OFFICIAL STOCK MARKET AND ECONOMY THREAD VOL. A NEW CHAPTER

The irony is we’re in a deflationary environment and inflation isn’t increasing while the print. The thing I worry about is stagflation down the road but I like what Biden is focused on and I think we’ll sidestep those issues

i dont see the deflationary risks with covid i think we are way past it. all these businesses shut and the markets shrugging off. the disconnect is the markets vs economy. the money printing risk is very real with almost everything hitting ATHs last year.
 
Latest from Jonah Lupton

$DMTK - DermTech

Website: DermTech.com/

Stock price: $39.00

Market cap: $930 million

Enterprise value: $870 million

Founded: 1995

Founded by: John Dobak [LinkedIn]

IPO Date: $DMTK went public via SPAC in 2019 [click here]

HQ: La Jolla, California

Employees: 80+ including 40+ sales reps

  • 2019 revenues: $3 million
  • 2020 revenues (est): $6 million
  • 2021 revenues (est): $12 million
$DMTK 2020 Q3 Earnings Report [read here]

Video of sample collection [watch here]

DermTech announces results of TRUST study [click here]

Presentation at ICR Conference, January 2020 [watch here]

Presentation at Canaccord Genuity MedTech Forum, November 2020 [watch here]

Presentation at Stifel Healthcare Conference, November 2020 [click here]

$DMTK announces $143.7 million stock offering on January 11th, 2021 [read here]

$DMTK announces inclusion of their genomic testing patch in the National Comprehensive Cancer Network [read here]




$DMTK - DermTech

DermTech ($DMTK) is a molecular diagnostics company that develops and markets non-invasive diagnostic tests to diagnose skin cancer and other skin related conditions. The company offers Pigmented Lesion Assay (PLA), a gene expression test that helps rule out melanoma and the need for a surgical biopsy. $DMTK also provides the Nevome test, an adjunctive reflex test for the PLA and adhesive skin sample collection kits, as well as gene expression assays for the Th1, Th2, IFN-gamma, and Th17 inflammatory pathways. $DMTK is also developing non-melanoma skin cancer diagnostic and non-melanoma skin cancer risk assessment products. The $DMTK Melanoma Test is a new kind of lab test that looks for signs of melanoma in your skin’s genomic material.




With the traditional biopsy care pathway, clinicians use their eyes — aided by a microscope — to see physical changes to a mole (aka pigmented lesion), and the cells within it. If the dermatologist is concerned with the mole they will order a biopsy, performed with a scalpel.




The $DMTK test uses a gene expression test to analyze the RNA inside those cells.

Since the $DMTK testing method can find indications of melanoma at this more precise level, the disease can be detected far earlier and more accurately than the current biopsy pathway. This is all done from cells lifted off your mole with a simple pain-free adhesive sticker, not a scalpel.

Cancer starts when genes mutate within a cell. This altered cell duplicates and duplicates until enough cells exist to be seen under a microscope (and then, eventually, even without one). $DMTK’s genomic analysis can find these altered cancerous cells long before they show up under a microscope, through a proprietary gene expression test.




The expression test to search for PRAME and LINC00518 is done through an amplification process called RT-PCR (a polymerase chain reaction) that makes billions of copies of these genes so our scientists can study them in detail. When this analysis shows excessive levels of the PRAME and/or LINC00518 gene, it correlates with the presence of melanoma.

$DMTK’s genomic testing smart patches have been such a breakthrough they also have agreements with companies like Biogen, L'Oreal, and Johnson & Johnson to evaluate this technology in clinical trials for psoriasis, atopic dermatitis, acne and other skin conditions.



COLLECTION PROCESS:

If your doctor has identified a suspicious skin spot — one they would normally take a photograph of and track — now they can use the $DMTK test to rule out melanoma with 99% accuracy and better than the 83% accuracy of the current biopsy care pathways.

Once they have identified the spot, they’ll open the “Adhesive Skin Collection Kit” to begin the test. They’ll use the smart sticker to lift skin tissue off the spot by pressing, rubbing, and lifting the sticker. They’ll do this four times, placing each sticker on the collection strip.

