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Myomo Inc.

Myomo Inc.(MYO) is a medical robotics company which develops neuro-robotic technology. It’s based on patented technology developed at MIT and Harvard Medical School. Currently it has a MyoPro product line of myoelectric limb orthosis which help restore functions in the paralyzed or weakened arms and hands of individuals. It is a relatively new IPO. It went public in June, 2017. It is not exactly a great return on investment kind of stock so far. MYO is still trading a tad below its IPO price at the moment. One of the reasons that drove the share price lower last year, MYO did a secondary offering to shore up its balance sheet. As a result it diluted the stock value of shareholders back in November. However we still see growth potentials in this company as it is in the introduction stage. Its product is the only kind in the market. It has open Canada and EU markets recently. It has performed well so far into 2018. We have seen an impressive 40% increases in price YTD. It is not a bad entry point now as it is heading into its earnings (estimated date: Feb 12). We estimate it beats earnings on Q4, 2017. Before you decide to enter please also consider the risk of volatility in the price because MYO is a low float stock( its price could drop sharply if it fail to beat the earnings). Our price target is $7 in short term (within 6 months).

For your reference,

The link is its last 10-Q filing: http://otp.investis.com/clients/us/myomo_inc/SEC/sec-show.aspx?FilingId=12368574&Cik=0001369290&Type=PDF&hasPdf=1

P.S. We have a long position in this company. High volatility is expected in this equity, please invest with caution.

Blockchain Hype

Cryptocurrency exploded in 2017. It is one of the hottest topic among investors. There are more than 10 different cryptocurrencies you could invest in. There are going to be more cryptocurrencies in the future. Blockchain technology is the core of cryptocurrency. That is where some of the so called “blockchain” companies come in. Because of this blockchain hype, we saw some micro-cap stocks exploded in the final two months of 2017. Their share prices jumped to all time high of the year. These are some of tickers: MARA, DPW, RIOT, LFIN,LTEA,TEUM etc. The blockchain hype has become kind of ridiculous. For example, there was this Long Island Iced Tea Corp. changed its name to Long Blockchain Corp. last month. Its share price was instantly up over 200% in the same day. Moreover, there is a small cap finance company called Longfin. Its IPO price was $5, its share price soared to over 2000% after the news of acquiring a small blockchain company broke two days later. Most of these companies are not profitable. Also, they have very low public float which leads to extreme volatility in their stocks prices.  As a result, there were a lot of people trying to chase the hype and invest into these companies, ended up losing a lot of money. There is no doubt that some early birds made huge gains on their crypto investments. There might potentially be more opportunities in the field of digital currency as technology advancing further. As of now,  we still look at cryptocurrency as a very risky investment. If you really want to give it a try, we recommend to trade with caution and do not hold it overnight because most of these stocks are related to price of bitcoin, and bitcoin runs 24/7. Holding overnight could have risk due to decline from bitcoin’s price. After all, please do your own DD before any investments.

P.S. We will keep an eye on future development and revisit this technology at a later date. Have a great 2018 and happy investing!!

Technique 2

We talked about how to trade around a core position in last post. Today we’ll discuss about another technique called scalping. This technique is very effective when trade with volatile stocks. Because of the volatile nature of the stock, it comes with high risk as well. It is not recommended to beginner traders. First, you will need to find a low float stock which is trading with high volume. Generally, stocks with 20M or lower tradable shares are considered as low float. Here is the formula you can calculate the public float: Outstanding shares – restricted shares = public float. Secondly, after you pick out 1 or 2 stocks you are going scalping, you would need to see its pricing patterns. You should always try to buy in when the price is in decline pattern.Don’t worry if you were not able to get in at the lowest cost possible, 9 out of 10 the stock price would rebound to certain level. Once the price rebounds, we suggest to sell it  within 50 cents range. Because of the volatile nature, the price is very unstable. That’s why you would need to discipline yourself not to be greedy otherwise you may lose all gains in a blink of your eyes. Sell for small profit and come back in again when the price is on the decline pattern. Sometimes you could repeat the buy, sell, buy, sell, actions a couple more time within the same day if the volume and catalyst are there. Sure looks like a small profit, it does add up over time. Hope this could help you with your future investing.

