Gene editing stocks soar after a breakthrough… Europe eyes zero-emission cars by 2035… another speedbump for Tesla… a sector benefitting from the reopening
With lots going on in the news recently, in today’s Digest, let’s bounce around to a few of the biggest stories impacting your portfolio.
***Gene editing stocks soared yesterday in the wake of breakthrough news
In last Friday’s Digest, we noted how exposure to cutting-edge technology stocks is going to be critical for your portfolio this decade.
From last Friday:
Keep in mind, (the tech/growth sector) is a wide universe, from mind-blowing consumer goods, to blockchain innovations, to biotech breakthroughs, and everything in between.
Chalk it up to lucky timing, but we received one such biotech breakthrough yesterday.
Early data from Intellia Therapeutics (NTLA) and its phase 1 trial of a CRISPR candidate showed the ability to genetically edit cells inside a liver.
If you’re new to CRISPR technology, it stands for Clustered Regularly Interspaced Short Palindromic Repeats. It’s a powerful tool for editing the genome.
From Live Science:
Its many potential applications include correcting genetic defects, treating and preventing the spread of diseases and improving crops.
Returning to the breakthrough, up to now, CRISPR technology was restricted to editing cells outside the body or in the eye. Yesterday’s news changed that.
From Seeking Alpha:
This time around, researchers injected a CRISPR drug into the blood of people born with transthyretin amyloidosis, a destructive disease that causes fatal nerve and heart disease.
The results showed that the editing technology was able to nearly shut off production of the toxic protein generated by their livers by knocking the gene’s activity.
Intellia’s CEO, John Leonard, said: “This is the first time CRISPR has ever been infused into a patient and the first time we’ve been able to target a gene successfully.”
Intellia stock ended the day up 50%. Fellow gene-editing stocks Beam, Editas, and CRISPR Therapeutics climbed higher on the news, popping 16%, 5%, and 6%, respectively. As I write on Tuesday, they’re all generally holding their new gains.
We’re going to see amazing things this decade in biotech – and equally-amazing wealth-creation from the companies that end various diseases and ailments as we know them.
We’ll say it again – make sure your portfolio has exposure to this exciting sector.
***RIP, internal combustion engine?
Politico has reported that the European Commission is debating setting a zero-emissions target for vehicles sold beyond 2035. That would be a death-knell for gasoline vehicles, but also for plug-in hybrids.
While many carmakers are starting to produce zero-emission electric cars, only Volvo and Volkswagen have strategies in place to transition to electric by the end of the decade, according to a new study from green mobility NGO Transport & Environment.
VW unit Audi will reportedly stop selling internal combustion engine (ICE) cars in Europe from 2026.
VW’s German rivals Daimler and BMW are among the least prepared to dump the ICE.
The industry said the Commission’s plans would force a rapid switch to battery cars, without considering alternatives.
Our macro expert, Eric Fry, recommended Volkswagen to his Investment Report subscribers back in February. The official position is up 55% as I write Tuesday morning.
When Eric made the recommendation, he compared Volkswagen to Tesla and highlighted the absurd difference in valuations between the two companies.
As one example, Eric suggested we look at how the two companies’ stock prices translated into an effective “cost-per-vehicle-the-company-produces-each-year.”
As of the time of Eric’s research, this price for Volkswagen came in at $11,000.
And for Tesla?
The price came in at about $1.7 million per vehicle…which was 149X more expensive than Volkswagen.
Since Eric’s recommendation, while Volkswagen’s stock is up 55%, Tesla’s has fallen 15%.
***Speaking of Tesla, it just ran into yet another speedbump
From CNN Business:
Nearly all of the vehicles that Elon Musk’s electric carmaker has built and sold in China since opening a Gigafactory in Shanghai are being recalled over concerns about the cruise control system.
The problem, according to Chinese regulators, is that the system can be accidentally activated in certain models, resulting in unintended acceleration.
The recall includes 35,665 imported Model 3 vehicles and 249,855 Model 3 and Model Y vehicles made at the Shanghai plant, or almost every single locally made car that Tesla (TSLA) has sold in China since January 2020.
Fortunately for Tesla, the issue can be resolved through a software update that doesn’t require customers to return their cars. So, many Tesla owners may not even know there was an issue. Still, it’s another black eye for the electric vehicle giant, and Musk, in a recent string of missteps.
As legendary growth investor, Louis Navellier, reported last week, Tesla fans were disappointed when Musk abruptly canceled the release of its highly anticipated Model S Plaid Plus with a Tweet on June 6.
The Model S Plaid Plus was supposed to be the fastest, most powerful, and priciest version of the company’s Model S. Priced at $149,990, it was to feature a range of 520 miles…and the ability to speed from 0-to-60 mph in less than two seconds.
Instead, the company has begun delivering a new Model S Plaid that has only a 390-mile range and 1,020 horsepower, though it still sprints to from 0 to 60 miles per hour in just two seconds…
As someone who owns more than a few high-performance vehicles, I can tell you that the engineering geeks I know do not want to get a new Model S Plaid instead of a Model S Plaid Plus, and will likely ask for their deposits back.
We’ll continue watching Tesla to see if this EV giant can re-find its footing.
By the way, speaking of Louis, a quick reminder to join him tomorrow at 7 PM ET for a special, live event called the Accelerated Income Project 2021.
As we detailed in yesterday’s Digest, Louis says he’s ready to reveal a strategy he’s developed that helps investors generate massive, consistent, hold-in-your-hand cash payouts from the markets…that doesn’t require a huge, initial outlay of cash.
To join Louis for this free event tomorrow, just click here.
***Finally, the reopening is driving profits for this “in-person” trend
Returning to Eric, his Investment Report recommendation earlier this month offers a way to benefit from the “social proximity” trade.
Now that the world is opening for business and human interaction once again, perfumes, shampoos, and many other personal-care products are returning to our shopping lists.
Cosmetics sales for the 12 weeks ending May 22 surged nearly 25% from a year ago, according to Nielsen data.
These surging sales illustrate why the stock I just recommended offers a textbook “social proximity” trade. As the pandemic subsides and social distancing recedes, its products will attract growing demand.
Validating Eric’s thesis is a recent report from Business Insider:
Fragrance sales were up 45% in the first quarter of 2021 versus the year prior, according to data from market research firm NPD Group…
According to NPD’s data, the fragrance category climbed back into the positives in August of last year and stayed that way through the of the year before surging in 2021 — (Larissa Jensen, vice president and beauty industry advisor at NPD Group) said she expects that sales will be “out of control” throughout the second quarter of this year…
Eric’s recommendation is among the world’s largest fragrance and cosmetic companies, which puts it directly in the path of these “out of control” sales expectations.
It’s also a turnaround play that has been putting up some impressive numbers already. Eric notes that during the most recent quarter, its e-commerce sales grew nearly 30% year over year – spurred by a doubling of sales on Amazon.com.
The pick is off to a good start, climbing 5% since Eric’s “buy” date earlier this month, while the S&P is up only about 1% over the same period.
For more on this company as an Investment Report subscriber click here.
We’ll keep you up to speed on these stories and more here in the Digest.
Have a good evening,