Sunday Market Prep (#6)
Dear Reader,
Let’s make the most of the last trading day in Q2.
Follow-up highlights:
Titanium Dioxide:
You may have spotted NL 0.00%↑ technical breakdown early in the week. I did step in to buy (and scalp most of) those shares.
I sold my KRO 0.00%↑ because I learned that titanium dioxide is anti-MAHA as a food additive, the latest headwind with a few large manufacturers now backing away from demand.
I also learned that NL 0.00%↑ holds about $20mm worth of VHI 0.00%↑ shares that I wasn’t accounting for, which makes it an even easier choice for me to go with NL 0.00%↑.
GEOS 0.00%↑: I sold out into the skyrocketing price as I was skeptical that the new contract was that valuable. Since then, Henrik Alex on Seekingalpha has suggested the same. It turns out the reason the price and volume soared so much is that Jim Rickards recommended it in his private newsletter.
TAP 0.00%↑: I picked up a full 5% position this week. I had ChatGPT research do a “conservative but fair” DCF using a 12% discount rate and it literally came up with the exact current share price.
CRWS 0.00%↑: I dumped it at the open after earnings came out. Looked pretty rough.
I picked up a new ~2% position in B 0.00%↑
Ideas for the week ahead:
CRMD 0.00%↑ dumped on news of a secondary offering. The secondary was priced around $12.80 for around 10% dilution, but the stock now trades at $12.50. Sure, I get it, shareholders hate dilution in general, but this seems like an overreaction to me. This is a high-risk, high-reward situation: the company produces a solution to reduce the risk of catheter-related blood stream infections. There is solid science and management just raised their sales guidance, but the catch is that we are on a “new product pricing bonus” and it’s not clear where pricing will stabilize long-term. I have a 3%+ position. You can read more here:
GMAB 0.00%↑ I picked up a ~2% position last week. Genmab is an innovative, founder-led biotechnology company focused on antibody therapeutics for cancer treatment. It currently trades at ~11x 2026 consensus earnings with ~25% of its current market cap in net cash. The elephant in the room is a patent cliff beginning in 2029 on its blockbuster drug, Darzalex. I’m betting on 1) generalist interest increasing in the short term, and/or 2) the CEO delivering long term.
DEO 0.00%↑ Dua Lipa recently posted a video of her “splitting the [Guinness] G”. With Diageo shares so bombed out, this reminds me of Zendaya’s Burberry moment, which I wrote about last year. At ~15x (likely-depressed) earnings estimates I will probably end up passing, personally — but I could see those estimates coming up and this stock re-rating 20%-30% higher without much trouble/time.
NSA 0.00%↑ I don’t talk about this often, but in a different life I did CRE portfolio (risk) analytics. So although I mostly avoid the sector, I do know a thing or two about REITs. And I’ve pretty much just been watching, waiting for the right price(s), which is hard because most REITs are overpriced scams. This self-storage REIT has been highlighted by Greenstreet for its superior governance, which is why I’ve followed it particularly closely. It now trades at approximately a 7-7.5 cap. This sector is trading depressed because it is having a hangover from new supply and aggressive rent increases during the Covid stimmies, but I think that rent growth will match inflation long term.
nice, alpha from every industry and every sector