Spread & Containment
Needham: 3 Conviction Buy Stocks to Snap up Now
Needham: 3 Conviction Buy Stocks to Snap up Now
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For investors feeling perplexed by the stock market’s roller coaster ride in 2020, you’re not alone. Following up a week that saw volatility make a comeback, stocks popped for the third session in a row on June 16, surging on a historic gain in retail sales and progress on a possible COVID-19 treatment. Rumors that the Trump administration is preparing a $1 trillion infrastructure bill also helped fuel the charge forward. That said, the rally came as investors brushed off reports of a cluster of new COVID-19 cases in the U.S. and China.
Against this backdrop, finding investing inspiration can seem like a formidable task. The analysts from investment firm Needham, however, argue that even in such a confused financial environment, there are still compelling plays. Recently publishing its list of Conviction Buys, the firm, which scores a top ten spot on TipRanks’ ranking of Top Performing Research Firms, highlights several names it believes are set to outperform the broader market.
To get the rest of the Street’s take, we ran three of Needham’s picks through TipRanks’ database. As it happens, the broader analyst community is also on board, with each ticker earning a “Strong Buy” consensus rating. Not to mention substantial upside potential is also on the table.
Revance Therapeutics (RVNC)
First up we have Revance Therapeutics, which is a biotech company that is primarily focused on aesthetic and therapeutic products, including its investigational neuromodulator asset, DaxibotulinumtoxinA for injection. After announcing a new partnership, Needham thinks the healthcare name’s future is bright.
Representing the firm, analyst Serge Belanger cites its collaboration with Mylan as a key component of his bullish thesis. He reminds investors that the two companies first entered into a license agreement to develop a Botox biosimilar back in February 2018. This deal saw RVNC receive $25 million upfront, which was part of up to $100 million in regulatory and development milestones, with it eligible for up to $225 million in sales milestones and sales royalties.
Now, Mylan has decided to move forward with the collaboration, with it set to pay RVNC $30 million in cash as part of the opt-in decision. “Mylan's opt-in decision, along with the $30 million payment, is a vote of confidence for the development plan and market opportunity of the Botox biosimilar program. The collaboration allows RVNC to focus on the upcoming product launches (Daxi and Teoxane fillers) and the continued development of Daxi, while MYL takes on an increasing role to move the Botox biosimilar program forward,” Belanger explained.
As per the terms of the extended agreement, RVNC will be responsible for non-clinical development activities, clinical development for North America, the manufacturing and clinical supply of the drug, while Mylan will take on all ex-U.S. development and all commercialization activities. Approval, which could come via the 351(k) regulatory pathway, “would provide a biosimilar Botox product with access to the $3.6 billion Botox global market that includes all 13 FDA-approved Botox indications.” It should be noted that this product wouldn’t compete with Daxi, which will most likely “create a stand-alone long-acting premium neuromodulator market segment separate from current short-acting products”, in Belanger’s opinion.
The analyst added, “This is another successful milestone in a catalyst-rich 2020 for RVNC.” These catalysts include the launch of the Teoxane filler in Q3 2020, readout of the Phase 3 Daxi trial in cervical dystonia and the November 25 PDUFA for Daxi (glabellar lines).
In line with his bullish take, Belanger reiterated a Buy call and $36 price target. Should the target be met, a twelve-month gain of 58% could be in store. (To watch Belanger’s track record, click here)
Do other analysts agree with Bellanger? As it turns out, most do. 5 Buy ratings and a single Hold add up to a Strong Buy analyst consensus. At $28.20, the average price target indicates 23% upside potential. (See Revance stock analysis on TipRanks)
G1 Therapeutics (GTHX)
With a team that brings a deep understanding of the biology of cancer and extensive drug discovery, development and commercialization experience to the table, G1 Therapeutics wants to develop therapies for patients battling cancer. As the company has been able to progress on schedule despite COVID-19, Needham has been thoroughly impressed.
