October 21, 2021

Portfolio Changes:
Glaukos (GKOS) – MOVE FROM BUY TO HOLD

Resilience Matters
In a person, company, country, or stock, resiliency matters. For example, with disruptions related to the pandemic and supply-chain chaos all around us, some will navigate better than others. U.S. stocks have been rising despite coping with the effects of inflation, a slowing Chinese economy and supply-chain disruptions on the technology industry. Stocks have gained in recent days on strong earnings reports. Labor shortages, higher prices for raw materials and supply-chain issues haven’t substantially impacted profits.

Of the 80 companies on the S&P 500 to have reported through Wednesday, 81% topped analysts’ earnings forecasts, according to FactSet, which is better than the three-quarters that did so each quarter in 2019.

Explorer stocks are trending up, with some exceptions. Recent idea Else Nutrition (BABYF) took a hit early last week after raising capital and diluting shareholders. This is a young company and speculative stock. On the other hand, Sea Limited (SE) continued its strength and Cloudflare (NET) is now up 138% so far this year. Novonix (NVNXF) is getting back in form and nudged upward from 4 to 4.4 as it hopefully moves back to its year high, making it one of our best ideas for 2021.

Please find below our full portfolio update. I’ll have another new idea for you next week.

Portfolio Updates
Bombardier Inc. (BDRBF) shares were quiet in their first week in the portfolio as private aviation scales up as commercial flights become more undependable and inconvenient.

Bombardier is a global leader in aviation with a niche in private and corporate markets. Headquartered in Montréal, Canada, Bombardier is active in more than 12 countries and supports a worldwide fleet of more than 4,900 aircraft in service with a variety of multinational corporations, charter and fractional ownership providers, governments and private individuals. The new Challenger 3500 aircraft is ideally suited to meet a growing demand for business travel. An evolution of the best-selling Challenger 350 aircraft, the Challenger 3500 business jet boasts a redesigned interior.

Bombardier said it had received a firm order worth $534 million for 20 units of an upgraded variant of its Challenger 350 aircraft, marking its biggest business jet deal this year. The company now has total cash of $3 billion dollars and manageable debt load of $8 billion. Momentum for the sector and company is picking up and the stock is in a clear positive trend. BUY A HALF

ChargePoint Holdings (CHPT) shares are in an uptrend, going from 18 to 21 over the last two weeks. The stock is well below its 52-week high of 46 even though it reported that the most recent quarterly revenue grew 61% year over year. ChargePoint has developed an EV-charging network that offers drivers in North America and Europe more than 118,000 places to power up their EVs, and has 200,000 partner ports.

This lead is a huge advantage because of partner network effects so while competition is intense, I believe that the stock can be accumulated at its current levels with a medium-term outlook. BUY A HALF

Cloudflare (NET) shares are up 138% so far in 2021 and went from 163 to 175 this past week. It is still one my favorite stocks given its aggressive sales strategy, the company is protected by several moats, recently signed a deal with Microsoft, and the co-founders are still heavily involved. Cloudflare provides network security, performance and reliability services to a growing portion of global web traffic. I’m going to keep this a hold though more aggressive investors can add to their position. The company will report earnings on November 4. HOLD A HALF

Else Nutrition Holdings (BABYF) shares took a hit late last week after the company raised $17.3 MM, causing some dilution to investors. The stock was at 1.80 midweek and is now at 1.58. Else is a young, Israeli-based, plant-based food and nutritional company aimed at babies and toddlers. According to eMarketer, Walmart’s U.S. e-commerce sales prior to the pandemic were $30 billion and are projected to hit over $64 billion by the end of 2021. During the year, sales have grown through increased customer demand for eating at home.

