I hadn’t ever heard of Ben Benoy or the new Biotech Intel Trader that’s being published by Harry Dent’s company, but a few folks asked about it yesterday so I thought you might like a quick little answer to their teaser pitch.
And actually, it’ll be even quicker than usual… more on that in a moment.
Benoy’s strategy is, essentially, that he’s going to integrate a lot of data into automated systems that help give him trade alerts — presumably using some proprietary insight into what is and isn’t important. From the spiel, it sounds like their “dashboard” of info on stocks relies on both the chart signals and on social sentiment. That’s not unique to Benoy, of course, there are at least a half dozen companies trying to develop reasonable “prediction engines” that use the ceaseless feed of chatter from social media — following patterns, interpreting sentiment, etc. I remain a bit skeptical that this is going to work, but I’m skeptical of most quantitative systems anyway — I definitely have a bias toward company fundamentals and financials, partly because I think that stuff is much more interesting to cogitate on than is brainstorming about whether a shift from 40% bullish to 48% bullish in tweeted sentiment about a particular stock is meaningful. That kind of big data crunching is too new, and the data feed changes too much over time, for me to have much confidence even if it did appeal — but perhaps it is predictive and Benoy has indeed identified the right triggers, who knows.
The ad that was forwarded to me reads like a redacted government document — Benoy uses the little black squares to make it look secretive and clever. But it’s about a biotech company with a kidney disease drug… here’s the beginning of the pitch:
“This company provides the only non-toxic treatment available for patients suffering from chronic kidney disease (CKD), specifically hyperphosphatemia, which affects approximately 80% of Stage 5 CKD or end-stage renal disease (ESRD) patients.
In addition, it is also much less expensive than current alternatives. During Phase 3 clinical trials, patients treated with this company’s drug saved $4,200 per year in hospitalization costs….
“XXXX is pushing hard to market this drug to key dialysis organizations and more than 5,000 nephrologists. The company has also recstered its sales staff, and this has resulted in a groundswell of product information broadcasting.
“We have received a solid buy signal for XXXX, based on a combination of increased social media chatter, positive buy sentiment and accurate message author reputation scores.
“Since January 2013, the buy signals I’ve seen on XXXX have typically forecasted major upward price movements within 60 to 90 days.”
And then he references another successful biotech investment group, which lends a little gravitas to the whole thing:
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“Meanwhile, Baupost, the Boston-based hedge fund recently upped its stake in XXXX from 10.5 million shares to 18.3 million shares. Baupost, which has proved to be a successful picker of biotech stocks, recently reaped a profit of around $900 million when Idenix Pharmaceuticals was acquired by Merck & Co.”
So, that’s an interesting little pitch — and there’s a convincing little graph, with color and everything… but we’re not going to cough up $2,295 just to find out the name of this stock, are we?
Well, it turns out that we don’t have to — and, though I regret to inform you that you don’t need me this time around, we don’t even need to pull the tarp off of the Thinkolator and start her up on this chilly December day. This is Keryx Biopharmaceuticals (KERX), and this teaser spiel is just a rehashed bit of a free article recommending “buy up to $16.50” on KERX that Benoy published nine days ago.
Not that we couldn’t have tracked it down just based on the clues, of course. But I’ve got Christmas shopping to finish, so I’ll take the freebie this time around.
And I’m sure Benoy must be adding some kind of interpretation or analysis to these picks, but the chart he excerpts and references and the numbers that he shows about KERX come from the HedgeChatter service — one of those many startups that’s trying to create predictive stock engines based on social sentiment and other “big data” inputs. If that’s all you want, HedgeChatter.com will sell it to you for thirty bucks a month.
I’m a sucker for new ways of picturing data and comparing companies, so I coughed up $30 to check out Hedgechatter.com. I don’t know if there is any trading “edge” to be gained from this kind of info, and I don’t know of any reason to be excited to believe that they will provide a great value for folks who are mostly long-term, fundamental investors (like me), but it’s kind of cool.
So yes, I can throw $30 at HedgeChatter and see if it sticks — I spend a lot more than that on the (excellent) Ycharts service (that’s more like “Bloomberg, jr.”), and I’ll let you know if I find it useful. Right now, the dashboard for KERX at HedgeChatter is much less positive than it was when Benoy pulled the data he’s using in his ad, when I checked today it was at 2/3 “hold” and 1/3 “strong buy” — their system says it generated a “social buy” signal on December 6 when it was around $16, so the stock is down 10-15% or so since then.
It was kind of interesting to browse through HedgeChatter, I think I’ll go back and check out some of the other stocks that interest me — but I’ll pass on KERX, personally, and will leave it up to the biotech enthusiasts among you to chatter about whether it looks appealing. It’s a billion-dollar company with an approved drug, and presumably they’re trying to get that drug higher sales with expanded indications or something along those lines, but from a quick look at their website it doesn’t appear that they have any other products in the pipeline beyond the recently approved Auryxia… and analysts are not predicting a highly lucrative rollout of that, with only $60 million in sales next year (that would mean they’re still losing money at the end of 2015).
Oh, and yes — this stock was teased back in May by BioScience Millionaire, and we covered it at the time. Dr. KSS, who writes about biotech for the Irregulars, commented negatively about the stock at the time — the drug ended up being approved in September, but with some warnings that quelled any happiness among investors and brought a selloff (a couple takes on that here and here if you’re curious). The stock has been in a range between $13-17 pretty much all year.
And that’s about it for me — time for y’all to talk among yourselves, just scroll down for the happy little comment box and throw your sentiment into our sophisticated system of blather and re-blather, and we’ll see what we learn.