The collections strips are then sent to the $DMTK lab in La Jolla, California where a team of experts and Clinical Laboratory Scientists (CLS) oversee a fully automated testing process. The $DMTK Gene Lab is the first and only commercial lab to extract nucleic acid (and other proteins) from non-invasive skin samples.




Results are sent to your physician in about 3 business days. Your doctor will use this information to choose the best path forward for your treatment. If the genomic markers are there, this will typically result in removal of the spot. If not, you’ve likely saved yourself a scar.






OLD WAY vs the NEW $DMTK WAY:

With millions of unnecessary biopsies occurring every year for suspicious pigmented lesions (moles) it’s pretty easy to understand why $DMTK’s non-invasive method is so attractive to both medical professionals and patients not to mention $DMTK’s smart patch is easier, faster, cheaper, pain-free and more accurate.






MARKET OPPORTUNITY:

Everyone reading this newsletter knows that every form of cancer is scary and potentially deadly but I didn’t realize how many cases of skin cancer were diagnosed every year.

Sadly the skin cancer market is one of the biggest and still growing quite rapidly. $DMTK has an opportunity to save countless lives over the next several decades with early detection of skin cancer so patients can get the treatment they need before this horrible disease spreads to other parts of their body.

$DMTK estimates their current PLA product plus additional pipeline products will address at least a $10 billion market.





PIPELINE:

$DMTK’s PLA test is their first commercial product but they have several more in the pipeline that are addressing equally as large markets in the skin disease and skin cancer industry.





TELEHEALTH:

$DMTK sells its products primarily to pathology and oncology practitioners however there’s an emerging opportunity (mostly thanks to Covid) to offer telehealth services with DTC (direct to consumer) kits whereby consumers would collect the samples off their bodies and ship them to the $DMTK Gene Lab for processing.





GROWTH STRATEGY:

Now that $DMTK has their viable PLA commercial product their challenge will be ramping up the sales team to go after the dermatology and oncology medical professionals. $DMTK ended 2020 with 40+ sales reps which gives them significant coverage in most major markets.




$DMTK has increased their marketing efforts as the pandemic comes to an end which means more dermatology offices will be able to function on a normal schedule. Since approximately half of all $DMTK patients are over the age of 60, the pandemic has had a clear impact on the older population being able to see their medical professionals in a timely manner.




$DMTK is doing more digital marketing with an emphasis on “find a specialist” to help drive traffic to the dermatology offices in their network [click here].

As of mid-2020, $DMTK’s smart patch test is now eligible for full reimbursed by Medicare at $760 per patch with private payor coverage on the horizon. At some point in the future $DMTK’s smart patch will be the new standard of care rather than just a better alternative.





FINANCIALS:

The current financials and revenue forecasts for $DMTK are nothing to get too excited about because we’re still dealing with small numbers compared to more established companies in the healthcare industry.

However I believe $DMTK could grow revenues at 100% per year for the next 3-5 years (maybe longer). I have spoken to several dermatologists over the past couple weeks and they all said that $DMTK’s new smart patch is an absolute game changer for them and their patients.

Based on $DMTK’s December 2020 estimate of 2,900 billable samples processed the 2021 revenue estimates of $12 million will end up being way too low if the company continues on this same run rate however given the number of new sales reps it’s likely this monthly sample processing number continues to increase as well.






CHARTS:

For my newsletter subscribers my goal is to find stocks under $10 billion market cap with huge growth potential and attractive entry prices (aka great time to buy).

I definitely think $DMTK is one of those companies however the stock has had a nice run over the past month after the National Comprehensive Cancer Network announced their support and inclusion of $DMTK’s testing patch in their guidelines. This was a massive accomplishment for $DMTK and really sets the foundation for a bright future.

Personally I am extremely bullish on this company so I’m not going to wait for any meaningful pullbacks, I will continue adding to my position aggressively. Of course I wish I had gotten into this stock earlier but I’m glad I found it a few weeks ago and started buying right away.

$DMTK has tripled over the past couple months but this was justified given all the positive news and endorsements from medical professionals/associations. I firmly believe $DMTK is the kind of stock that could triple again over the next 18-24 months.