5-star analyst Chad Messer tells clients that GTHX is still expected to file a trilaciclib (trila) NDA in Q2 2020 and an MAA in Q4 2020 for myelopreservation in small cell lung cancer (SCLC). This means that a PDUFA date would be handed out in Q3 2020. The analyst points out that the asset has already been given Breakthrough status by the FDA thanks to its ability to preserve the bone marrow of patients receiving marrow toxic chemotherapy.
Expounding on this, Messer said, “The filing timing is unaffected by the COVID pandemic and the company has all the required data. G1 intends to market trila in the U.S. for SCLC by itself and seek an ex-U.S. partner while expanding the treatment into other tumor types and in combination with other chemotherapeutics.”
Additionally, its Phase 3 program in CRC is moving right on track, and GTHX announced that trila would be included in the I-SPY trial for breast cancer, which should kick off this quarter.
If that wasn’t enough, the monotherapy arm of the Phase 1/2 study evaluating rintodestrant is fully enrolled. “The ~40 patient combination expansion cohort (rintodestrant + palbociclib) will use the same sites and is expected to begin enrollment this quarter... Updated data from the monotherapy portion of the trial is expected Q3 2020,” Messer commented.
With its $242 million cash runway set to support the company’s operations into Q4 2021, the deal is sealed for Messer. As a result, he left a Buy rating and $74 price target on the stock. This target suggests shares could soar 252% in the next year. (To watch Messer’s track record, click here)
All in all, other analysts are on the same page. 3 Buys and no Holds or Sells add up to a Strong Buy consensus rating. Based on the $59.67 average price target, the upside potential comes in at 175%. (See GTHX stock analysis on TipRanks)
NeoGenomics (NEO)
As a cancer diagnostics and pharma services company, NeoGenomics offers diagnostic, prognostic and predictive testing services to oncologists, pathologists, pharmaceutical companies and academic centers. With it recently entering into a new strategic collaboration, Needham argues that NEO’s long-term growth narrative is strong.
On May 26, NEO revealed that it would be partnering with Inivata to commercialize the InVisionFirst-Lung liquid biopsy test for treatment selection among non-small cell lung cancer (NSCLC) patients within the U.S. The product is a blood-based, next-generation sequencing (NGS) test that’s focused in NSCLC and performed on Inivata's patented liquid biopsy platform, InVision.
Covering the stock for Needham, five-star analyst Stephen Unger points out that InVisionFirst-Lung has been given a final Medicare coverage decision, effective April 8, 2020, with the contract rate expected to land at $3,500 per test. Looking at the terms of the agreement, NEO will invest $25 million that will be paid in two installments of $12.5 million, with NEO also getting a seat on Inivata's board of directors. This equity investment puts NEO’s stake in Inivata at just under 20%.
Along with the commercial rights, “NEO and Inivata will collaborate to advance the InVision liquid biopsy platform (i.e., Inivata's RaDaR assay for residual disease and recurrence monitoring) with pharmaceutical services customers.”
Weighing in on this development, Unger noted, “We view the collaboration as a clear strategic positive for NEO, demonstrating the unique value of the company's commercial scale and national presence, which encompasses all aspects of cancer diagnostic testing. The InVisionFirst-Lung liquid biopsy test is complementary to NEO's NeoTYPE Cancer Profiles (NGS tests for solid tumors) and NeoLAB Heme (NGS liquid biopsy plasma-based tests for hematologic diseases).”
As the companies are also expected to split the profits from tests performed evenly, Unger decided to stay with the bulls. To this end, he maintained a Buy rating and $33 price target. This target conveys his confidence in NEO’s ability to surge 16% in the next year. (To watch Unger’s track record, click here)
Like Unger, other analysts also take a bullish approach. NEO’s Strong Buy consensus rating breaks down into 3 Buys and zero Holds or Sells. Given the $33.67 average price target, the upside potential lands just above Unger’s forecast at 19%. (See NeoGenomics stock-price forecast on TipRanks)
To find good ideas for healhcare stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
The post Needham: 3 Conviction Buy Stocks to Snap up Now appeared first on TipRanks Financial Blog.
