Eifrig’s “#1 Biotech Stock” and Four Teased Healthcare Plays

What's being teased by Retirement Millionaire?

Dr. David Eifrig has usually one of the more sober pitchmen at Stansberry (odd choice of words for a guy who owns a winery, I guess), and his Retirement Millionaire newsletter (usually sold at $49/yr, renews at $199) is probably his most conservative product — offering up “retirement living” lifestyle advice as well as what are usually, I’m told, relatively low-risk investments.  Sometimes his teaser pitches get just about as juiced up as anyone else, but the actual recommendations I’ve looked at have always been far more conservative… like Microsoft as a blockchain play, or NXP Semiconductor as a
“death of cash” idea.  The ads were goofy (Fedcoin is coming!  The US Government is erasing serial numbers!  The end of American money as we know it!), but the ideas were rational and profitable real companies.

And I haven’t dug into at one of his ads in years, so his promise of a “free” biotech play (and some “back door” ideas) caught my eye — shall we have a look?

I’m probably not going to be able to give you any great insights here, just to warn you up front… biotech is not an area where I have any deep understanding of the science… but we can at least chew through the hints, see what “secrets” we can reveal, and give those folks who took AP Chemistry a chance to chime in with their opinions.   Ready?

“A Groundbreaking Scientific Announcement Led a Former Vice President at Goldman Sachs, a Duke Fellow in Molecular Biology, and Medical Doctor, to Come Forward With a Fast-Moving Opportunity Today

“#1 Biotech Stock

“Learn the name and ticker symbol right now, NO Strings Attached!”

That’s a pretty easy one to narrow down even if they didn’t actually reveal the name… the “interviewer” in the presentation, Tom Mustin, gets readers intrigued with these words:

“There’s no better way to turn a profit than to look to one of biotech’s biggest suppliers…

“An industry leader Dr. David Eifrig says powers scientific discoveries like Texas powers oil.

“Their products are used in laboratories all over the world. From classrooms to high-level research labs.

“And as science continues to boom over the next year… Dr. David Eifrig says ONE company stands to profit more than any other, at the center of it all.”

And then, toward the end of the “interview,” they do indeed spill the beans — that “#1 Biotech,” which Eifrig says is the “perfect business to own pre- and post-COVID,” is Thermo Fisher Scientific (TMO).

Why is it perfect? Well, they do cite some example’s of TMO’s work, including facilitating vaccine distribution, developing rapid COVID testing, supporting hundreds of other companies in COVID treatments and vaccines. Essentially, they’re teasing this as buying into one of the foundational companies of the biotech sector, a supplier who will benefit as science continues to more forward in ways that remain unimaginable… the stock is up 964% in the past decade, we’re told, but Eifrig also says that “there’s a good chance this company is gearing up for their best decade ever.”

TMO is a huge company now, with a market cap of about $180 billion, so it’s definitely not going to provide sexy biotech returns, doubling overnight on some big piece of exciting news… but they certainly had a great year in 2020, with shockingly strong revenue growth of 24% and earnings growth of 72% for the year, their best year in decades… and particularly amazing for a year in which hospital procedures were way down and a lot of healthcare companies had a real dip in revenues — which I guess is a benefit for being more of a lab supplier than a real health care supplier.

And TMO is certainly in that “blue chip” category — it’s been a fantastic company for decades, and became a blowout spectacular company last year, and they probably won’t ever have another year as fantastic as 2020 on the growth front… but they are widely expected to grow again this year, with analysts forecasting earnings growth of about 13%, followed by some fairly flat years in 2022 and 2023. At the current price of $464, the shares are valued at about 21X forward earnings, which is pretty much exactly “average” for an S&P 500 company right now.

So… fantastic year last year, probably another good year this year, if you want to buy it at this price you probably have to have at least a little inkling of belief that the analysts are lowballing the numbers for the next couple years, since you probably wouldn’t want to pay 21X peak earnings for a company that’s plateauing. I’m not particularly excited about getting into TMO at this price, but it is a great company and I will confess that I’ve looked at it a couple other times over the past decade and also chose not to buy at that time, for the same reason (kinda expensive), and in retrospect that was a mistake. Sometimes, if you’ve got a good handle on a real stable blue-chip supplier in a growth industry you’re better off just building your position and staying on for the ride — the best companies rarely get really cheap, and typically can grow far more than you imagine.
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What do you think of Thermo Fisher? x

But that ‘secret’ stock was revealed in the presentation — how about the ones he didn’t reveal? He did have to hold back some exciting teases, after all, it’s still all about enticing you to sign up.

And the main “secret” bit is a “backdoor” play…

“Learn The ‘Backdoor’ to a Potential 800% Biotech Winner….

“Eli Lilly is trading for around $200 per share. So, instead of getting in that way… I have a way for you to get in for far less – with the potential for faster, bigger gains too.

“You see, I’ve discovered a ‘backdoor’ into this company… with the potential for an 800% profit each the next five years.”

They say this has something to do with “startups,” and what that appears to mean is that Dr. Eifrig thinks you should buy two of the companies with whom Eli Lilly has recently made collaboration deals. Here are the hints for the first one:

“… the first opportunity lined up in November of 2020 when Eli Lilly announced an exclusive license agreement deal — dispatching one tiny biotech startup $2.7 billion in cash.

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“Then, Vanguard and BlackRock – two of the biggest funds in the world – bought up millions of dollars’ worth of shares in December 2020.

“With all the attention, this startup won’t be trading for $10 a share for long. I believe it’s best to get into this one before their next scheduled earnings report coming soon.”

That’s almost certainly Precision BioSciences (DTIL), a small genomic editing company. They have a proprietary gene correction platform called ARCUS, they’re working primarily on cancer treatments, and you can see their corporate presentation deck here. They are just beginning their first Phase 1 trials, most of their pipeline is