TRIALS and INTELLECTUAL PROPERTY:

Whenever you are investing in the healthcare industry it’s important to take note of intellectual property, namely patents, that will protect the company going forward. Due to the company’s strong IP portfolio and solid pipeline I do wonder if they could be an acquisition target someday. These types of transactions are impossible to predict however with so many large pharmaceutical and biotech companies sitting on piles of cash it’s always a remote possibility.




MANAGEMENT:

$DMTK’s Management Team [click here], Board of Directors [click here] and Scientific Advisory Board [click here] are each very strong and loaded with extremely experienced and credible industry veterans including a slew of MD’s and PhDs.





SHAREHOLDERS:

I like when the shareholder base has a nice mix of retail, institutional and insider ownership. I’m glad that 12.3% of $DMTK outstanding shares are owned by insiders including the founder — this gives them some skin in the game (no pun intended).





ANALYSTS:

I was only able to find three analysts that cover $DMTK and currently all of them have buy recommendations with the highest price target at $52 per share — representing some significant upside from current prices in the high $30s.



CONCLUSION:

First off I want to remind everyone that your health should always be a top priority. We only have one body in our lifetimes so we need to do our best to take care of it however some things are just out of our control which is why it’s so important to get regular checkups and be proactive when something does look right or feel right.

Over the next year as I send out dozens of stock ideas and writeups, some of them will be more exciting and risky than others. I think $DMTK belongs in this category. Last week my stock idea was $BAND which I’m still a huge fan of but that’s a more conservative, less exciting growth stock that should be able to grow revenues at 30-40% per year but that stock will never triple in a year or 10x in 3-5 years but $DMTK has the potential to do that in my opinion. I’m no expert in biotech or genomics and never will be but I’ve done enough reading and researching on $DMTK to believe this company is going to be a massive winner going forward.

On a more personal level, one of my Uncles is having surgery this week to remove cancerous melanoma from his face and last week one of my other Uncles died from melanoma….so it’s safe to say this disease really hits home for me and has me scared about my own chances of getting this horrible disease. I'm grateful that companies like $DMTK are out there trying to save lives by giving doctors and patients better products to detect these diseases earlier so we can get the treatment we need.

$DMTK is not one of those companies you can try to value on price to sales multiple because the stock will always look outrageously expensive. You have to look longer-term and have conviction that $DMTK will revolutionize the skin cancer detection industry and if you believe that (like I do) then $DMTK could easily be a $10+ billion company within 5 years which would be approximately 10x higher from here.

$DMTK has already raised an additional $140 million this month so you probably don’t have to worry about another stock offering for 3-6 months.

$DMTK already has strong pipeline of non-invasive genomic based testing products they’ll be able to push through their growing network for dermatology and oncology practitioners.

$DMTK already has received blessing from the National Comprehensive Cancer Network — this is the gold standard in the industry when it comes to patient care and clinical best practices.

Bottom line, $DMTK has created a faster, easier, cheaper, non-invasive, pain-free, more accurate genomic-based testing approach for early detection of melanoma which will prevent millions of unnecessary biopsies every year. I also wonder how many people hate the idea of getting a biopsy so they don’t go to the doctor and then end up with an advanced form of skin cancer or melanoma which is too late to treat. This is where $DMTK’s current smart patch and other upcoming non-invasive products could make the biggest difference.

I currently have a 3.5% position in $DMTK and with some new cash coming into my account this week I have every intention of buying more $DMTK, especially at or below current prices. I believe $DMTK could be one of my best performing stocks over the next couple years.

Finally got around to reading this, meh. I think the idea is cool, better skin cancer detection is great, but Idk if I see a TAM that's worthy of a 100x NTM EV/S. At it's revenue rate, this company honestly shouldn't even be public. Going from 5 to 10 million is 100% growth, sure, but this is venture capital levels of readiness. Enjoy the run in this one, but when the market comes back to normal, stocks like this will either grow into their valuations by sustained periods of consolidation (best case scenario) or get smacked down. Hopefully I'm wrong. No position either way.
 
