Wednesday, August 28, 2013

Alexion Pharmaceuticals and Adept Technology

I have added Alexion Pharmaceuticals (ALXN), a creator of therapies for blood disorders, to my list of covered stocks. I do not currently own ALXN. You can read my Seeking Alpha article: Alexion Pharmaceuticals Offers Long-Term Value or look at my notes from the latest analyst call, Alexion Pharmaceuticals Q2 2013 Analyst Conference Summary.

Connected only by alliteration, we have robot manufacturer Adept Technology (ADEP), which had quite a stock boost today based on June quarter (fiscal Q4) results. My notes are at Adept Technology Q4 2013 Analyst Call Summary. You can see my prior prediction that this should be a turn-around quarter at Adept Technology Order May Signal Turnaround published at Seeking Alpha on June 28, 2013.

I do own ADEP stock.

Wednesday, August 21, 2013

Applied Materials long

Applied Materials Process Advantages Build Market Share [August 21, 2013]

One reason I like to have stocks like AMAT in my portfolio, besides the dividend, is that most investors have very short time horizons. If Applied Materials non-GAAP EPS is indeed in the vicinity of $1.50 per share for full fiscal 2016, then it should be around $30 per share then. Almost doubling what it can be bought for today.

Doubling in 3 years is actually great returns. But so many investors are just thinking about what returns they can get within the next quarter, or the next few hours if they are day trading, or the next few nanoseconds if they are computer algorithms, that this long-term value is overlooked. And in many cases, three years from now the investors who pursued what they thought were short-term opportunities will not have doubled their money. A substantial percentage will have halved their money, or worse.

I do have some of my portfolio in high-risk, potentially high gain small cap stocks, but the bulk of it is in Nasdaq 100 stocks or stocks that could potentially join that index.

Tuesday, August 20, 2013

Nvidia article and analyst conference notes

now at Seeking Alpha:

Nvidia's Competitive Outlook

While Nvidia is actually one of my favorite companies from way back, I have not owned the stock for years. Partly that is due to my shifting my earlier mostly IT technology portfolio to one that has become more than half biotechnology. You can also see notes on last-week's Nvidia Second Quarter 2013 analyst call (Q2 fiscal 2014)

Next up is Applied Materials. Marvell Technologies reports on Thursday, so I am likely to write about that on Friday.

Saturday, August 17, 2013

Inovio Gone Wild

Inovio Pharmaceuticals (INO) released Q2 results on August 9, 2013, and you can read my notes here: Inovio Results Q2 2013.

Because Inovio had been an under $1 stock until a few months ago, and then spiked to $3.03 on August 6, and because I had already invested in INO over a year ago, I thought it would be a good time to write an article for Seeking Alpha explaining my understanding of the company.

Here it is: Inovio's Price Spike and the Future of DNA Vaccines

The funny thing is, the article got quite long, and in the end I did not reference the Q2 results. That is okay, because the Q2 results don't tell you whether any vaccine in the INO pipeline is going to eventually get data good enough for FDA approval. Which is the crucial issue for start-up biotechnology companies like Inovio.

I tried to show what I think if the proper way for investors to think about startups and therapies that are in clinical trials, or even preclinical. Most analysts want to reduce everything to a "buy, hold, or sell" paradigm. But with healthcare pipelines no one really knows what the result of a clinical trial will be. IF we knew, why conduct the trial? And since nobody knows (including Wall Street sell-side analysts and hedge fund managers), the sensible approach is probability based and statistical. Bets should be spread out over a variety of companies that have a good probability of a high return on investment, with the expectation that some will have failed therapies. You have to make up for your losses with your gains.

If you have not learned basic probability and statistics (that's all you need), stay away from biotech therapy pipelines (or let someone manage your money who does. I do not manage other people's money, and I don't trust anyone to manage mine. Call me quirky.)

In particular, avoid stocks where the investment community, usually driven by sell-side analysts at major banks, has fully priced in victory. If FDA approval is priced into market capitalization, there is no reason to buy a stock (but your broker will suggest you do it anyway). What those of us who manage our own accounts want is companies where the market cap does not take into account the probable outcome. My usual examples of this for the past 5 years were BIIB, GILD, CELG, and ONXX, all of which had pipelines that were undervalued by the street. I continue to own all 4 of these stocks because while I think their current prices do predict a healthy 2014 in each case, I think the rest of the decade is not priced in.

But what I want to continue to search for, when I have time, is stocks like INO that still have a long way to go.

Keep Diversified!

Thursday, August 15, 2013

Applied Materials Sees Market Share Gains from R&D efforts

Applied Materials (AMAT) issued July quarter results that were within guidance and therefore probably a disappointment to speculators.

