Real Life Trading Fall Portfolio 2018: First Edition
Traders, friends, family, fans, followers from around the world! How are you?! Wow, what a month October has been. It has mostly just rained here in Nashville, TN with harrowing glimpses of what the fall will bring.
I’m excited personally, as I made a commitment a few years ago to love all weather. Why fight it? Just enjoy it!
What the heck is the market going to do over the next few months? We can’t fight that either, right? Therefore we have to find it’s flow and simply go. But with rampant volatility, mid-term elections around the corner, stocks breaking massive support and some people calling for a recession, is this it? Are we at the top?
It’s certainly possible. I’m a huge fan of Ken Fisher and here’s what he had to say. As I’ve been saying, really since February, this market is going to be choppy, ‘gappy’ and all over the place. Day trading and selling volatility will be key strategies to focus on and looking to pick up solid companies that you love at very low prices might be a good approach as well.
In this newest portfolio I did a special scan to find some interesting companies to track over the next 3 months. As usual, I plan for this portfolio of stocks to be accumulatively higher at the end of 3rd edition, which will come out in December. With so much goodness and it is all free, how about we dive right in?
1. Axsome Therapeutics, Inc. Ticker: AXSM Analysis on 10/27/18
What a fun name right? HAHA. I thought it was catchy. We’ve heard about numerous different biotechnology and medical research companies over the last few weeks. What’s this one about? Well Axsome Therapeutics, Inc., a clinical stage biopharmaceutical company, is developing novel therapies for central nervous system (CNS) disorders. Its product candidate portfolio includes AXS-05, AXS-09, AXS-02, AXS-07, and AXS-06.
To make it a smidge more clear and less cluttered looking, AXS-05 is in the Phase III clinical trial in treatment resistant depression and in agitation associated with Alzheimer's disease, as well as in the Phase II clinical trial for smoking cessation.
AXS-02 is also in the Phase III clinical trial in knee osteoarthritis associated with bone marrow lesions pursuant to a special protocol assessment and in chronic low back pain associated with Modic changes.
AXS-07 is in Phase I clinical trial for the acute treatment of migraine.
AXS-06 is also in Phase I clinical trial for the treatment of osteoarthritis and rheumatoid arthritis and for the reduction of the risk of nonsteroidal anti-inflammatory drug associated gastric ulcers.
AXS-09 is a novel, oral medicine combination of esbupropion and dextromethorphan, which is in Phase I clinical trial.
The company has a research collaboration agreement with Duke University for evaluating AXS-05 in a Phase II trial in smoking cessation.
This company was founded in 2012 and is based in New York, New York. It’s a super small company at only 27 full time employees. Obviously the companies financials are a bit rough, as many would expect from a new biopharm. However, 15.68% of shares of this company is held by institutions, which is a decently high number.
The real reason I like AXSM right now is the technicals. Obviously, we have a bearish trend in place on a weekly chart. But, we are starting to see some good volume spikes. Since it’s IPO, AXSM has pretty much cratered, yet it’s managed to hang around the $3.70 mark for a while now.
AXSM has recently broke above a resistance and if we zoom in, kind of has a weekly double bottom shape with a bit of a retest. Now, AXSM did just smack it’s head against the 100 SMA on a weekly, which means I’m going to start watching for a closure above that while zooming into the daily and keep my eyes peeled for a breakout. Granted, earnings are around the corner and since biopharm companies can gap wildly, I likely will trade this with call options which will limit my downside risk. The $5 calls are hella cheap right now for December’s expiration, so that’s the play I’ll be watching with AXSM.
It’s also a relatively cheap company, so even if one had to do an absolute zero play with the shares, where they took their risk and divided by the entire price of the stock, so if it goes to zero a trader would lose 1R is still a possibility also.
2. Purple Innovation, Inc. Ticker: PRPL Analysis on 10/27/18
This is a company that surprised me. Ashley and I totally got sucked into this company by it’s incredible marketing and we bought a purple mattress about 6 months ago. And so far, we don’t hate it.
This company has really low volume so we certainly wouldn’t be day trading it, but if some shares were picked up for a quick spike, I’m sure they wouldn’t have a issue being sold. What’s interesting on PRPL, I’m trying to figure out if they are a buyout candidate, from a company like SNBR.
So, what does PRPL do exactly? Pretty simple to explain. Purple Innovation, Inc. designs and manufactures mattresses, pillows, and cushions. The company markets and sells its products through direct-to-consumer and retail channels. Purple Innovation, Inc. was founded in 2010 and is headquartered in Alpine, Utah.
I was actually pretty surprised to find out a few months back that this company was public.
Their mattress are comfy, but what helped them was their exceptional marketing campaign. Their last few earrings releases were semi brutal to say the least and their most profitable year looks like it was 2014. It seems PRPL is trying to get back on track.
For a super quick trade, one could consider something like this on PRPL. Although the long term moving averages are certainly in the way, this company has a 90.8% institutional ownership with 228,000 shares being owned by Blackrock Inc which is a pretty big deal.
PRPL also has a pretty high short float, so if it does start getting some traction, we could see a nice pop higher. Just make sure to either A) be out before Nov 8th earnings or B) have a super small position over earnings. Even though Ashley and I are owners of a mattress, we haven’t taken a plunge yet with some shares, but that might change if PRPL can catch some higher movements.
3. NeoGenomics, Inc. Ticker: NEO
NeoGenomics, Inc., together with its subsidiaries, operates a network of cancer-focused genetic testing laboratories in the United States and was founded in 2001 and is headquartered in Fort Myers, Florida. It operates through Clinical Services and Pharma Services segments.