Spread & Containment
The Coming Of The Police State In America
The Coming Of The Police State In America
Authored by Jeffrey Tucker via The Epoch Times,
The National Guard and the State Police are now…
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Authored by Jeffrey Tucker via The Epoch Times,
The National Guard and the State Police are now patrolling the New York City subway system in an attempt to do something about the explosion of crime. As part of this, there are bag checks and new surveillance of all passengers. No legislation, no debate, just an edict from the mayor.
Many citizens who rely on this system for transportation might welcome this. It’s a city of strict gun control, and no one knows for sure if they have the right to defend themselves. Merchants have been harassed and even arrested for trying to stop looting and pillaging in their own shops.
The message has been sent: Only the police can do this job. Whether they do it or not is another matter.
Things on the subway system have gotten crazy. If you know it well, you can manage to travel safely, but visitors to the city who take the wrong train at the wrong time are taking grave risks.
In actual fact, it’s guaranteed that this will only end in confiscating knives and other things that people carry in order to protect themselves while leaving the actual criminals even more free to prey on citizens.
The law-abiding will suffer and the criminals will grow more numerous. It will not end well.
When you step back from the details, what we have is the dawning of a genuine police state in the United States. It only starts in New York City. Where is the Guard going to be deployed next? Anywhere is possible.
If the crime is bad enough, citizens will welcome it. It must have been this way in most times and places that when the police state arrives, the people cheer.
We will all have our own stories of how this came to be. Some might begin with the passage of the Patriot Act and the establishment of the Department of Homeland Security in 2001. Some will focus on gun control and the taking away of citizens’ rights to defend themselves.
My own version of events is closer in time. It began four years ago this month with lockdowns. That’s what shattered the capacity of civil society to function in the United States. Everything that has happened since follows like one domino tumbling after another.
It goes like this:
1) lockdown,
2) loss of moral compass and spreading of loneliness and nihilism,
3) rioting resulting from citizen frustration, 4) police absent because of ideological hectoring,
5) a rise in uncontrolled immigration/refugees,
6) an epidemic of ill health from substance abuse and otherwise,
7) businesses flee the city
8) cities fall into decay, and that results in
9) more surveillance and police state.
The 10th stage is the sacking of liberty and civilization itself.
It doesn’t fall out this way at every point in history, but this seems like a solid outline of what happened in this case. Four years is a very short period of time to see all of this unfold. But it is a fact that New York City was more-or-less civilized only four years ago. No one could have predicted that it would come to this so quickly.
But once the lockdowns happened, all bets were off. Here we had a policy that most directly trampled on all freedoms that we had taken for granted. Schools, businesses, and churches were slammed shut, with various levels of enforcement. The entire workforce was divided between essential and nonessential, and there was widespread confusion about who precisely was in charge of designating and enforcing this.
It felt like martial law at the time, as if all normal civilian law had been displaced by something else. That something had to do with public health, but there was clearly more going on, because suddenly our social media posts were censored and we were being asked to do things that made no sense, such as mask up for a virus that evaded mask protection and walk in only one direction in grocery aisles.
Vast amounts of the white-collar workforce stayed home—and their kids, too—until it became too much to bear. The city became a ghost town. Most U.S. cities were the same.
As the months of disaster rolled on, the captives were let out of their houses for the summer in order to protest racism but no other reason. As a way of excusing this, the same public health authorities said that racism was a virus as bad as COVID-19, so therefore it was permitted.
The protests had turned to riots in many cities, and the police were being defunded and discouraged to do anything about the problem. Citizens watched in horror as downtowns burned and drug-crazed freaks took over whole sections of cities. It was like every standard of decency had been zapped out of an entire swath of the population.
