.  Oh well, hindsight is always 100% perfect!

Below are the two positions I feel (aka my opinion) are going to make me a whole lot of money!

$IBIO – Despite this week downdraft, I’m super-bullish in this stock.  Fundamentally speaking, it has all the signs for a major breakout to the upside sooner or later.

  • Biologic drugs are coming off-patent with billions up for grasp in the biosimilars market.
  • Brazil and South Africa plant-based facilities using iBio’s technology may come online soon.
  • CC-Pharming has already begun building their own high-tech fully automation facility with iBio as a partner.
    • From July 2018 press release, “CC-Pharming will manage all operations in China with iBio participating through joint ownership of the China business and ongoing collaboration.”
  • Plant-based bioreactor (the core of iBio’s tech) has the most cost-effective and efficiency in producing biologic drugs than the expensive traditional mammalian cell system.

From the list above, in my opinion, CC-Pharming alone will catapult $IBIO into a mainstream stock when they start to produce off-patent biologic drugs for their massive population.

Over the years, I’ve been adding $IBIO using gains I made from other stocks.  Although I already accumulated a decent size position, I will continue to add if sellers continue to take this down. To me, sellers have been providing me a gift that they keep on giving!

$LRAD – This week news “LRAD® Corporation Receives Order from California City for Genasys™ Public Safety Mass Notification Systems and Software” is music to my ear!  While the $1.1 million in international and domestic Genasys orders which includes the California city order may not sound significant, LRAD now has s California city to showcase their Genasys Public Safety Mass Notification technology to other cities across the U.S.!  Below is an excerpt that is very telling because the old tech must give way to the future tech!

LRAD_Genasys

To save more lives, those legacy sirens systems have to GO!  In the old days, when you heard the sirens, you might know there was an imminent danger, but you couldn’t say what kind of threat and what action you needed to do immediately to avoid being in danger.  By the time you found out, it might be too late. Now, with the Genasys Public Safety Mass Notification Systems, not only will you know why you are in danger, but it also includes direct instructions (from their long-range 60°– 360° voice and siren broadcast systems, and smartphone text messages) of what you should do to avoid the danger!

Take a look at LRAD’s website on the Genasys Public Safety Mass Notification Systems, and you will understand my point. Below is a photo of what you can see on their webpage:

LRAD_GenasysPicture

Asides from the Genasys Public Safety Mass Notification technology, I like to include the other LRAD’s strength I discussed previously which I’m reposting from my weekly thought on February 18:

Below included cut/pasted from LRAD Qtr 1, 2019 earnings CC transcript reported on Tuesday, February 12th:

  • Another exciting development in LRAD is the new line of indoor voice broadcast systemLRAD_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.
  • 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!

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

Needless to say, I bought back the shares I reduced last month at a higher price which is fine with me since I believe $LRAD can go much higher if they continue to announce more contracts with their Genasys Public Safety Mass Notification system.

Due to downdraft from $IBIO, $SOLOW, $CGC, $AEMD, my port gave back some more this week.

Current positions (in alphabet order):

Stocks = IBIO  LRAD

Call options and warrants = CARA  TRXC

Up 25.2% YTD

My 2 cents

From my camera:

DSC02517

 

 

 



Categories: Daily trading Journal, trading journal

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