Chris Forte’s “Thoughts to Start the Day” – XAIR

Posted on July 8, 2022 by Scott Shuda

When insiders buy in the teeth of the worst first six months the market has seen since 1970 when Nixon was president, the Beatles broke up, and tube socks were popular, I take notice.

The market took notice when insiders bought shares of Beyond Air (XAIR). Shares of the company had been floundering. Late last year it spent considerable time around $14 as investors awaited FDA approval of their game changing medical nitric oxide device called LungFit PH.

When the company in December announced discussions were ongoing with the FDA and launch would be delayed the shares swooned to just below $5 by late June.

Then a week ago things got interesting. XAIR got the nod from the FDA for LungFit PH to treat infants with hypoxic respiratory failure. Shares leaped to $7.25.

Wednesday it was announced there was $2.3M of insider transactions. The shares leaped again climbing as high as $10.73 and ending up 17%.

Was this a one-off event? Or with prices depressed in a wide swath of companies will we see more insider buying? Irregardless it is obvious insider buying can really move the needle.

Another “insiders” company I’ve built a significant position in is biotech Abcellera (ABCL, $11)

“Insiders clearly appreciate the opportunity ahead as the CEO, CFO & COO each purchased significant amounts of stock directly after the Q1 release and insiders now own over 27% of the business,” said Seeking Alpha author Confoundedinterest on June 6th. “The company is currently sitting on a mountain of cash, $786 million worth and this balance looks to grow further with $334 million in accrued receivables from bebtelovimab.”

On June 9th ABCL disclosed a $480K share purchase by 10% owner Thermopylae Holdings.

The company has a lot more going for it than insider buying, but the buying helped revive the stock from a low of $5.70 to $11. Look for more insider buying of many beaten down biotech stocks with bright futures.
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QUICKIES
*S&P had a 4 day win streak, longest of the year.
*September
wheat ended up 4%
*
Food inflation has gone from a “boil to a simmer” – JP Morgan
*Every sector in the S&P was green yesterday
*The madness is slowing down -the growth rates in
rents are decelerating. – NPR Marketplace
*Hottest apartment market? Miami Dade County, followed by surprise – Harrisburg, PA.
*Time To Board The
ARKK says author Jim Van Meerten. 35 of the Fund’s 36 holdings have a positive return over the last 5 days. He also says the market bottomed on 6/16
*Bulls back below 20%. Even though the second half of June and first week of July have seen the S&P 500 climb back from its lows, sentiment appears to show that investors are not buying it.The more bearish turn at the expense of bulls witnessed in this week’s AAII survey was echoed by other readings on sentiment like the Investors Intelligence survey and NAAIM Exposure index. –
Bespoke Investment Group
*
Why Does Consumer Sentiment Have Echo Crashes? Florian Buschek post this good read on the Feed

My acting technique is to look up at God just before the camera rolls and say, ‘Give me a break.’ -JAMES CAAN

Good luck to all – Chris

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