"Action speaks louder than words but not nearly as often." - Mark Twain
I hope everyone is having a nice Sunday. Moving a little slow here in the Jensen household today as had one too many of some fabulous ribs we grilled out on the patio last night. I did managed to do a hour on the elliptical this morning as "penance".
I also have a hour to kill before I head out to the links to sweat off some of the rest of the feast in 94 degree heat with 90% humidity. I wanted to share one more trading idea for the week ahead in biotech before I hack up the golf course.
This trade idea came to me watching and reading the news over the past 24 hours. It seems Miami is once again squarely in the national news cycle, and as usual, not in a good way.
Zika is dominating the local airwaves and is the headline story on Miami news programs as the virus has spread to Miami Beach, the hub of our tourist industry. It also has been a big story over the weekend in the NY Times and Wall Street Journal.
Federal health officials have started warning pregnant women and their partners not to travel to Miami Beach after Florida confirmed that the mosquito-borne Zika virus was active in the popular tourist destination. In addition, a new study from Rockefeller University and the La Jolla Institute for Allergy and Immunology the virus might affect other adults as well.
Obviously this is not good for the Miami economy especially as we are two months out to the start of the tourist season. However, it does present an actionable trade idea. It is very likely the increasing news coverage is going to boost a variety of "Zika" plays in trading this week.
The one I like to take advantage of this probability is Inovio Pharmaceuticals (NYSEMKT:INO). The company has a promising early stage Zika candidate in development. The stock also usually goes up every time concern around the virus spikes. As importantly, from the chart above; the shares seem to have technical support at current levels after a recent decline. H.C. Wainwright also slapped a Buy rating and $17 price target on the shares on August 10th.
I will be looking to pick some shares Monday in the $8.55 to $8.65 a share range with a stop loss at around $8.25. Using past spikes as a guide; I believe $9.50 is possible this week as the recent spread of Zika and the accompany spike in news stories around this event buoys the stocks in this disease area. I offer up the idea for consideration for investors looking for a trade with a favorable short term risk/reward profile.
Note: For a longer term investment idea, I will be publishing an 8 page report on a ~$6 biopharma stock that three analyst firms have issued price targets on in recent months that are triple the current price of the stock. This free report will go out in the next 48 hours and will be delivered into your "in" box if you register for it and other free weekly reports @ bretjenseninvests.com.
The shares have gained more than 14% since being the third selection within the Insiders Forum portfolio six weeks ago, but still have major upside potential. This pick is actually only the fourth biggest gainer so far of the eight selections in the portfolio. The Insiders Forum launched in late June and the selections have had an average return of exactly 11% so far. That is triple its benchmark, the Russell 2000 as of the close of trading Friday.
We are still giving out free two week trials to that service until we break into the Top Five of the 65 offerings on SeekingAlpha's Marketplace (We are currently #8). I encourage investors interested in attractive small & mid-cap stocks insiders have been buying to give our nascent offering a risk-free try. The full investment analysis for our ninth selection for the portfolio will be sent out at approximately 8pm EST today.
Thank You & Happy Hunting
Founder, Biotech Forum
Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in INO over the next 72 hours.