P.S. This technique is suitable for experienced day traders. However, it is still a very risky technique. Please use it with caution. Happy investing!

Technique 1

I found this technique quite useful. I’ve been using it in some of my investments as well. First, you will need to find a company which you believe it has growth potential and you are willing to invest in for the long run. How to find that specific company? Do a fundamental analysis on the company and try to determine if the company’s share is fair value. (There will be a separate post on how to do fundamental analysis in the near term). Let’s say you did your due diligence and came to a conclusion that you are going to invest in this company. You would buy 100 shares at first. Then you purchase another 2 blocks of 50 shares over the next month or two. Now you have 200 shares in total. Because you are planning to keep this company in your portfolio for the long term, you could keep 100 shares  as your core position which means you will not sell those 100 shares in the near future. Stock price is never a straight line. There is always ups and downs. Now you have 200-100 = 100 shares left for you to trade around your core position. Some time later, if the share price goes up  to say 6%(any target price you have), then you may sell 25(any number you would like to sell) shares and profit in. If it goes up again, you could sell another 25 shares. After you sell all 100 shares, you  will have to wait for the price to come down. Once the price is close to the fair value that you estimated, you could buy back in again. Don’t purchase 100 shares at once. Try to break it down to blocks of 25 or 50. Don’t worry if you estimation is incorrect, you could always average down by buying shares lower than previous purchase. Please remember you still have your core position(100 shares) after all these trades. This might appear to be small income but over time the profits add up. In conclusion, it is a repetition of selling it when price goes up, and buy back when price drops.

P.S. While you are waiting for the price to drop, you still need to do your homework and keep up to date with your investment. Good news may trigger a pop whereas bad news could lead to a drop. Hope this could help, happy investing:)

Advanced Micro Devices Inc. After ER

We’ve been covering AMD for quite some time now. It is an interesting player in the semiconductor space.AMD reported its earnings after market closed on Tuesday. Its earnings and revenue both beat street’s estimates in Q3. Normally, if a company had a good ER beat, its share price would go up due to the hype. That is not the case this time around. AMD saw a significantly drop of price around 15% at one point right after the ER. As of today, it was closed at $11.84. What’s going on with the drop? During the conference call, AMD gave a prediction on decline of its sales revenue by 14% to 18% for Q4, which does not bode well with investors expectations. Also, there are some other factors that scared the investors away. Intel’s newly launched CPU was one. Moreover, spectators are still not convinced that AMD would be able to sustain its market shares versus tough competitions from NVDA and INTEL. Its huge debt on balance sheet does not help the situation either. All that being said, we are still bullish on AMD for the long run. It is a company which is working on turning itself around from the worse period in pre-2014. Its revenue and earnings are both improved from year over year. Here is a small sample: (source:ST.)

IMG_0810

New product lines are continue to roll out in 2018. We also believe that the revenue from data-centers are coming in later in the year as well. It is also doing a decent job on reducing debts. However, it is not going to be a smooth ride in the near future. The volatility is going to be high as it is still one of the most shorted stocks in tech. Think twice before you decide to jump in whereas there are other great blue chip stocks in tech:)

P.S. We have positions in the equity mentioned above. Also, other tickers will be covered in future posts.

Is the bubble going to burst?

Stock market has been bullish for quiet some time now. All the major indexes have hit all time highs this year. There are some saying that we are experiencing bubble in the stock market. There have been two major bubbles in the past 20 years. As the chart shows below( Thanks to the MSCI ):

chart

As you can see, there was the DotCom bubble back in 2000 and the housing bubble in 2008. It sure looks like we are at the edge of another bubble burst by seeing the pattern of the chart. What’s going to happen when stock market crash? Basically, there will be a drastic drop across sections in the stock market, in which would trigger investors panic selling to stop losses and push stocks prices lower. In worse case, it could cause a recession. However, we don’t see a crash happening any time soon. The world’s economy has been steadily recovered and growth since the last crash in 2008. There are some companies indeed over-valued in the market but not in such an alarming rate yet. As long as there is no sudden global event like wars among countries, which may trigger the burst. In the near future, we may see some correction which is a normal activity in the stock market. Overall, the market is still in a good place at the moment. We can’t predict what exactly is going to happen in the future, but opportunity would come for people who are prepared. We will revisit the situation next year.

