3rd Quarter 2017 – Growth Portfolio Update

AXN – As mentioned in the recent Aoxing Pharmaceutical blog, I ended my position in this stock as the company announced a delisting of their common stock. The remaining proceeds have been reinvested into 22nd Century Group and TransEnterix Inc.

OBCI – Continuing to hold steady in this growth stock as it tracks towards $6. Key notables include expansion of manufacturing facility, entry into the pet cleaning market, established trend of year over year sales growth, and the recent special dividend.

SIFY – I hope you were able to benefit from the recent uptrend as I have! I have recently exited my position to lock in a 140% gain. I am weighing the option of waiting for the dip and settle or opening a new position in another company, such as XGTI or NSPR.

XXII – Continuing to add here and there. I am still excited about the growth potential here and believe it is only a matter of time until management begins signing deals and generating substantial revenue.

NVAX – Continuing to hold my position here with no increases or decreases in position.

TRXC – Opened a recent position during the quarter here as signs from my research point to a potentially large commercial opportunity if the FDA grants their Senhance robotics system approval.

Aoxing Pharmaceutical Company – AXN

The end of the road has been reached for this company! And I have to say, it will not be missed. Today, AXN has announced a deregistration of their common stock and eventual delisting. The main reason for this action gravitating towards the company’s financial woes.

So, what are some takeaways? A lack of communication between a company and its shareholders is one point that I would bring to light with AXN. The inability to keep investors aware of company activities, at a point when relying on investors may have helped the financial situation, could have played a role in the continuing decline of the stock price. Another takeaway is the revolving door of the chief financial officer position. It seemed every couple of years or so, a new CFO took the helm only to resign a couple years later.

The company continues to have potential in China. For now that remains to be seen…

 

22nd Century Group – XXII (update)

The FDA Center for Tobacco Products just did WHAT last week?!! If you haven’t heard by now, a low nicotine tobacco/cigarette policy initiative is being enacted by the FDA. The purpose, lowering nicotine in cigarettes to non-addictive levels which is the same purpose of XXII. Here’s a link. I wouldn’t be surprised if the “non-addictive” nicotine levels determined by the FDA are the same levels found in 22nd Century Group low nicotine products, such as Brand A, of less than one milligram.

If you have been following XXII, then you know how exciting this is as the company may have a monopoly on this technological ability and know the recent spike in share price is attributed to the market realizing the potential. Even Bloomberg has published an article highlighting the company. The question now is, can management turn this directive into a significant revenue generating opportunity? Of course, we will need to wait for specific details of how the FDA is to implement this initiative. In my opinion, I see a couple things that could possibly happen. One, tobacco companies will continue to sell both their regular brand and its low nicotine counterpart or two, cigarettes may be replaced altogether for electronic delivery systems. My guess is either of these transitions will happen over a long period of time. In this time, the tobacco arm of 22nd Century will continue its efforts on achieving FDA approval of their X-22 product and moving forward with clinical studies of their Brand B product.

I do not expect to see or hear much from XXII directly following this latest FDA development. Although it would be nice to hear that a partnership has been formed with another entity, for the purpose of financing the Phase 3 trial for X-22, and that just maybe the FDA announcement may have been an indirect driver. I still have some concern that currently the company may not find an agreeable partner for the phase 3 trial and may have to finance the trial with its own cash. If any developments are in the works, it should take at least a few months before a deal may be signed. Even with all that said there is still significant upside for any who may be contemplating an entry or adding more to their current position. I’m holding my price target of $3.50 until word of a possible deal becomes public. Time will tell…

 

A little fyi, regarding the Phase 3 “Strategies for Reducing Nicotine Content in Cigarettes” study, word is it may be a couple months (possibly October) before results are released.

EnSync, Inc. – ESNC (Watchlist?)

The prospect of solar power, a renewable resource for the next 4 or 5 billion years as long as there are humans left to use it, is an industry that is projected to triple in size over the next few years. This is according to the SEIA or Solar Energy Industries Association. This anticipated growth presents a great opportunity to find a well-managed and established company that can capitalize on this trend. Which brings me to EnSync Energy Systems (symbol ESNC). The small cap ESNC is one of many companies driven to enable its customers to harness solar energy, manage it, and distribute their excess collection of power into the power grid. The company describes itself as “a leading developer of innovative distributed energy resource (DER) systems and Internet of Energy (IoE) control platforms for the utility, commercial, industrial and multi-tenant building markets.”

