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Market Summary:
The major indices are mixed at following a choppy and nervous morning session on Wall Street with investors digesting Fed’s rate decision and monetary statement. The Central Bank kept its benchmark interest rate unchanged, halting its most aggressive tightening cycle in decades, but the Fed’s strategy for the coming months remains uncertain. The Dow continued to show relative weakness in early trading but the Nasdaq and the S&P 500 already hit fresh rally highs as shorts remained under severe pressure in the week of the past weeks' tech-led rally.
Stock Pick Summary:
Our portfolio continues its prolific run, and today we are ready to add a riskier play into the mix.
Based in Emeryville, California, it is a commercial-stage biopharmaceutical company developing and commercializing novel vaccines. Notably, the company’s commercial product, Heplisav-B is approved in the U.S. for prevention of infection caused by all known subtypes of hepatitis B virus in adults age 18 years and older.
Annual revenue of $723 million has been up 64% from a year earlier. The company’s hepatitis B vaccine, HEPLISAV-B, accounted for $126 million of the company’s $723 in revenues. The growth rate is substantial, amounting to a year-over-year surge of 104%. HEPLISAV-B is the only hepatitis B vaccine approved in the U.S. and EU that prevents hepatitis B with a two-series dose over the course of one month. The company anticipates that HEPLISAV-B’s revenues will increase to $165-185 million in 2023.
It trades at 11.89 times the operating cash flow and carries a trailing-year net margin of 36%, presenting a good upside potential. This is a very high risk play but we also get a promising biotech stock with solid fundamentals to further diversify our winning portfolio.
Risk Meter:
Allocation Guidelines:
We don't recommend over investing in any stock. Consider starting with a small amount, say 2-3% of your portfolio's overall value, and add a little at a time.
You could invest as low as $200-$500 on a pick, and even buy just 1 or 2 shares, if you are new to investing, low on cash or just prefer going slow.
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