The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
The drugmaker announced that its experimental melanoma vaccine combined with Merck
(MRK) cancer treatment Keytruda cut the risk of skin cancer recurrence by 44% compared with a treatment of only Keytruda. Moderna rallied 7.5% in the premarket, while Merck gained 1.9%.
Next week is going to be pretty volatile for the NAV.
CPI numbers on Tuesday and the Fed decision on Wednesday.
If CPI comes in higher, then expect holding of SMT to tank with the expectation of more meaty hikes in FED rates.
If we see another drop like the one in October, then Stocks will rally. If on the back of that, the FED only raises rates by 50bps, then we'll get another bump and then I'd say a few more days of a customary Santa Rally.
Tuesday + Wednesday are going to tense!.
Cash and cash equivalents of £471.6 million and treasury deposits of £131.0 million, decreased
by £15.5 million over HY22, due to operating losses partially offset by increased LSRT gross
profit and cash proceeds from the DHSC settlement.
You're right in that the last half didn't show much movement in liquidity. But its the cash flow from ops which is king. Don't want to be raising cash through dilution.
You know, if cash flow wasn't ever going to be a concern, why are they only going to reach EBITDA neutral by 2026? WHy not earlier? Gross Margins too low?
Most of their top holding rose materially yesterday, so I'd expect the NAV to track that. MRNA was only 1pc up or so at close.
TSLA was up 7pc, ASML and ILMN were up 4pc.
Of course, SP might decide to do the opposite and widen the discount.
Fingers crossed Powell only gives a 50bps rise in rates in Dec. 13th Dec is when the next CPI numbers are out. FED decides interest rate on 14th.
Bah humbug
Its more of a dividend stock. If they materially reduced the float, then perhaps it would help, but its a reliable income stock.
Plot the chart over 10y, and you'll see it barely rose above 3. Why would it jump to £3.90?
Compared with PACBIO, ONT really hasn't offered the markets something exciting to raise its image.
IPO is long gone and the SP has deflated. Still burning cash. Probably another dilution on the cards.
Whilst I'd be tempted to buy another 1k shares, the dilution threat is still there.
FX is going to be a thorn just like others have commented, though if you're in the US, buying consumables and their ION kits has never been cheaper. So ironically it could turn out to be a blessing.
With dividends, you're in control of what you do and how you treat the capital return.
Share buybacks should have the effect of raising EPS, but the market decides.
In the end, if you can lower the float sufficiently, then you'll see a material change in the SP. But few companies do that and don't forget that the float may stay flat regardless of buybacks owing to equity plans offered to employees.
Looks like the fund managers' decision to reduce exposure to China equities has turned out to be positive, otherwise this would have fallen harder like Fid Special China situations.
That said, US stock market looks like its going to fall due to the same reasons, so SMT will probably fall harder in the afternoon.
The way I look at inflation is, prices have risen looking back, but the rate of inflation will decline owing to decline in what people are prepared to pay.
Oil has already gone back to pre-war levels (almost). Wholesale Gas prices in the UK have fallen, though that might start to rise as we move through winter. NVIDIA GPU cards have fallen in price, resulting in supply chains moving again for other semiconductors to be manufactured and build inventories.
As unpopular as it sounds, need wage restraint in order to help inflation abate.
I don't think we're going to see reduction in prices across the board, namely.
If the rate held what it currently is, then we'll see another 10pc rise in the basket of goods that gives a measure of inflation, 12m from now. Has to stop at some point.
Not convinced interest rates are the right tool however.
Agree with that.
It doesn't have exposure sadly to investors. They're growing. Paying a healthy dividend. Disciplined financial management.
Ceramics business is moving forward, particularly EV applications.
How do you raise the profile of this company? reddit?
Something is a miss that the top hitters in SMT trust weren't trading yesterday.
Yet TSLA is number 2 on their list behind MRNA, yet the NAV dropped the day before and today.
TSLA rose 7%, despite MRNA dropping just over 1pc. ASML and Mercado LIbre rose too.
Did all the lowest holdings fall materially that it dented the NAV 2 days in a row?
As for the SP, well, that trades on the open market and that's merely due to Buy/Sell ratio. Can't do anything about that. Money Managers will do as they please to meet their targets and depending on when they bought, liquidating at the moment might be wise.
In the US, the bulk of tax-loss selling should be over. In order to participate in the Santa Rally (mid-Dec), they have to have sold their underwater shares mid Nov in order to buy back before mid-Dec and avoid breaking Wash rules. So the NAV (IMO) should rise in the coming weeks.
I agree with @Walp. Depends on your horizon. Its down 50% from peak in Nov 2021. That's quite staggering. ASML for example is guiding some impressive revenues 2024 and beyond. TSLA will keep growing for obvious reasons.
Not sure about MRNA. Huge numbers in the coming year, but its their non-COVID pipeline that needs to hit milestones and gain approval. Not sure about 8% holding in that.
ILMN is a bit funny. They have big numbers and they're present in clinical diagnostics, but they have some serious threat with future sequencing technologies. A lot of criticism and skepticism about their long read offering in the pipeline. I'd be careful with them. If they're allowed to keep GRAIL, then they'll be fine.
AMZN is a good floor. If anything, I'd make them and Microsoft the biggest holdings. NVDA is also ata good price.
One turning tide is the October CPI numbers. FED also talking about a 50bps rise in Dec. If they hit US markets with 75bps, then I'd say they'll wait for a more data before moving on rates again.