One of the many things that has brought me to this company, like my other picks, is its technological potential. Tech that’s integrated with its products and is considered at the forefront in the industry. So much so that it has caught the interest of the much larger Schneider Electric. The company recently announced a collaboration agreement with Schneider to explore DER market opportunities. It will certainly be interesting to hear the full details or potential outcome of this agreement.

I have not started a position in EnSync, Inc., but am certainly keeping it on my watchlist. According to the latest quarterly report, they have cash on hand of $12.4 million, however the recent cash raise suggests it was not enough to support the financing of the new recent projects. Selling shares may be the option of choice for the company further depressing value which leads me to a sit and wait approach. Looking at the possible growth trajectory, factoring in the recent power purchase agreements (PPA’s), the partnership with Schneider Electric, and general growth of solar markets, I expect to see an increase of more than 100% in share price over the next couple years. Timing here is key. More details to come…

DryShips, Inc. – DRYS (Warning)

Dryships, Inc. is a company that would not make it onto my radar, but I wanted to share with you the incredible disaster that has enveloped the poor shareholders of this company and why research/education is always IMPORTANT. There are some good companies that may go through rough patches in share price and then there are bad companies, period.

DRYS, within the last couple of years, has gone through around 7 reverse stock splits! Just completed the last split today. Crazy! Market education explains that reverse stock splits, for the most part, are BAD news. In the case of DRYS, it’s a legal way for the company to cover up the severe stock dilution that’s occurring from the company selling shares, which explains the established downtrend in price.

If you’re considering this stock, I must do my part in warning you to STOP IT!! To those who managed to escape, congrats. It’s got to be brutal for those caught in its jaws while also hilarious to see the near 99% loss of share price value. Reading the severe rage and anger spewing from ‘bag-holders’ on media sites can be a comical getaway. I encourage you to watch this vessel sink from the safety of my other growth stocks and take some lessons in witnessing poor company management!

 

*July 20 Update*

Reverse split number 8 or so, is being enacted. This 7:1 stock split is again the companies latest attempt to keep their share price above $1 dollar to remain on the Nasdaq market. I expect dilution to continue. Be warned, STAY AWAY!

22nd Century Group – XXII (continued)

This is the second continuation blog about 22nd Century Group to talk about their industrial hemp arm of the company. I recommend reading my earlier blog, if you haven’t done so already. Disclaimer plugin, I’m not a professional and don’t expect the investor jargon and lingo after every other word. I try to keep this as simple as possible. Always do your own research.

As I mentioned earlier, this company’s second globally disruptive breakthrough is its success in producing hemp with 0% tetrahydrocannabinol (THC) via genetic engineering. Oh wait, I forgot to add 0% “guaranteed.” No guessing for the farmers nor the regulatory agencies when using seed produced and certified from XXII. Today’s global hemp producers and especially in the U.S. must grow hemp crop that contains less than 0.3% THC. Any more than that threshold results in the destruction of the entire crop. Because of that requirement, many crop insurers do not yet provide insurance for hemp growers, a possible severe loss for the farmer. For example, recently in Kentucky approximately $20K was ordered to be burned for exceeding the THC limit. Many industrial hemp seed suppliers tout 0.2% THC or less but any farmer and business will find comfort in a 100% guarantee of 0% THC over a less than 100% guess.

If you’ve been under a rock recently, let me be the first to tell you the medical marijuana and hemp industries have been re-emerging into the mainstream here in the US. Growing industrial hemp is still illegal at the federal level but many states have removed legal barriers to permit growing of hemp. Kentucky is the state that produces the most hemp today leading Colorado, Oregon, North and South Carolina, and New York just to name a few. The uses for hemp include a large range of products. In fact, the market for hemp products is projected to increase by as much as 700% by 2020 and includes medical marijuana uses. The revenue potential for 22nd Century group, through its Botanical Genetics subsidiary, could exceed hundreds of millions of dollars if their technology becomes the sole global source for industrial hemp.

