“Trade Alert — Biopharma Firm Poised for an Upsurge” from Ben Benoy

What stock is being teased by the new Biotech Intel Trader?

By Travis Johnson, Stock Gumshoe, December 17, 2014

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.



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Robert ReillyJerome SteinmanLarry GriffinkeithSteve Chippendale Recent comment authors

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Griffin
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👍3169
Griffin

Interesting I’ve been wondering about tracking social media, stock forums/boards, and such. I was recently offered a lifetime membership/subscription for a nominal fee to a startup that does that tracking. Next month they are going to grow their data acquistion, and add artificial intelligence. Up to now I haven’t found many small caps. Biotechs in their data, perhaps next month.

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hipockets
Member
👍1233

Thanks, Larry. The startup might be a good source for short term trading ideas. Would have to try it on paper before actually trading. Could you give ua a link to the site?

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Griffin
Member
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Griffin

Sure, snoopwire.com is the site, as mentioned, they are a startup, and things are envolving. Their subscription is IIRC < $70 a month. Their 'Scanner' which gives the data compiled seems to have a list of all(?) stocks. I've told them that all those stocks is a bit much, and asked if it would be possible to do a users' list or stocks by sector. I got a reasonable answer but no commintment. If you see something interesting and need more info let me know. Travis has my permission to give you my email addy, if you want.

Steve Chippendale
Guest
Steve Chippendale

Larry, I’m considering that lifetime subscription to snoopwire and was wondering if you have any more thoughts about the service. Their front page says: “We have 293 left as of November 10th!” So, about six weeks out of date and I’m wondering if they are still up and running. Steve

Griffin
Member
👍3169
Griffin

Steve, I’m getting updates from Snoopwire on a semi-regular basis. I have checked into snoopwire.com 2-3 times a week without problem. See my post to Keith above for a little more info. Forgot to mention that I believe snoopwire and small caps network are catering to the day trader. I have an email address for them if I can be of any help let me know.

Griffin
Member
👍3169
Griffin

To follow up a bit more. I brought up two browsers in different windows. Then loaded snoopwire history in one, and a chart in the other of the same stock (ACHN, GILD). I then adjusted the windows so that both appeared equal for a 3 month time period. I didn’t see that any effect on the stocks. That’s not to say there isn’t, two stock isn’t big enough, and I do not have the e3xperience to see it perhaps. Any further comments should probably be in another column – http://www.stockgumshoe.com/2014/02/microblog-the-eyes-and-ears-team-for-bio-trials/#comment – I’m subscribed to it.

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keith
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keith

good info . Larry. would like to know some picks from snoopwire if you can.

Griffin
Member
👍3169
Griffin

Keith, I intend too, unfortunately I haven’t spent that much time with it to get a feel. Snoopwire doesn’t pick stocks per say. They monitor social media and report the number of times a stock is mentioed. I’ve entered a number stocks into their history search and most of those have been misses. Those that have been found do not have many mentions (hits), even that can be relavent if the average is zero. I’m waiting for the upgrade this coming month. In the mean time I replaced the tiolet, removed the recliner for upholstery, and re-chaulking the windows on… Read more »

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Victor
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Victor

Hi TRavis:
Always enjoy your great writeups. This time I finally found this one on my own. I went to the Bauport web site to find their list of holdings. Sorted the five low priced Pharma’s and found a chart that match the one in the ad.
AS to using sentiment data I would have to wait and see. I am statistically oriented but I’m not sure that the information is reliable. or is it statisticaly signifient.

DrKSSMDPhD
Member
👍47656

Of all the stocks I routinely come across in biotech, this one is the one I most cannot figure. The positive FDA action here was highly mysterious, and undermined the medical establishment’s confidence in the FDA. I presume the company’s value is up there because of anticipation it will be bought, but by any cool-headed, sane or even remotely traditional means of valuation it is absurdly overpriced here. Its one agent is not sexy, not techy, not original, not exceptional, and addresses an indication that many other agents do too. Investors profiting from Keryx are truly blind squirrels. A solid… Read more »

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Anthony Alfidi
Guest

Good call. Social media chatter on stocks is full of uninformed opinion and is easily spun with campaigns. Drug companies like this in Phase 3 deserve a re-look later if they can get sales traction.

Richard Sposato
Guest
Richard Sposato

Better than collection of social media data are sites where members make forecasts about revenues and data. Individually each estimate might not mean much but the aggregate often does. E.G. http://www.estimize.com . membership free.

Rusty Brown in Canada
Guest
Rusty Brown in Canada

This whole approach seems to me destined to take the concept of “talking your book” to a whole new level.

john b
Guest
john b

First i would like to thank gumshoe publications for being so direct. Iam sorry to say i got catch up in xoma after paying the money for subscriptions, and have since lost my money,for someone like me it really would be great to find a place that is truly honest. if any of you could help please do so, merry Christmas to all

SoGiAm
Member
👍11373

John b- May I suggest that you follow the biotechnology threads. The latest one is located here: http://www.stockgumshoe.com/2014/12/the-finale-is-grand-the-gain-from-pain-mainly-explained/ and carefully follow the Gummies discussions on these threads. I believe that investing is similar to fishing: A scout goes out find where the birds are gathering or the fish are surfacing to feed. That’s where you want to be, in the “sweet-spot” Best to ALL-Benjamin

hipockets
Member
👍1233

john b – I’m sorry XOMA fed you a line and hooked you. Seriously!

You have many friends here, and you will learn a lot.

Jerome Steinman
Guest
Jerome Steinman

I subscribed to Ben Benoy’s biotech service –From Dent Research__ and every investment I made based on his advice has been a looser. That includes going long and one put. I just cancelled the service. It just doesn’t work.

Robert Reilly
Guest

Ben Benjoy(of Dent Research) is pushing another new social-tracker service called MarketVox at a “discounted” price of about $1000. Hopefully it will be more useful than his biopharma service(see Mr Steinman’s earlier post)