PRO Weekly Digest: AAAP, SEB, LJPC And Idea Screen Of The Week

by: SA PRO+ Editors


We highlight a noteworthy PRO short idea on a biotech with a vastly overestimated market potential with numerous red flags and potential grey swan events.

Our idea screen of the week takes a look at under the radar Canadian equities.

Welcome to the latest issue of the PRO Weekly Digest in which we publish highlights from our PRO coverage. Comment below or email us at pro-editors at to let us know what you think. Find past editions here. PRO subscribers can access interviews by following the SA Interviews account and view past interviews under the same account.

Click here to read the interview with Value Detective.

PRO idea playing out

Advanced Accelerator Applications (NASDAQ:AAAP) is up 120% since Gaurao Bhade shared his bullish thesis in March 2017 (ramp up of NETSPOT in the U.S., launching multiple products, wide moat as there are significant barriers to entry). Novartis clearly saw the value as last month it agreed to acquire AAAP.

Call from the archive - SEB

Seaboard (NYSEMKT:SEB) is ~unchanged since Donald Marchiony shared his bullish thesis in July 2017. However, as the recent earnings highlight the significant operating leverage and favorable environment (5% increase in revenue drove a 70% increase in EBIT due to higher pricing/volumes), and with the price target representing ~30% upside, this may be worth another look.

Noteworthy PRO articles

In addition to the top idea we published this week, we wanted to highlight one of our PRO editors' favorite PRO ideas this week:

SA Editor Jeffrey Fischer, CFA: Matt Gravitt argues that the market potential for La Jolla's (NASDAQ:LJPC) key therapy is overestimated, and expresses doubts regarding the methodology of the clinical trials. With shares near 52-week highs, LJPC is a short opportunity.

Idea screen of the week

Each week we use the PRO Idea Filter to find potential ideas based on a recent news event. This week, PRO Editor John Leonard, CFA looks at undervalued and under the radar Canadian equities.

Continuing with the international theme from last week’s PRO Weekly Digest, I ran a screen of PRO long ideas with Canada as the Country tag.

Two ideas turned up in this screen that might be of interest (prices as of November 16 close):

Maxar Technologies (NYSE:MAXR) by Cestrian Capital: Published on October 17, 2017, ~unchanged since publication, author's price target offers ~20% upside. MAXR should be re-rated higher over the next 12-18 months following a transformative merger with catalysts including a new NYSE listing, recently enhanced U.S. government accreditation and increased government/commercial spending on surveillance.

Mandalay Resources (OTCQB:MNDJF) by Itinerant: Published on October 8, 2017, down ~10% since publication, author's price target offers ~100% upside. As the market has overreacted to the flooding at one of its mines, the current valuation more than prices in the worst-case scenario and the stock trades at a significant discount to the value of its remaining mining assets.

About the PRO Weekly Digest

PRO members automatically receive the Weekly Digest and other PRO content in their inbox. If you are not a PRO member and would like to be notified of this, click "Follow" at the top of this article to follow the SA PRO Editors account, or click to subscribe to the free newsletter below to receive these in your inbox. You can view all past PRO Weekly Digests here. And if you're interested in SA PRO, check out the details here to sign up or learn more.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: Check with individual articles or authors mentioned for their positions.