Else bypasses all the hormones, pesticides, chemicals, dairy, soy issues since it is made from almonds, buckwheat and tapioca. The stock is young, but a reason for optimism is that institutional investors have a very small proportion of issued stock and management owns 41% of the shares. Finally, Else may expand the brand to post-toddler nutrition and nutritional drinks. It’s a good story, but maybe not if you’re a more conservative investor. I recommend most investors have a 25% stop-loss in place and recognize that this is a speculative stock. Aggressive investors can buy the stock or just hold for a potential recovery. BUY A HALF

Fisker Inc. (FSR) shares were flat as the company announced it will report earnings on November 3. Fisker offers investors a custom, “asset light” and “Apple of autos” strategy relative to EV maker leaders like Tesla. Its Ocean EV has a sub-$40,000 retail price point, making it a more affordable EV option, but we have to accept that the company’s first product won’t be launched until the latter part of 2022. This is an aggressive stock but I confirm a buy rating on Fisker. BUY A HALF

Glaukos (GKOS) shares gapped a bit on Monday but finished the week at 46 as the company will release earnings on November 4. Based in Laguna Hills, California, Glaukos is a medical technology company focused on innovative therapies for the treatment of glaucoma, corneal disorders and retinal diseases. Glaukos’ revolutionary product is the iStent, a tiny L-shaped titanium implant. New product launches will expand its market opportunities, as will acquisitions and expansion into international markets. The pandemic is impacting growth longer than expected so I’m moving this stock to a hold. MOVE FROM BUY A FULL TO HOLD

Marvell Technology Group (MRVL) shares added two points this week, going from 65 to 67. Marvell’s semiconductor chips are used in several fast-growing applications such as 5G wireless networks, cloud computing, automotive, and industrial markets. Marvell announced shipments of automotive ethernet ports could jump from an estimated 234 million units last year to 1.37 billion units in 2026, for compound annual growth rate of 39%.

Several Wall Street analysts have raised estimates and Credit Suisse recently upgraded the stock, calling Marvell “one of the most strategic assets“ in semiconductors. Marvell’s semiconductor products are state-of-the-art and in high demand, allowing businesses and consumers to take advantage of 5G capabilities I recommend buying at current prices if you have not already done so. BUY A HALF

Novonix (NVNXF) shares had another good week as the stock seeks to get back to, 5 going from 4 to 4.4 over the last week. The company’s mission is to support the global deployment of lithium-ion battery technologies for a cleaner energy future.

Based in Australia, the technology and advanced materials supplier is focused on synthetic graphite for the electric vehicle and storage battery industry. Novonix is a non-Chinese synthetic graphite producer, making it immune to any potential disruptions caused by either Chinese politics or its international trade disputes. Novonix has quite a bit of technical brainpower behind it. This is an aggressive idea but this stock is a play on an important clean technology. BUY A HALF

Palantir Technologies (PLTR) shares are on hold due to a lack of momentum, trading at about 50% off their high. However, this “big data” market opportunity is massive and could lead to growth in the years ahead.

Double-digit sales growth and the expectation that the company may turn its first annual profit in 2021 may spur the stock forward. Palantir’s stock currently trades at 35 times this year’s sales and is driven by its two core platforms: Gotham, which serves government clients; and Foundry, which provides lighter versions of those services for enterprise clients. Its third platform, Apollo, provides cloud-based updates to both platforms. HOLD A HALF

Sea Limited (SE) shares were up 10 points, reaching 360. The company expects that its e-commerce revenue will grow 121% in 2021. I would be an incremental buyer of this stock but longtime holders should definitely take partial profits. I have been a bit cautious on this stock but I’m getting close to a full buy. BUY A HALF

Veeco (VECO) shares ended where they began in a bit of choppy trading this week. This is an American high quality provider of state-of-the-art semiconductor fabrication equipment. The company delivers the leading edge technology to U.S.-based and international high-end class chipmakers, some of which are 100% reliant on Veeco technology. Revenue growth for 2021 may be up 30% and even better for earnings. Veeco is growing earnings at a 20% clip and represents a backdoor play on semiconductors.

I recommend that you acquire shares if you have not already done so. BUY A HALF

Virgin Galactic (SPCE) shares were buffeted by some delays that are wearing on investors as the stock then held firm at 20. I’m still bullish on this high-risk stock that seems to put safety above all else. However, I am a bit concerned over insider selling and timing going forward. I believe a hold rating is appropriate for the time being. HOLD A HALF