February 22, 2019 

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Highlights from the Week

Up, Up and Away!

Although Insys Therapeutics (INSY) was our biggest winner this week with its outrageous +24.19% move combined with last week for a +77.01% Year-To-Date (YTD) gain since just dropping a few weeks ago, TransEnterix (TRXC) finally came into its own jumping +17.75% this week to total for +45.74% YTD.

Coming Down from the High

The cannabis sector got smacked this week as overbought levels took hold in nearly every position with stocks retreating from the highs – except for Cronos (CRON), oddly enough. Although Canopy Growth Corp. (CGC) is our biggest loser this week, New Age Beverages (NBEV) hurt more because the position’s size in our portfolio resulted in a larger loss for its relative drop. That being said, our portfolio gained +0.87% overall this week, so we’re not complaining – this is why diversification is king for portfolio protection.

Welcome to IPOs

Initial Public Offerings (IPO) are notoriously difficult to play as they have no price levels set to base trades around since the companies have just come public. This week, we delve into the IPO space again – Tencent Music – TME – was our first IPO in the portfolio – with Goss Therapeutics (GOSS), a cancer research play, and, so far, so good as GOSS is up +20.71% since its February 8 IPO, gaining 16.58% this week alone.

Closing Up Shop

You’ll notice that Get Irked closed not one but two slow-moving positions this week – Novavax (NVAX) and Rite-Aid (RAD). Traders should keep in mind what kind of risk tolerance and goal profile they have for each position in their portfolio. We kicked NVAX for rolling over and being too slow while RAD got kicked for being too close to bankruptcy for our tastes. Trade details below.

This Week’s Trades

Gossamer Therapeutics (GOSS) *New Position – IPO*

This biopharma company specializes in cancer treatment drugs as well as specializing in immunology and inflammation. Although GOSS came public on February 8, we waited until it established and broke out of its initial range to start our position at $19.68. As with many IPOs, the breakout was FAST, with us taking some profits one day later at $20.82 for a gain of 5.79%, allowing us to lower our cost basis to $18.54 (where we intend to buy more if GOSS retraces). GOSS closed the week at $22.50, leaving us up +21.36%. Not bad for a position we opened two days ago!

Insys Therapeutics (INSY)

INSY continued its outstanding rebound this week with us taking some profits when it pegged $5.37 before heading even higher, allowing us to lower our per-share cost to $2.55. INSY closed the week at $6.16 with our position very much in the green at +141.57%.

New Age Beverages (NBEV)

NBEV pulled back dramatically more than the rest of the cannabis space on Friday after analysts started to cool on the sector, triggering our buy orders to add more to our position at $6.09 and $5.79, both on Friday! Some believe NBEV has strong upward potential, but we’re still choosing to play this one conservatively. NBEV closed the week at $6.15 with our position -0.67%.

Novavax (NVAX) *Closed Position*

NVAX started to roll over mid-week, so we set a stop-limit order to take our profits out of this slow-moving position. Although NVAX has interesting potential future prospects, we feel other positions are better-suited for our goals for the portfolio. We sold at $1.98 and took our 28.09% overall gain for better prospects elsewhere. In the meantime, NVAX continued lower, closing the week at $1.92, down -3.03% from where we sold.

Rite-Aid (RAD) *Closed Position*

RAD started to turn downward after negative news about competitor CVS came out this week. Due to its potential for bankruptcy, we lost our stomach to play RAD any further as we’re unwilling to risk the amount we need to in order to make this position worthwhile. We closed out with a measly 2.70% gain at $0.76. RAD closed the week at $0.74, down -2.63% from where we sold.

TransEnterix (TRXC)

After weeks of meandering in the wilderness between $2.00 and $3.00, TRXC finally broke to the upside this week with us taking profits on the way up at $2.79, $2.91 and $3.18, reducing our per-share cost to $2.48. TRXC closed the week at $3.26, with our position finally solidly profitable at +31.79%.

In Summary

Diversify, Diversify, Diversify!

The week’s action emphasizes the importance of diversification – even in a trading portfolio.

Despite cannabis having a terrible week as a sector with at least four positions in our portfolio (ACB, CRON, CGC, and NBEV), our portfolio gained nearly 1.0% thanks to moves in unrelated spaces.

Tencent Music (TME), for example, hasn’t ever moved enough in a single week to be a weekly winner, but TME’s ongoing gains are starting to become substantial at +39.36% for the year.

Transenterix’s (TRXC) return to prominence combined with Insys Therapeutics’s (INSY) ongoing bounce went a long way to bring up our performance from the drawdown from much of the marijuana space (although CRON is still holding up more than fine).

Groupon (GRPN) continues to be a disappointment after a poor earnings showing last week, however we still like its long-term prospects, so despite a -3.72% drop this week combined with a -3.06% from last week, GRPN’s still up +6.67% for the year (and +42.21% for our portfolio).

Want further clarification?

If you have questions about how we’re playing different positions or anything at all, really, feel free to leave a comment below! We’ll see you next week!