You can read my notes here: Applied Materials fiscal Q3 2013 Analyst Call

Applied Materials makes the rather expensive machines that are used to make semiconductor chips. The optimistic part of the presentation I found believable was that AMAT has been able to cut administrative expenses and move the money over to use for R&D. The result is new, improved machines that will gain market share, in particular as the newer 20 nm-ish process node goes mainstream in 2014.

In any case Applied Materials generates a lot of cash and pays a nice dividend. It is one of the safest stocks I own, and if 2014 is a good year, hopefully they will increase the dividend again.

I hope to write at more length for Seeking Alpha, but I have several other companies on my list at this point, so it could be a while.

Tuesday, August 13, 2013

Dendreon Q2 analysed

I have a new post at Seeking Alpha:

Dendreon Revenue and Cost Trends

You can also look at my note from the Dendreon (DNDN) Q2 2013 Analyst Conference Call

I have owned Dendreon stock since 2005 and its been a lesson in how badly the market prices stocks. Which is to say, The Market is just a bunch of humans, most of whom grew up well-off and like the English aristocracy of old, barely no how to dress themselves. They let the herd think for them, and constantly overprice and underprice stocks. Which means an individual investor can take money from them pretty easily if: you do a good job at research and analysis; you keep your emotions in check; you keep in mind that the world is a chaotic place; you are patient; you keep diversified.

In particular with Dendreon, when it finally got approval for Provenge for prostate cancer, a bunch of brokers who had never heard of Dendreon before hyped it to their clients, sending the price soaring to levels inconsistent with reality. I sold most of my stock then. As the price has fallen I have started accumulating DNDN again. I could lose my money, there is at least a 25% chance DNDN will go bankrupt by 2015, but I don't think so, as a say in my article.

Thursday, August 8, 2013

Dot Hill analyst call notes posted

I have posted notes on this morning's Dot Hill Q2 2013 analyst call

While HILL did better than guidance and increased 2013 EPS guidance, I guess traders were hoping for better because it dropped on the news. If, like me, you are in for the long term, the overall picture is quite good. I am still expecting HILL to top $3 per share in 2013 and go to $5 or more in 2014, which of course depends on execution, competition, and the economy. I own HILL stock and won't buy or sell any for 3 days; probably will just hold what I have until at least 2014 unless there is some major price movement.


Seeking Alpha selected my Dot Hill Likely To Reach $4 Per Share In 2014 as a Small-Cap Insight article. It is the first time I've had that honor. I am very pleased. Nevertheless, keep in mind that predictions about the future can be wrong ... so Keep Diversified!

Wednesday, August 7, 2013

Microchip (MCHP), Akamai (AKAM), SGI, and Hansen Medical (HNSN)

Earnings season is in full swing to me, as small and mid-cap firms that I follow report.

Today the editors at Seeking Alpha accepted and posted these articles I wrote:

Akamai Remains Volatile, So Buy on Dips

Microchip for Solid Growth and Dividends

I also posted my notes on the analyst conferences:

SGI June quarter 2013 analyst call

Hansen Medical (HNSN) June quarter 2013 analyst call

Neither SGI nor HNSN were very inspiring, which I'll explain when I have time to write articles on them, though it is pretty obvious from the June quarter results.

As I write this I own Microchip (MCHP), Silicon Graphics International (SGI) and Hansen Medical (HNSN) stock, but not Akamai (AKAM).

Tuesday, August 6, 2013

New Seagate (STX) article

And another article accepted at Seeking Alpha:

Seagate Offers Dividend and Potential 2x Upside

I own some Seagate (STX) stock, not much, but I bought it at $23.13 on June 12, 2012 and right now it is at $40.50, so I am happy with it. The dividends, too, should add up over time.

Friday, August 2, 2013

Biogen Idec (BIIB) Runs Up

I submitted an article to Seeking Alpha yesterday, in favor of Biogen Idec, and the stock ran up substantially this morning before my article was released around 11 AM Pacific Time. I own some BIIB. I just want to say that the editorial turnaround time was within normal limits, and other articles have appeared elsewhere that are also positive on BIIB, during the last few days.

My article:

Biogen Idec Product Pipeline will Propel it Higher

Don't ignore the risks, even when the upside dominates: keep diversified!

Thursday, August 1, 2013

TTM Technologies (TTM) Q2 analyst call notes

I've posted notes on the TTM Technologies (TTMI) Q2 2013 analyst conference

I own TTMI stock, but have not been recommending it for a while. It has been digesting an acquisition, giving it a presence in the Asian printed circuit board (PCB) market, in addition to its North American operations.

Things seem to be going pretty well. Debt is being paid down even as investments are being made in advanced PCB technologies. Demand is picking up, and profit margins are improving. I would peg $16 as a reasonable stock price.

I'll write a longer analysis for Seeking Alpha, but I have quite a backlog at this point.

Keep diversified!