Meanwhile, large checks were arriving in people’s bank accounts, defying every normal economic expectation. How could people not be working and get their bank accounts more flush with cash than ever? There was a new law that didn’t even require that people pay rent. How weird was that? Even student loans didn’t need to be paid.
By the fall, recess from lockdown was over and everyone was told to go home again. But this time they had a job to do: They were supposed to vote. Not at the polling places, because going there would only spread germs, or so the media said. When the voting results finally came in, it was the absentee ballots that swung the election in favor of the opposition party that actually wanted more lockdowns and eventually pushed vaccine mandates on the whole population.
The new party in control took note of the large population movements out of cities and states that they controlled. This would have a large effect on voting patterns in the future. But they had a plan. They would open the borders to millions of people in the guise of caring for refugees. These new warm bodies would become voters in time and certainly count on the census when it came time to reapportion political power.
Meanwhile, the native population had begun to swim in ill health from substance abuse, widespread depression, and demoralization, plus vaccine injury. This increased dependency on the very institutions that had caused the problem in the first place: the medical/scientific establishment.
The rise of crime drove the small businesses out of the city. They had barely survived the lockdowns, but they certainly could not survive the crime epidemic. This undermined the tax base of the city and allowed the criminals to take further control.
The same cities became sanctuaries for the waves of migrants sacking the country, and partisan mayors actually used tax dollars to house these invaders in high-end hotels in the name of having compassion for the stranger. Citizens were pushed out to make way for rampaging migrant hordes, as incredible as this seems.
But with that, of course, crime rose ever further, inciting citizen anger and providing a pretext to bring in the police state in the form of the National Guard, now tasked with cracking down on crime in the transportation system.
What’s the next step? It’s probably already here: mass surveillance and censorship, plus ever-expanding police power. This will be accompanied by further population movements, as those with the means to do so flee the city and even the country and leave it for everyone else to suffer.
As I tell the story, all of this seems inevitable. It is not. It could have been stopped at any point. A wise and prudent political leadership could have admitted the error from the beginning and called on the country to rediscover freedom, decency, and the difference between right and wrong. But ego and pride stopped that from happening, and we are left with the consequences.
The government grows ever bigger and civil society ever less capable of managing itself in large urban centers. Disaster is unfolding in real time, mitigated only by a rising stock market and a financial system that has yet to fall apart completely.
Are we at the middle stages of total collapse, or at the point where the population and people in leadership positions wise up and decide to put an end to the downward slide? It’s hard to know. But this much we do know: There is a growing pocket of resistance out there that is fed up and refuses to sit by and watch this great country be sacked and taken over by everything it was set up to prevent.
Spread & Containment
Another beloved brewery files Chapter 11 bankruptcy
The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.
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Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.
It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.
Related: Fast-food chain closes more stores after Chapter 11 bankruptcy
The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business.
And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.
During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.
Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.
Image source: Shutterstock
Covid is not the only reason for brewery bankruptcies
While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,
Beer sales have fallen to their lowest levels since 1999 and some industry analysts
"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.
Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.
Another brewery files Chapter 11 bankruptcy
Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11.
"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," USCourts.gov explained.
Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors.
The popular brewery operates three taprooms and sells its beer to go at those locations.
"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.
The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).
Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.
bankruptcy pandemic social distancing
Spread & Containment
Revving up tourism: Formula One and other big events look set to drive growth in the hospitality industry
With big events drawing a growing share of of tourism dollars, F1 offers a potential glimpse of the travel industry’s future.
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In late 2023, I embarked on my first Formula One race experience, attending the first-ever Las Vegas Grand Prix. I had never been to an F1 race; my interest was sparked during the pandemic, largely through the Netflix series “Formula 1: Drive to Survive.”
But I wasn’t just attending as a fan. As the inaugural chair of the University of Florida’s department of tourism, hospitality and event management, I saw this as an opportunity. Big events and festivals represent a growing share of the tourism market – as an educator, I want to prepare future leaders to manage them.
