Editor’s note: If you’ve been following Genia’s advice in these pages… congratulations! Many of her early market calls on biotech and tech stocks have been nothing less than astonishing.
Today, Genia highlights a handful of those calls… and whether they’re still a buy at today’s levels. As you’ll see, it pays to follow Genia’s work…
Moderna (MRNA)
On January 27, I addressed the growing coronavirus scare… and advised readers to pay attention to Moderna, a recent IPO with promising technology… and a lot to prove.
Despite being one of the largest biotech IPOs on record, relatively few people had ever heard of it.
Now, it’s a household name.
Five weeks ago, on December 18, Moderna’s COVID-19 vaccine was granted emergency approval by the Food and Drug Administration (FDA). It was the second vaccine to receive such approval, only after the Pfizer-BioNTech vaccine, approved a week earlier.
The vaccine requires two shots just like Pfizer’s, but it has one significant advantage: it doesn’t require ultra-cold temperatures for storage.
The fact the company was able to create and manufacture millions of doses of its vaccine in record time (and compete with the big players) tells us volumes about the strength and promise of the technology behind the vaccine.
This technology is called messenger RNA (mRNA).
The mRNA method is akin to sending a message to your genes, telling them what to do (and what not to do).
This technology isn’t unique to Moderna: the Pfizer-BioNTech vaccine is based on it, too. But Moderna’s entire business is built around mRNA technology for a variety of vaccines (notably viruses and cancer), as well as treatments for autoimmune diseases.
From January 27 to December 8, MRNA returned 647% for investors.
Moderna’s stock has since lost some 25% of its value. I noted last month that the best of MRNA’s vaccine-related performance might already be behind it.
But if you still own the stock, I’d hold onto the position. There might be volatility ahead, but future growth is easy to see… The company has proved its leadership in mRNA technology… it’s financially strong… and it has 23 drug candidates in various stages of development—not to mention the COVID-19 vaccine already in use all over the world.
At current levels (around $130 per share), MRNA looks attractive as a core long-term biotech holding.
Avalara (AVLR)
Avalara is a company focused on helping online businesses collect sales tax.
Before you yawn, understand that this is an essential niche service: Different jurisdictions (cities, states and municipalities) have a variety of regulations—and online sellers must comply with all of them. In an economy that values online businesses at a significant premium to the market, AVLR still looks attractive—especially relative to its ecommerce peers.
The stock is up more than 70% since I first talked about it a year ago. But AVLR remains an attractive, albeit volatile, choice.
Thanks to COVID, the outlook for ecommerce is now stronger… and so is the outlook for sales taxes. AVLR is in a prime position to benefit.
AVLR is expected to become profitable in 2022… and analysts anticipate as much as $1.65 in per share profits by 2024.
Stay with the stock (if you’re already in) or start accumulating if you don’t own it yet… Avalara will continue to benefit from this economy and reward you long-term.
Lemonade (LMND)
Fintech company Lemonade is now worth 2.5x more (up 155%) than when I first mentioned it in November, and it’s up about 130% since its IPO (I recommended it on a post-IPO dip).
If you pull the high-tech curtain, Lemonade is essentially an insurance company, with a focus on rental and homeowners insurance… plus pet health. But its modern features (fast and easy sign up and fast and easy payouts), plus the fact that it specializes in rental insurance, make it attractive to young people.
Lemonade has shaken up a stodgy industry… and made traditional investors pay attention to the LMND and its prospects.
Fintech is a hot industry… and Lemonade uses a hot technology (blockchain) in its operations. Given the bullish crypto and fintech markets, the stock can rally even higher.
On January 11, the company announced a secondary IPO, offering three million shares of common stock. The secondary offering dilutes existing shareholders by some 6.5%, but it’s a smart move for the company… It’s using its high share price to improve its financial position.
Still, LMND took off too fast, too soon—and now looks primed for a bout of profit taking.
If you own LMND, I’d recommend taking some gains off the table at current levels. I suspect we’ll have many opportunities to buy it cheaper in the near future.
Advanced Micro Devices (AMD) and IBM (IBM)
In October, I recommended two equity plays on the digital currency and blockchain trend: AMD and IBM.
These stocks rallied double digits in just a few weeks. If you bought at my recommendation, you’re sitting on about 17% and 21% gains, respectively.
AMD is a leading (next to Intel) semiconductor company. It has a growing stake both in the central processing unit (CPU) and graphic processing unit (GPU) markets. AMD is profitable… and looks poised to more than double its per-share profits by 2024.
While AMD trades near all-time highs, it’s still attractive: It offers market-beating growth and good exposure to major long-term trends (data consumption, IoT, artificial intelligence, and of course, the growth of digital currencies, including bitcoin).
IBM has been working on making blockchain technologies a growing part of its business. Meanwhile, the stock trades at just 11x forward earnings and yields 5%. It might not have a growth outlook as bright as AMD, but it’s a good income bet at these levels.
Editor’s note:
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