In the position detail section, I have readjusted my target price to $3.50 from the previous $1.60 which has already been surpassed. The potential with XXII is extremely enormous in the short term from both the tobacco and hemp technologies! More details to come…

 

22nd Century Group – XXII

Disclaimer, first as always. I’m not a professional and don’t expect the investor jargon and lingo after every other word. I try to keep this as simple as possible.

22nd Century Group is hands down my favorite company to date in all the markets in regards to growth potential. I’ll go into detail below but, dare I say, this company has the potential to obtain monopolies, yes monopoly status, in two different billion-dollar industries across the globe with its’ technologies. The first being in the global tobacco & smoking cessation market and the second in industrial hemp. In this post, we’ll focus on the tobacco and nicotine technology potential.

If you’re not familiar with this company, allow me to catch you up on the buzz. Who is 22nd Century Group? In a nutshell, quoted from Yahoo Finance, they are a plant biotech company, providing technology that allows for the level of nicotine and other nicotinic alkaloids in tobacco plants to be decreased or increased through genetic engineering and plant breeding. It develops smoking cessation products and modified risk tobacco products for smokers who are unable or unwilling to quit smoking and who may be interested in cigarettes, which reduce exposure to nicotine or to certain tobacco smoke toxins and/or pose a lower health risk than conventional cigarettes. The results of these efforts has produced products such as Magic 0, very low nicotine (VLN) cigarettes sold in countries overseas, Red Sun, high nicotine cigarettes sold in the states and overseas, Spectrum, VLN research cigarettes sold to the gov’t and accredited research organizations, and the potential global blockbuster product X-22, their smoking cessation product in development. In fact, one of the objectives for 2017 is the pursuit of authorization from the FDA and regulatory agencies in other countries to introduce the X-22 smoking cessation aid in development into commerce as a prescription-based smoking cessation medical product. Basically, smokers will now have the first option to quit smoking by using a cigarette, with reduced levels of nicotine for dependence and it comes with no additional side effects, rather than using products like Chantix or Nicoderm CQ patches. The company has a meeting with the FDA this month of June regarding the path forward for X-22 and the company expects to submit a more robust  Modified Risk Tobacco Product (MRTP) application to the FDA for X-22 sometime in the following months. Also, XXII is also working towards finding a partner to conduct a Phase III smoking cessation clinical trial for X-22. It is anticipated that this will mean receiving a cash infusion of approximately $25 million or more from that partnership agreement for the trial and eventual distribution of X-22, an important catalyst for the stock.

In addition, here are more facts to consider about 22nd Century Group:

  • Yearly revenue growth above 40%, on track for same EOY 2017.
  • Cash on hand anticipated to last through April 2018.
  • Hedge fund Blackrock Inc. discloses new position in latest 13F holding.
  • Recent insider buying from Management, see latest SEC Form 4 filings.
  • Recent addition to Russell 2000 to be confirmed June 23, 2017

I classify 22nd Century Group as a relatively young company starting at when its current CEO Henry Sicignano, III first took the reigns. From what I gather in research, XXII’s previous leaders failed in guiding the company towards a profitable path. Henry has concrete experience from his time at Sante Fe Natural Tobacco Company and the current share price is reacting to the progress of his vision. Going forward, we can continue to expect very interesting and lucrative developments to come from 22nd Century Group and its transparent management. Upcoming catalysts should be the announcement of a partner for X-22 and possible industrial hemp deals, which I will discuss in my next blog. The current price target of $3.50, established by Chardan Capital Markets, will be due for an upgraded review once these catalysts have surpassed. Certainly more details to come.

Aoxing Pharmaceutical Company – AXN

The Chinese Pharmaceutical landscape is chock full of companies. Many with cutting edge developments and growing revenues. In particular, the demand for pain management medication is growing as the culture is slowly transitioning from one rooted in traditional beliefs and herbal therapies to one of pills and operations. I’m attributing this trend to advancements in therapies and western influence. This brings me to Aoxing Pharmaceutical.

Continue reading…

Getting Started!

In my beginnings as a novice investor in the market, many years were spent trying to identify a particular investment strategy that worked for me. Short term, swing, day trading, dividends, you name it, I tried it! Finally, after taking a step back and re-evaluating myself and the slew of trading methods available, I was best suited for long term growth. As you well know with any company in the global markets, research, education, and constant due diligence are essential tools in evaluating a potential candidate for your portfolio. I want to share with you some of my findings.