The war in Ukraine has amped up fears all over the world, and investors are no exception. The S&P 500 is down more than 3% for the month of February, for instance. At times like these, it’s more important than ever to be selective about your holdings. Our defense plays are doing very well right now, as you’d expect during times of global tension. One key defense-sector ETF we’re watching is up nearly 9% for the month. Two of our most recent plays, Lockheed Martin Corp. (LMT) and Aerojet Rocketdyne Holdings (AJRD), are up 10% and 5% over the past few days. You can get up to speed on Michael’s most recent research right here.
Archive for February, 2022
Watch the biotech sector – that’s what we told you in Monday’s First Read. Major biotech firms have amassed a $1.7 trillion war chest ahead of what could be a record M&A spree in 2022, according to Fierce Biotech, and it’s only a matter of time before the money starts flowing.
And with this space heating up, there is one name that needs to be on your moneymaking watchlist as it works overtime on breakthrough drugs that could help cure some of the world’s most devastating medical conditions.
Here’s what I mean.
To date, there are over 7,000 identified rare diseases, including 200 rare cancers. Only 500 of those diseases are currently treatable – meaning the vast majority of the 300 million-plus people worldwide living with a rare disease have no way to get better. The number of people with one of these sicknesses is the equivalent to the third-largest country in the world. Many of them are children.
Until about 40 years ago, pharmaceutical companies had no incentive to develop treatments for these diseases other than out of the goodness of their heart. The cost to bring a drug to market far outweighed the profits that could be made from such a small fraction of society.
But everything changed with the Orphan Drug Act of 1983.
To incentivize companies to develop treatments for rare conditions that affect fewer than 200,000 patients, this new orphan drug program created a path for them to bring drugs to market up to 12X faster with significantly lower research and development (R&D) costs.
So, we’re talking tax credits, grants, discounted registration fees, and exclusive marketing rights to their orphan drug for up to seven years – enough to inject about $100 million into a company’s value, even before clinical trials.
You’re familiar with two of the leaders in orphan drug development, Pfizer Inc. (PFE) and AbbVie Inc. (ABBV).
You could forgive CEO Rick Gonzalez if he feels like gloating these days.
Back in June 2019, he announced that his biopharmaceutical firm was paying $63 billion to buy an Irish drug firm.
Gonzalez patiently explained to investors that the huge transaction would have a profound impact on his firm’s growth story.
Wall Street strongly disagreed, and Gonzalez watched as the stock sank 15% in a single session, erasing almost $20 billion in market value.
No doubt some of that selloff stemmed from fears that the deal would jeopardize the juicy dividend this firm had been paying for years.
Well, as the saying goes, look who’s laughing now – because the transaction was nothing short of transformative.
Fact is, the stock boasts a very nice yield of 4% and has beat the broad market by some 49%.
Sector Watch Big biotech ETFs saw explosive, trough-to-peak gains of at least 54% in 2020, thanks in large part to the record-fast development of coronavirus vaccines and therapies. In 2021 the sector was by and large flat, and so far in 2022,...
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He hasn't been at it very long, but Mark Zuckerberg is already giving the Metaverse a bad name. Meta Platforms Inc. (FB) missed Wall Street's forecast with profits of $10.3 billion and also reported slowing user growth, while the Reality Labs...
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Today, I want to let you in on one of the most exciting tech stocks of the year before it even hits the markets. Already valued at around $1.6 billion, this future tech leader is set to go public through a special-purpose acquisition company...
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Lockheed Martin Corp.’s (LMT) proposed merger with Aerojet Rocketdyne Holdings Inc. (AJRD) was a huge deal that we’ve been excited about from the start.
Now, the Biden Administration’s FTC has sued to block the merger and Aerojet officially dropped it yesterday.
No doubt on paper, the firm’s decision to be bought for $4.4 billion by one of the great aerospace and defense giants made a lot of sense.
Faced with rising R&D and other costs, industry leaders have been making large mergers for the past 30 years.
And you might be wondering why I still recommend this strong defense giant.
Despite this deal falling through, Lockheed Martin has several great catalysts for its stock as Russian aggression is proving the need for a robust U.S. military and billions of dollars in government-approved funding.
As tech investors, we know some of the biggest, most important tech companies in the world today started out in (very) humble garages. Their visionary founders worked hard, developed their ideas and products, and then boldly put them out there for the whole world to see. They didn’t do this alone – they had early investors backing them all the way. In the case of Apple, Microsoft, and many others, those earliest investors got the chance at life-changing wealth long before retail investors did. Now one of America’s most famous angel investors thinks history could be repeating itself in garages, dorm rooms, and labs across America. He’s investing $100,000 into small businesses like these because he believes the “next” Apple and Tesla are out there. He’s on a mission to find these up-and-coming visionaries before the world does, and he wants to know: Are you in or not?
A new Bank of America report is bound to shine a spotlight on bonds.
BofA is predicting the Fed may interest raise rates up to seven times this year, many moving yields from near zero to as much as 3%.
I bring this up because other analysts have suggested one of the reasons behind the recent tech selloff is rising bond yields.
Here’s the thing. If I were you, I would be very cautious about making big moves into bonds.
As yields rise, bond prices fall – meaning you could get hammered if you need to sell.
Moreover, with so much uncertainty in the air, I believe we’re likely to see a lot of volatility in bonds.
But what if you could find a tech leader who stands to gain from it all?
Technology is growing at such a fast pace that it can be overwhelming to keep up with the latest innovations – let alone identify which have the potential to change the world (and make you rich in the process).
So, starting today, we’re launching a brand-new perk exclusively for our Strategic Tech Investor readers called the Future Tech Watchlist.
Every week, we’ll bring you a new company that’s making waves in the tech sector so you can have it on our radar and – even better – get in early on what could be the next Apple Inc. (AAPL) or Microsoft Corp. (MSFT)… And get rich.
We’ve found the perfect pick to share with you today to kick off the series. It’s a company that’s been around since – get this – 1960.
I know what you might be thinking. Companies that have been around for 60-plus years don’t typically scream “next big innovator” that could bring you a huge windfall. And that’s part of what makes this pick so fascinating and filled with potential.
Last year, the company pulled in $3.7 billion in revenue in an emerging $260 billion robotics market.
Its automation tech covers a massive scope of industries – from artificial intelligence (A.I.) to 5G to defense to manufacturing, this company has automated just about everything.
But today, I want to focus on one of the biggest problems it’s helping to solve.
And that’s the fact that every year, corporations shell out $62 billion on workplace injuries.
This company’s cobot technology has the potential to turn that cost on its head by creating a safer workplace and putting that money right back into the bottom line of corporations around the world.