In "Readers Respond" I do my best to answer readers' questions, but keep in mind that my responses to these questions are my opinions and personal speculation that I have based on my own research and DD.
Also, I will try to respond to a number of requests that I've received via email or comments to the board asking for 'VFC's Take' on stocks that readers have found. While I'll do my best to address as many as I can, please take a few things into consideration while reading:
- I have not thoroughly researched all of the stocks that I'm about to comment on. I've done the initial DD but my opinions are mostly based on my first impressions of the stock. I'm merely providing VFC's Take, as requested. Use that as a starting point to do your own DD.
- Don't get testy if I don't like your stock. Remember, this is just my initial impression and I take into consideration some variables that other people don't, that's why 'VFC's Take' is not always the mainstream impression.
- I appreciate all the recent feedback, and keep the stock tips coming; this is a great forum for all investors of all levels to share tips and insights. There's a whole lot of stocks out there, but there's only a few gems. Let's keep trying to find those gems.
BDSI: A comment from Alejandro regarding BioDelivery Sciences (NASDAQ:BDSI):
How are you doing?
what about BDSI? it is near to my target price, I want to load up some shares...Is it possible that the decline is due the low volume of trading and general market drop?...
VFC's Take: I enjoy the opportunity to buy shares of BDSI for under five bucks, but the prospects of buying for a level at or below four bucks is, in my opinion, a gift.
The broad market, espeically the biotech/small pharma sector, is dealing with a turn in sentiment after reaching the DOW 10,000 mark and that could be a contributor to the decline in share price.
Regardless of the price action of the stock, let's look at the facts: Milestone payments due, Onsolis approved and commercial launch imminent, heavyweight Onsolis partner, solid drug delivery system that was validated with Onsolis approval and the pipeline is solid and intact.
I only like the fact that the Meda partnership materialized quickly; that tells me that they see immediate potential with Onsolis, contrary to NovaDel (NVD) who took over a year to find someone to commercialize their product.
Is there risk associated? Sure, it's the stock market. Maybe Meda will fail to fully realize the commercial potential of Onsolis on the open market and there's always the potential of a market crash, but the days of speculating with BDSI are over, in my opinion, and the facts alone should dictate that BDSI is now looking like a good long term growth pick.
It would also be foolish to ignore the wild card, in my opinion; I find it funny that when TheStreet.com decided to go positive on a biotech/small pharma stock for a change, it was when a large hedge fund (which was in the process of exiting their position from the stock) stood to benefit from a price boost.
CVM: A comment from Confused Investor regarding Cel Sci Corp (NYSEMKT:CVM):
Hey VFC! I have a question for you about CVM. I'm young and new to trading (about 2 months now) and find your blogs very helpful. I do own shares in CVM and I liked the company before I started reading your posts. I've found all of your advice to be unbiased and informative but recently and only about this stock (CVM) have things started getting hairy.
There seems to be a lot of controversy over this stock. Seems like people either absolutely love this stock and you or think its complete scum and that you're somehow in cahoots. Of course with you being involved with the tour of the new facility it only made allegations worse about you being a booster of the stock.
I want to make it clear that I'm not questioning the integrity of you or your blog. I find it very helpful and I appreciate what you do for the inexperienced investor like myself since that kind of advice is hard to find. I guess what I'm asking is what in the world is going on with this stock?! The more good news I read about it the lower the price and volume seems to go. I follow other biotechs and there seems to be much less controversy and their good/bad news don't seem inversely related to their price/volume like they do for CVM.
VFC's Take: Dear Confused, Thanks for the comments. First of all, if you are as new to the market as you claim, then you'll have to get used to the volatility and scenarios that you've seen play out over the last couple of months with CVM - especially if you're going to stick with trading biotech stocks.
It's just a part of the game with this easily manipulated sector. Also, keep in mind that a lot of big players and hedge funds lost a lot of money during the market crash and these entities will stop at nothing to make that money back because it's their own livelihood at stake, after all.
The small or long term investor is nothing but some clown holding a few shares that they want in the big scheme of things, so the small investor needs to be that much more confident in his or her DD to be able to stomach the volatility and either accumulate for the long term, buy the dips, or try to play the volatility and pick up some crumbs that the big boys leave behind. The key point here is to do your own DD and stick to the facts. Don't let the haters that are late to the game scare your shares away from you.
As for why Cel Sci went with BioMedReports for the tour of the facility, I can only speculate. The fact that I was in the area helped, but looking at it realistically, if I was Cel Sci and I had to make a decision about who's going to come and visit my house, I'll put this scenario out there:
If one guy is constantly smak-talking my family, and then suggesting that my reality does not exist - even while that reality is present every day, then there's no chance that that guy is coming anywhere near VFC's House. Essentially, that is what a few entities have decided to do with Cel Sci, for whatever reason - but I'm inclined to believe that the attackers of Cel Sci are making out financially somehow, because why else would you pick on a company that is developing two potentially life saving treatments - unless you're just that much of a cruel and heartless coward.
On the other hand, if I've got another entity that, to date, has reported the facts as the have been presented, and then made opinions based on the available facts, then that guy has a better chance of seeing the house, meeting the family and petting the dog than the guy who spreads mis-information.
After all, some people you can trust and some you can't. Unfortunately, in today's day and age, the people that you can trust are becoming fewer and farther in between.
That's the scenario, you figure out the who's who.
Let's also take another fact into consideration, there are a lot of people who are very late to the game with Cel Sci and they are pissed off that they missed the boat. It's natural, when you're on the wrong end of a stock that just skyrocketed (in terms of percentages) to want to attack those that made off pretty good, and then pressure the stock down in order to make money off the short side; but remember that it wasn't long ago that this stock was trading for twenty cents and the peanut gallery was nowhere to be found. In fact, CVM traded in that twenty to forty cent range for quite some time and again, the peanut gallery was nowhere in sight - these guys only showed up after the fact. If Cel Sci and its technology was really that bad, then why wait to do the 'good deed' of informing the investment world of how bad an investment it really is.
Point is: Stick to the facts. VFC is just a guy with an opinion and a computer. The only compensation I get for this blog is when readers click on the Google text ads I'll make a little bit and if people buy products via the picture ads, then I get a small commission. In reality, the blog is just a hobby. Keeps me off the vodka tonics. I get no compensation from any company that I have ever written about and I don't care to ever do that because then I've got to compromise being me - and if I'm not calling it like I see it, then I'm not being VFC.
Do your own DD and be aware of the difference between 'pumping & bashing' and having a 'positive or negative outlook.'
Pumping and bashing generally do not include facts or information. For instance, if you read something like, "this stock is going to ten bucks" and that assertation is not supported by any reasons as to why - then that could be construed as a pump.
If someone were to say that
in my opinion, this stock will be a twenty dollar stock a few years down the road because I think that Multikine will be successful in Phase III trials, based on the solid results of the Phase II trials in addition to the fact that the FDA may approve the emergency use of the company's H1N1 treatment,
then that is called - because it is based on combination of potential events and actual facts - having "a positive outlook."
Having a negative outlook would be,
I don't think that Multikine will make it to market because I'm not convinced that the Phase II results were as successful as the company makes it sound and it's a tough market for cancer immunotherapy stocks right now.
A 'bash' would be "get out now, this stock is going to drop!"
There's a huge difference and any investor needs to weed through the BS. That's what the ignore button is for on the message boards.
Lastly, the peanut gallery and the such were nowhere around before the stock became a ten-bagger in under a year. The fact that they're here now should be a telling enough sign of why they showed up.
Thanks for the comments.
Disclosure: VFC is long BDSI, CVM.