Market Assessment- Starting Tuesday, February 15, 2022 at 6:29 am
In our January 1, 2022 Market Assessment, we listed 9 stocks that were vulnerable to large declines – and dropped them: Within 30 days they all sold hard – Align (ALGN) dropped 200 points ; Intuitive Surgical (ISRG) dropped 100 points; ServiceNow (NOW) dropped 150 points; Google (GOOG) dropped 360 points and Amazon (AMZN) dropped 534 points.
Joe Cotton
That said, we believe this is a Buying Opportunity for a large number of former Darlings-those highly regarded, “hot” trading stocks that have had a substantial decline of 35-50% over the past 6 month – such as Shopify (SHOP) 847.45, Coinbase (COIN) 195.25, Facebook (FB) 217.70, Intellia (NTLA) 88.91, Sunrun (RUN) 22.34, Airbnb (ABNB) 169.66, CrowdStrike (CRWD) 180.60) etc. Netflix (9NFLX5) etc. , etc.
Our “Stock of The Week” is Cassava Sciences, Inc. (SAVA) $ 48.70. This is a High Risk, High Reward stock that became my stock pick in 2021 in Wall Street’s Best Stock Contest.
It went from about $ 8 to $ 140 in 6 months. The reason for the big run-up is that the company has a drug candidate, Simufilam, who is currently in a 3rd Phase clinical trial that has been shown to be effective in improving cognition in Alzheimer’s patients in 2nd Phase trials. If the drug is to be effective, we believe the stock could easily land at $ 200 per share, and could be $ 300. We traded the stock and we last bought it at 48.72 a share on 2/9/22.
What’s more interesting is that this stock only has 40+ million shares outstanding (per finance.yahoo.com) and the float is only 36+ million shares and has 13.6 million shares short (35.87% of the float). This is a perfect candidate for a short squeeze.
There has been significant controversy surrounding the stock lately. Citizen’s Petition filed with the FDA by an attorney representing short sellers of stock with the FDA in August of 2021 requesting to stop the clinical trial for Simufilam due to the company’s alleged fraud in the doctoral trial results on the 2nd Phase. On Feb. 10, the company reported that Citizen’s Petition had been rejected by the FDA. B.Riley Securities maintained their Buy Rating on the stock on January 24, 2022.
Joe Cotton has won three National Stock Selection Contests with annual percentage gains in excess of 96%. His 2020 Wall Street’s Best stock contest winner was Inovio Pharmaceuticals (Symbol INO) with a 742% 1-Year return.
This article is not investment advice, or in any way considered investment advice. For Investment Advice, consult a Registered Investment Advisor or a Certified Financial Planner. Joe Cotton’s website is www.cottonstocks.net. Joseph W. Cotton of NKY is publisher of the market newsletter, Cotton’s Technically Speaking. He is a graduate of Xavier University, a former bank manager and credit analyst, and a former Fidelity Investments registered investment representative. Contact him at [email protected]
