A few sharp-eyed readers have asked about a teaser ad now circulating from Bill Patalon, and that headline is taken from the ad — a few other stocks are teased as hot “secret” recommendations of Patalon’s Private Briefing service, but it’s that “biggest medical breakthrough of the decade” bit that seems to be catching the most attention.
So what is it?
Well, before we get into the clues we first have to sit through an intro that has Patalon describing himself as, literally, the “World’s Greatest Stock Picker” — that claim is based on the fact that he says he has “217 double- and triple-peak gain winners since I began keeping track in August 2011.”
I expect that’s at least a reasonable facsimile of the truth, since big publishers are pretty careful not to publish falsehoods and risk their golden goose, but I don’t know why having 217 double-digit or triple-digit (stocks that rose to a peak of at least 10% or 100% after being recommended) in five years makes you the “world’s greatest stock picker.” I guess you can make that call on your own.
Note that “peak” returns are obviously quite different than “actual” returns — actual returns are when you sell a stock and book a profit, or, in the case of a pundit, you recommend a sale of a stock. “Peak” return just measures the highest point a stock hits after you recommend it… and it’s quite rare to hear about a pundit actually recommending the sale of a stock at the peak (just like you and I are rarely able to buy at the bottom or sell at the top).
But anyway, that’s his claim, that he’s the “World’s Greatest Stock Picker” and that his system will identify fantastic stocks for you for $99 a year… here’s a little taste of the “formula” he uses:
“While I can’t reveal the precise formula behind my proprietary stock-ranking system, I can tell you this: It must first score in the top 5% across seven model variables that include:
- Price-to-Cash Ratio < 10. If a company's stock price is high relative to the cash it's generating, I won't touch it. The average Price to Cash Flow (P/CF) for stocks is 14.06. For me a stock's P/CF ratio needs to be below 10...
- Insider Buying Activity > 3 Executives. I look for at least three or more major insider buying transactions before I recommend any stock.
- PEG Ratio < 1. One of the quickest ways to tell if a company is over or undervalued is to look at its price-to-earnings ratio (P/E). For me, a company's ratio needs to be below 1, which means the stock is priced lower than its earnings growth.
Those are certainly reasonable things to look for — patterns of insider buying, reasonable cash flow multiples, low PEG ratios. No argument there.
What, then, has this system identified?
“Let me show you what my method is pinpointing next. It’s a big one. In fact…
“It could be the biggest medical breakthrough of the decade….
“Because I’ve found a tiny biotech lab and research firm…
“Which has developed a paradigm shifting technology I am 100% convinced is on the verge of changing medicine forever.
“This technology is not only game-changing – it’s life-changing.
“It’s a noninvasive, nonsurgical system for detecting cancer and other deadly diseases – painlessly.
“Even more exciting, the system can detect cancer months, and in some cases, even years before the disease fully metastasizes.”
Ah, you know what that means — we’re looking at another diagnostics stock… and since we get that “noninvasive” bit and it’s about cancer, I’m guessing it’s one of the several “liquid biopsy” stocks that have been occasionally been hot tickets over the past couple years.
Here’s more from the ad:
“Instead of having to cut into someone to see if he or she has cancer, this new technology makes it possible for doctors to administer a simple, noninvasive, pain-free test to achieve the same result.
“In fact, this one company has already demonstrated in clinical studies the ability to identify and track melanoma, lung, colorectal, and pancreatic cancers using this advanced proprietary technology.
“How does it work exactly?
“By a completely revolutionary method of looking for ‘cancer markers’ in a patient’s bodily fluids.”Are you getting our free Daily Update
"reveal" emails? If not,
just click here...
Yep, there you have it — liquid biopsy. Lots of companies are already selling these tests, or are in the process of trying to get them approved. It’s a segment in pretty serious flux, from what I can tell. Which stock does Patalon like?
“The firm just inked four major deals with national healthcare providers.
“One is a proprietary PPO (preferred provider organization) which boasts 550,000 doctors, 4,000 hospitals, and 40 million Americans within their network.
“Another is an Arizona-based provider with over four million covered subscribers.
“Yet another is a multispecialty provider in the U.S., Canada, Mexico, and the Caribbean that provides in-network coverage to 22 million individuals.
“And the fourth is the biggest of all – a giant provider with almost 900,000 doctors and an estimated 68 million consumers.
“All four of these deals just happened within a few weeks of each other this year. And all four pretty much guarantee one thing:
“This firms’ Early Warning Detection system is set to be rolled out to millions of doctor’s offices and hospitals –