And what better place to learn how to do that than in the stands of the Las Vegas Grand Prix?
The future of tourism is in events and experiences
Tourism is fun, but it’s also big business: In the U.S. alone, it’s a US$2.6 trillion industry employing 15 million people. And with travelers increasingly planning their trips around events rather than places, both industry leaders and academics are paying attention.
Event tourism is also key to many cities’ economic development strategies – think Chicago and its annual Lollapalooza music festival, which has been hosted in Grant Park since 2005. In 2023, Lollapalooza generated an estimated $422 million for the local economy and drew record-breaking crowds to the city’s hotels.
That’s why when Formula One announced it would be making a 10-year commitment to host races in Las Vegas, the region’s tourism agency was eager to spread the news. The 2023 grand prix eventually generated $100 million in tax revenue, the head of that agency later announced.
Why Formula One?
Formula One offers a prime example of the economic importance of event tourism. In 2022, Formula One generated about $2.6 billion in total revenues, according to the latest full-year data from its parent company. That’s up 20% from 2021 and 27% from 2019, the last pre-COVID year. A record 5.7 million fans attended Formula One races in 2022, up 36% from 2019.
This surge in interest can be attributed to expanded broadcasting rights, sponsorship deals and a growing global fan base. And, of course, the in-person events make a lot of money – the cheapest tickets to the Las Vegas Grand Prix were $500.
That’s why I think of Formula One as more than just a pastime: It’s emblematic of a major shift in the tourism industry that offers substantial job opportunities. And it takes more than drivers and pit crews to make Formula One run – it takes a diverse range of professionals in fields such as event management, marketing, engineering and beyond.
This rapid industry growth indicates an opportune moment for universities to adapt their hospitality and business curricula and prepare students for careers in this profitable field.
How hospitality and business programs should prepare students
To align with the evolving landscape of mega-events like Formula One races, hospitality schools should, I believe, integrate specialized training in event management, luxury hospitality and international business. Courses focusing on large-scale event planning, VIP client management and cross-cultural communication are essential.
Another area for curriculum enhancement is sustainability and innovation in hospitality. Formula One, like many other companies, has increased its emphasis on environmental responsibility in recent years. While some critics have been skeptical of this push, I think it makes sense. After all, the event tourism industry both contributes to climate change and is threatened by it. So, programs may consider incorporating courses in sustainable event management, eco-friendly hospitality practices and innovations in sustainable event and tourism.
Additionally, business programs may consider emphasizing strategic marketing, brand management and digital media strategies for F1 and for the larger event-tourism space. As both continue to evolve, understanding how to leverage digital platforms, engage global audiences and create compelling brand narratives becomes increasingly important.
Beyond hospitality and business, other disciplines such as material sciences, engineering and data analytics can also integrate F1 into their curricula. Given the younger generation’s growing interest in motor sports, embedding F1 case studies and projects in these programs can enhance student engagement and provide practical applications of theoretical concepts.
Racing into the future: Formula One today and tomorrow
F1 has boosted its outreach to younger audiences in recent years and has also acted to strengthen its presence in the U.S., a market with major potential for the sport. The 2023 Las Vegas race was a strategic move in this direction. These decisions, along with the continued growth of the sport’s fan base and sponsorship deals, underscore F1’s economic significance and future potential.
Looking ahead in 2024, Formula One seems ripe for further expansion. New races, continued advancements in broadcasting technology and evolving sponsorship models are expected to drive revenue growth. And Season 6 of “Drive to Survive” will be released on Feb. 23, 2024. We already know that was effective marketing – after all, it inspired me to check out the Las Vegas Grand Prix.
I’m more sure than ever that big events like this will play a major role in the future of tourism – a message I’ll be imparting to my students. And in my free time, I’m planning to enhance my quality of life in 2024 by synchronizing my vacations with the F1 calendar. After all, nothing says “relaxing getaway” quite like the roar of engines and excitement of the racetrack.
Rachel J.C. Fu does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.
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