The company laboratories provide genetic and molecular testing services to hospitals, pathologists, oncologists, urologists, other clinicians and researchers, pharmaceutical firms, and other clinical laboratories. It offers cytogenetics testing services to study normal and abnormal chromosomes and their relationship to diseases; fluorescence in-situ hybridization testing services that focus on detecting and locating the presence or absence of specific DNA sequences and genes on chromosomes; flow cytometry testing services to measure the characteristics of cell populations; immunohistochemistry (which was the first time I’ve ever seen that word) and digital imaging testing services to localize proteins in cells of a tissue section, as well as to allow clients to see and utilize scanned slides, and perform quantitative analysis for various stains; and molecular testing services that focus on the analysis of DNA and RNA, and the structure and function of genes at the molecular level.
The company also provides pathology consultation services for clients in which its pathologists review surgical samples on a consultative basis; and testing services in support of its pharmaceutical clients' oncology programs, as well as acts as a reference laboratory supplying anatomic pathology testing services.
Bottom line, it does a lot of stuff. HAHA.
This company is pretty huge though, with 1,000 full time employees and 73% of the company is held by institutions. And guess who has 15,000,000 shares? General Electric! Interesting, right?
A company that got absolutely train wrecked in 2000 is slowly climbing back to normalcy. It has been doing a whole lot of nothing until about 2014 where the stock has since increased 500%!
Past history says this company has further room to grow. Earnings are just hours away and I’m really excited to read over them and see how they perform. I mean, this company is one that has come back from the brink of collapse when it’s share price hovered in the $1.00 region for a long while.
I really like the retest gap on NEO recently as well. Since it is a pretty volatile stock, you could consider many various approaches on this one. You could do something like this where you leg into positions. Or, you could do a volatility play and sell a November put (on a bullish trending stock), snag you .10 of premium per contract and expect this one to expire worthless since it’s an entire $5.88 below the current price on a $15.88 stock! Let’s keep eyes on this one. She’s in a strong bullish trend right now!
4. Vocera Communications, Inc. Ticker: VCRA
Vocera Communications, Inc. provides secure, integrated, and intelligent communication and workflow solutions that empowers mobile workers in healthcare, hospitality, energy, and other mission-critical mobile work environments in the United States and internationally.
The company's communication solution could be integrated with other clinical systems, including electronic health records, nurse call systems, and patient monitoring, as well as to provide critical data, alerts, alarms, and clinical context that enable workflow. It also offers Vocera Communication and Workflow System, a software platform, which connects communication devices, including hands-free, wearable, voice-controlled communication badges, and third-party mobile devices. In addition, the company offers Experience Innovation Network, a membership program, which partners with healthcare provider organizations for the development of innovations and solutions that enhance care team and patient experience, as well as clinical and operational performance.
Further, it provides professional and technical support services; and classroom training, distance learning, or customized courseware for systems administrators, IT and industry-specific professionals, and end-user educators.
As of December 31, 2017, Vocera Communications, Inc. provided its solutions to approximately 1,500 healthcare facilities, including large hospital systems, small and medium-sized local hospitals, and various clinics, surgery centers, and aged-care facilities. The company sells its products through direct sales force, resellers, and distributors. Vocera Communications, Inc. was founded in 2000 and is headquartered in San Jose, California.
Look at this weekly chart. Talk about a retest. Wow. Right now, this stock is in a nice healthy uptrend and their earnings just came out. They came out with quarterly earnings of $0.21 per share, beating the Zacks Consensus Estimate of $0.11 per share. This compares to earnings of $0.11 per share a year ago.
This quarterly report represents an earnings surprise of 90.91%. A quarter ago, it was expected that this hospital mobile communications company would post earnings of $0.04 per share when it actually produced earnings of $0.09, delivering a surprise of 125%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Vocera, which belongs to the Zacks Communication - Components industry, posted revenues of $47.82 million for the quarter ended September 2018, surpassing the Zacks Consensus Estimate by 3.07%. This compares to year-ago revenues of $42.30 million. The company has topped consensus revenue estimates four times over the last four quarters.
That’s pretty strong right? If we zoom into the daily chart, you’ll see a smashing bullish retest gap. With the wild and tumultuous moves of the market recently, it might be best to give this one some breathing room and set up some lower limits to buy on a possible pull back and retest of the gap. A fun trend to watch my friends! Speaking of fun trend…
5. Apple Inc. Ticker: AAPL
And she appears in each and every portfolio because, why not?
The biggest update on AAPL probably would be this decently interesting head and shoulders type of pattern. I agree. It’s there. Which means, what will earnings bring? My guess on earnings, they will make billions, crush gains hard and probably not gap that much. If AAPL gaps down similar to AMZN and GOOGL it could get pretty gnarly in the markets. The 100 SMA on AAPL will be pretty key on AAPL. If she gaps down below that price, AAPL (and the markets) will flush lower decently hard. As long as AAPL stays above that price on an earnings gap, I would assume the trend will stay in tact. Here’s a peek at the weekly. I’m personally planning for AAPL to hang out up here for a while and just trade sideways. A few real life traders hopped into a Nov $245 covered call. That’s over $20 from where AAPL is now. Large chance this one expires worthless. Unless of course AAPL gaps above $233 on earnings, which will mean this stock will just run to the moon (again).
Time will tell, I’m excited about it! Let’s see what happens as well forge ahead into the fall and winter season here in the Northern Hemisphere while my amazing traders in the Southern Hemisphere slide into the Summer season.
Let’s crush this market my friends!
~ Jerremy Alexander Newsome