Finally got around to reading this, meh. I think the idea is cool, better skin cancer detection is great, but Idk if I see a TAM that's worthy of a 100x NTM EV/S. At it's revenue rate, this company honestly shouldn't even be public. Going from 5 to 10 million is 100% growth, sure, but this is venture capital levels of readiness. Enjoy the run in this one, but when the market comes back to normal, stocks like this will either grow into their valuations by sustained periods of consolidation (best case scenario) or get smacked down. Hopefully I'm wrong. No position either way.

Glad to have folks like you doubling back and reading further into stuff. Personally I haven’t added into anything outside of $CURI & $MWK in nearly a month. I’ve learned the hard way going balls deep into anything even mild toe dips into anything at this point.
 
Glad to have folks like you doubling back and reading further into stuff. Personally I haven’t added into anything outside of $CURI & $MWK in nearly a month. I’ve learned the hard way going balls deep into anything even mild toe dips into anything at this point.
i could be damn wrong on dmtk and it could be a 10x. The good thing is if you think that’s the potential, you don’t need 1,000 shares to get a great return. Me personally, I just don’t see the appeal. 100% growth isn’t meaningful at this stage in the company’s growth cycle. And the tam isn’t large enough for my liking. Doesn’t mean it can’t work, I just think there’s better opportunity elsewhere for me and my risk tolerance.
The jury is still out on WOOF and AFRM, both underperforming after a great opening day.
didn’t look at woof but I’m a firm believer in owning the number 1 brand in a sector not the lesser known ugly sister. Affirm is an interesting idea, a little expensive, but definitely gaining popularity. Just had risks because it’s basically a bet on peloton.
 
Yeah I did the math out of curiosity

Say you bought 15 contracts for $500 just to be on the safe side it would have been 75 K in profit this morning

Man, 15 500 contracts sold at their high of $82.88 would have been 124K...

I wish I could invest like that but I think the 500 dollar calls were going for 1.4K a piece prior to closing I think.
 
Man, 15 500 contracts sold at their high of $82.88 would have been 124K...

I wish I could invest like that but I think the 500 dollar calls were going for 1.4K a piece prior to closing I think.
Can't even look at it unless you have a 6 figure account. Straight earnings bet, that expires worthless more often than not.
 
Hit piece on Plug

Never was a believer but if I've been long this entire time, I'd at least be trimming a little and raising stops.

Looking back at my history, I sold my 5 shares at 11.83. Plug was plugged. It wasn't doing **** for months, so I let it go. Now look at this **** wjoitaepjaofjawpofjaw[fjw[afjw[aep
 
I read through the comments on that Kerrisdale Capital tweet. How accurate are these guys since some of the comments made it seem like they're just another Citron. Short the popular stock at the moment and hope it sticks. Citron did that with SHOP, NIO, PLTR if I recall correctly and that didn't really work out well for them.
 
I read through the comments on that Kerrisdale Capital tweet. How accurate are these guys since some of the comments made it seem like they're just another Citron. Short the popular stock at the moment and hope it sticks. Citron did that with SHOP, NIO, PLTR if I recall correctly and that didn't really work out well for them.
People think it’s fun to rip on them because the stock pops up usually but garbage dies and legit projects live. PLTR actually came down $8 after Andrew shorted it. SHOP is the goat growth stock so that was a fail. Plug round tripping probably happens in a year or two when the EV buzz fades.

back in GDRX in my TOS account. Less size than before. 25 shares for now. May add back to 40 on weakness. We’ll see. Wanted to maintain some cash in both accounts and this actually works out from that perspective.
 
It's crazy to imagine but even with a PE of ~80 NFLX imo was undervalued and lagged well behind the other FANGS all 2H 2020'. It's my 2nd largest holding and I am long long term- I do see $600 as the new floor but I do warn against turbulence ahead, its just a volatile stock in general.....

I am looking into some EV plays for 2021 as I see it ancillary to the energy burst we will continue to see.

Energy I am In : NEE, RUN

Does anybody know anything about these players? SBE,CIIC,GOEV, XL?
 
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