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Summary Of My Short-Term Performance

|Includes:Fortress Biotech, Inc. (FBIO), STEM, UEC


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Current price as of 2/28/14

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My current recommendation

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Strong Buy


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After over 100% return within 3-month (two-month in my case), I believe the company has reached the majority of its short-term potential. There aren't many catalysts in 2014 according to my latest research and the pipeline needs to be further improved either by coming up with new drug/vaccine or acquisition of promising drug candidate from another company. The further advance of stock price is primarily dependent on 1) current clinical trial results; and 2) the improvement of its pipeline. However, once again, given its rich cash reserve and NOT too many major near-term catalysts, I believe the risk is still very limited at current price and will be for the coming months.


When it comes down to healthcare, the first impression we normally get is this is the riskiest sector among all. However, this is not always the case if we know how to play it smartly. Like I mentioned before, it would be very risky indeed if we bet on the clinical trial results; however, if we instead play the MISPRICE as in the previous CNDO case, the risk associated might not be that significant at all. In fact, there are a few healthcare stocks I believe are very safe (even safer than some of the blue chips) with extremely low risk and remarkable upside potential in 2014 and further down the road. STEM is one of them.

The reason I chose STEM over CUR, ATHX and other stem cell players lies in the very simple concept which I always stick to--VALUE. STEM currently has a rather slim market cap of only $80M at the time of writing, while CUR is almost 4-time larger and ATHX 3-time larger. I believe almost all CUR investors are betting on the Phase II trial result of its lead drug NSI-566 due in a few months and have very high hope for the result. No matter how good the previous data and trial results were, there is simply no way to predict the coming Phase II data readout. And if it fails, I am sure we all will see another IMUC-like crash of the stock price. The point here is, if we have the chance to play the much safer MISPRICE of STEM with equivalent upside potential, why risk on CUR?? And yes, this has nothing to do with risk tolerance since believe it or not, my risk tolerance is higher than 95% of all investors here on SA. Simply having high risk tolerance doesn't mean we have to take those unnecessary risks in order to secure the lottery-like return. When I first recommended CNDO three months back, people told me this stock was totally worthless, even at sub $2 (check the comments I received and you'll see). And now I believe those people would've learned that even those "worthless" stock can still get you over 120% return in less than two months. Again, the key here is VALUE.

To sum up, STEM is another CNDO-like MISPRICE stock with potential to at least double in 2014; and most importantly, this potential doesn't come with high risk, unlike CUR and the like.


One of the smartest plays in 2014 is uranium (high school knowledge and common sense are more than enough to understand this point). This is another almost risk-free sector. The only real and possible risk is timing (opportunity cost). The longer the recovery of uranium price, the higher the cost is. There is basically no downside risk (another Fukushima incident is highly unlikely) since most people would agree that the uranium price has already found its bottom. On the other hand, the news and heat we get from this sector recently strongly indicate that the comeback of uranium is not only a must but also imminent.

Another thing I want to point out is that there is NO need to spend a lot of time trying to figure out which uranium stock to pick ( I know some people are scratching their head in this respect), being it URG, URZ, UUUU, DNN, UEC, URRE and so on. As long as you're in this sector, you wouldn't miss the party.

UEC currently has the best value to my way of thinking. Most other names mentioned above are either close to their 52-week high or have cash/debt issues. Some people chose stocks like DNN thinking it has a good chance to get acquired, this is, however, not realistic as always. While I agree DNN is a good stock to own in 2014 given its business coverage and quality, keep in mind that its current market cap is 5 times larger than that of UEC. If I were to decide which U miner to acquire, I would consider both its business scale/quality and cost of acquisition.

Other Thoughts

Finally, I would like to share with you some of my stock selection criteria:

1) Extremely low risk even in bear market --> value driven-- it guarantees that you won't lose money even in the worst scenario.

2) Huge upside potential --> at least 100% return in a relatively short period of time (MCD, WMT, AXP, WFC are not my types,even though these might be great picks for risk-averse long-term investors).

3) I don't chase highs --> stocks like TNXP, ONCS, AGEN, NWBO (all underwent tremendous pps surge lately), to name a few, I wouldn't consider either, even if for many of you these might still be very good stocks to own even at current prices.

Disclosure: I am long STEM, UEC.