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Growth Stories: AVXS, AVAV, CHKP, FTNT, SQ, PRTK

AVXS – AveXis

About: a clinical-stage gene therapy company, engages in developing and commercializing treatments for patients suffering from rare and life-threatening neurological genetic diseases.

Pipeline:

AVXS-101:

  • The 1st ever gene therapy study for the treatment of SMA Type 1
  • Designed to address the monogenetic root cause of SMA by replacing the lost or defective primary SMN1 gene with a fully functioning human SMN gene
  • Accepted into the European medicine’s agency prime program that enhance support for the development of medicines which is similar to FDA.

SMA Type 1:

  • Is a devastating orphan disease that results in motor neuron loss and progressive muscle weakness
  • One in 10,000 live births
  • SMA is the most common genetic cause of infant deaths
  • Rapidly progressive and devastating
  • The average lifespan of a child with SMA Type I is only 8 months of age

Phase 1 result:

  • one-time infusion of AVXS-101 appears to be generally tolerated with a favorable safety profile
  • indicate a potential for clinically transformative effect on the event free survival
  • rapid and increase in motor function
  • achievement of motor milestone never seen in the history of this disease.

Plans for 2017: To participate in a chemistry manufacturing and control Type B meeting with the FDA in May.

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High Growth Stocks: OLED, DERM, FMI, SWIR

Summary

OLED

  • We are positive on OLED being widely adopted with production capacity being doubled and penetration rate in SmartPhone market expected to rise.

DERM

  • We are cautious that Dermira’s 2 Phase 3 drugs (treatment for excessive sweating and plaque psoriasis) which are for regulatory approval face multiple competitors.

FMI

  • We like FMI because it is a play on using genetic profiles to treat cancer. Currently it is the first-mover in applying for national Medicare coverage to allow more people to use its products.

SWIR

  • We believe SWIR is a play on the connected cars trend, however we are cautious as it faces numerous competitors and its products may soon be commoditized as connected cars become a norm and not a luxury in the future.

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MEGATREND: Fiber Optics

Narrative: 

These companies are about to experience a secular growth driven by 3 large catalysts:

  1. China (magic word)
  2. Upgrade to 100G technology by telecom firms in the U.S. and beyond
  3. Cloud-computing data centers packed with computer servers
  • Ex. Amazon, Google, and Facebook

A lot of these companies are still being priced like a cyclical company, we believe that as the secular growth continues, they will rerate.

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Why UA is a Good Short Candidate

Under Armour, Inc. (UA)

 
Market Cap: $12.2 Bil

 
Industry: Sports Apparel

 

Highlights 

  • The Athletic Apparel space is entering a period of over saturation, with the space becoming too crowded. A key clue is the two quarter decline in sales of their biggest supplier.
  • The performance basketball segment is experiencing intensifying competition, as Nike cuts prices and Adidas’ success is driving demand for more classics and retro shoes.
  • Management exits have made us wary of whether the company can live through the current tough environment.
  • Valuations are not pricing in the currently tough environment and potential lower margin assumptions due to the intensifying bid for endorsements and sponsorship.
  • Chart is breaking down from a long consolidation with volume
  • Relative weakness given recent market strength due to Trump win

Main points:
Under Armour has four main earnings drivers: all of which are currently seeing pressure. Continue reading