Happy Investing:)

Switch Inc. ( SWCH )

We have our eyes on an upcoming IPO SWCH. Switch Inc. is a data center operator. What’s a data center? It is a facility which stores and manages data from organizations. We were not able to find too many details on its financials due to the private status. It is a profitable private company. Its revenue has a 20% gain from 2015 to 2016. It has long term loan at about $825M, however a lot of the loan has been invested into expansions. Currently, the company has 3 main campuses; it is eyeing to keep adding more facilities across the country. According to report by TechNavio, global data center market is projected to grow 11% annually over the next three years. There will be more data available as the society progress which means more data centers will be needed for organizations. It’s going to continue to be a profitable industry for years to come. This IPO is going to be starting at NYSE this Friday. We are planning to add it to our portfolio as soon as possible. For day traders, this might be a good chance to grab some gains from the hype (probably a two days windows), however we expect the price will settle down a bit after the hype of a new IPO. Long term value investors could wait and look for a more reasonable entry point once the price get closer to its intrinsic value. We will have a further discussion after more information is available to the public.

Updates on AMD

Some updates on Advanced Micro Devices Inc. (AMD):

AMD’s share price actually has down about 16% since the Q2 ER despite all the positive news so far this year. It is one of the most shorted stocks in the semiconductor space. It’s been a volatile stock historically as well. Before you decide to invest in AMD, please make sure your heart is ready for a roller coaster ride in the short term. It is going to be pretty volatile for some time since short interest is still extremely high at the moment. On a brighter side, AMD is continue its aggression on the market. New CPUs and GPUs lines are expected to hit the market during the rest of the year. Moreover, it has made some positive announcements with teaming up with various clients this year. Last week, AMD announced the collaboration with Amazon on use of AMD’s GPUs in their cloud computing platform. Prior to this, Baidu and Alibaba have also joined force with AMD to use its GPUs in their data centers earlier this year. Tencent and JD.come also welcomed AMD’s EPYC family CPUs last month. You may not see the result in the near term. We do expect to see increased revenue to come in 2018 and on. Overall, AMD is not yet a profitable company in the short term. It actually did a great job on reducing its debt from $20B to $14B in just a year. We are expecting AMD to continue with its debt reduction in coming years and We are liking the fundamentals of the company. I am bullish on AMD in the long run still.

P.S. We have added our positions in AMD recently.

BOTZ

Do you believe in Robotics and Artificial Intelligence? If yes, this ETF might be a good option for you. We have recently added it to our fund portfolio. BOTZ is an ETF that is specifically targeting Robotics and AI field. As of today, It is around $20.25/share. It is still pretty new since the launch in September last year. Mitsubishi, Nvidia and Fanuc Corp. are the top 3 largest holdings in this ETF. Its performance is impressive as a newly launch fund. Its return is about 39% since inception. BOTZ enable investors access through companies involved in automation, robotics and AI industries. It has 29 companies under its portfolio currently. You would get a good international and diversified exposure in the field. Robotics and AI sounds futuristic to a lot of people. I do believe in the advancement of today’s technology. Robotics and AI is imminent in the near future. It is not a bad time to invest in the tech field;)

Internet of Things

The term ” Internet of Things” has been a hot topic in recent years. What is IoT? Basically, it is a network of smart devices which are connected to each other and internet. For example, your cellphone, digital pads, smart lights, smart cars, fridge and other smart appliances would be connected through the network and your will be able to activate commands to whichever things your intend to and perform the task it is asked to do. It is not from a science fiction; it is the way our technology is going to advance to. Researchers believe there will be around 34B smart devices in use in the world by 2020. IoT will not only benefit our homes but also across industries. There are a few IoT related companies on our watch list such as: Microsoft, Blackrock, Amazon, Alphabet Inc., Facebook, Apple, Skyworks. If you are looking for some long term investments in IoT, these are some of the safe bets we recommend.

P.S. I have positions in Facebook and Amazon.