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Fuld's Finds: Uncovering Niche Trends
08/24/2016 10:00 am EST
With a long and varied background in the financial markets, Fred Fuld has now taken to write an investment blog focused on uncovering lesser followed, niche industries. Here, we talk with the editor of stockerblog.com about development stage opportunities in markets such as DNA slicing and virtual reality.
Steve Halpern: Joining us today is Fred Fuld, editor of Stockerblog.com, a fascinating website. How are you doing today Fred?
Fred Fuld: I'm doing great. How are you?
Steve Halpern: Very good. Thanks for taking the time. Could you tell our listeners a little about your background and your investment approach?
Fred Fuld: Yes. Well in terms of my background, I started out as a stock broker right out of college and did that for a few years. It was based in Southern California.
I then moved up to The San Francisco area and became a market maker on the floor of The Pacific Stock Exchange, the auctions floor actually.
And then from there I joined a money management company in San Francisco and was vice president of financial planning for that company.
I also started writing my own financial planning software, investment software, and started selling that, and left the firm and kind of went off on my own.
Currently, I'm basically retired from the financial services industry but I do trading for my own account and of course I have my investment blog that I've been running since 2006, so that's a brief overview of what I've done.
Steve Halpern: Now for those who haven't followed Stockerblog.com could you just give an overview of what investors could expect by following your site?
Fred Fuld: Yes. First of all I want to spell it out so that people realize that it's spelled Stockerblog.com. It's kind of a play on words of a stocker, and basically what I do is I look at various stocks in narrow industries.
I don't ever give any investment advice on the blog but I give ideas for people to research, and by narrow industries I'll give you some examples; like coffee stocks for example or cosmetic surgery stocks, or companies that produce and market wine and liquor, candy companies, chocolate companies, and that type of thing.
Steve Halpern: As you just alluded to there, you often uncover under-the-radar investment topics and one fascinating area you recently discussed was a specialized biotech market with the acronym CRSPR. Could you explain what this means?
Fred Fuld: Yes. I'd be glad to. CRSPR stands for “clustered regularly interest based short palindromic repeats”, and I hope that doesn't put people to sleep by me telling you that. I'm going to try to simplify it in really simple terms.
It's basically a technique for editing and slicing DNA which is much quicker, much simpler, and far less expensive than what has previously been done in the past.
Steve Halpern: Now you note that you don't give specific recommendations but rather ideas for people to do their own research on, but could you walk us through a brief overview of some of the stocks that are involved in this early stage technology?
Fred Fuld: Yes. I'd be glad to. First of all, I want to tell you that these are fairly low cap stocks and some of them are extremely low cap stocks, and if anyone is looking to invest in them they should probably look at them as long-term speculative investments, but for example: Editas Medicine (EDIT). It's based in Cambridge Massachusetts.
The stock has a market cap of a little over $800,000,000, has a lot of cash, about $229 million in cash, which works out to about $6.50 in cash for a share; however, it does have a debt load of 11,000,000, and they are one of the companies involved in the CRSPR technology.
Another one is called Intellia Therapeutics (NTLA). It's another pure play CRSPR stock and as a matter of fact it's collaborating with Novartis AG (NVS) and it's developing various projects which target liver diseases and so forth.
That stock has a market cap of about 700,000,000 and is debt free, and has cash of about $64 million, so those are just a couple of examples of stocks in the CRSPR arena.
Steve Halpern: Now we have time to cover one more area and one specialty sector that's attracting a lot of interest is virtual reality. Could you give us a brief overview of the attraction of this market and then perhaps highlight a couple of stocks that could benefit from growth in this area?
Fred Fuld: Yes. Well virtual reality and augmented reality which is kind of a related area has become real popular recently with the release of Pokémon GO, which I'm sure a lot of the listeners or readers have seen.
Back in July, the Nintendo (NTDOY) shares virtually doubled in just a few days due to the popularity of the Pokémon GO game -- which uses augmented reality.
There are a lot of companies that are involved in virtual reality and augmented reality but it may be a small part of their business like there's Adobe (ADBE), and Microsoft (MSFT), and Sony (SNE) that are involved in it, but in terms of some of the smaller companies there are; well, let me give you one example.
There's a company called Immersion (IMMR) which is using something called haptic technology and it's the creation of the sense of touch to the user through the use of vibrations or motions.
It's one of the leaders in haptic technology and utilized in some of the augmented reality and virtual reality technology. It does have earnings but it has an extremely high PE ratio. It is debt free and has a little over $2 in cash per share. The market cap is about $180 million.
Another company is Kopin (KOPN) and it makes and sells the virtual and augmented reality gaming and simulation products. It doesn't have earnings right now but it is debt free, has about $1.42 in cash per share, and a market cap of 150,000,000.
If someone's looking for a more conservative type of stock they might want to look at NVIDIA (NVDA), which makes the gaming graphics processors for the headsets such as the Oculus Rift.
Steve Halpern: Again, our guest is Fred Fuld, Editor of Stockerblog.com. Thank you so much for your time today.
Fred Fuld: Thank you.
Editor’s Note: Fred Fuld will be a featured speaker at the San Francisco MoneyShow on Thursday, August 25, offering a Q&A session as well as a one-of-a-kind look at stock market trivia. To register, click here.
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