Hi there.
I’m Brian Christopher, filling in for Jeff. As Jeff mentioned, he’s on a well-deserved vacation. Though, he’s clearly not taking it easy. Hiking 70 miles isn’t everyone’s idea of R&R, but kudos to those for whom it is!
On Wednesday, Jeff sold some positions in the portfolio — most of them for gains!
And we’ve received a lot of feedback from you on these.
Everyone likes gains, but at least one subscriber wondered why we sold so early. Since one question can represent the thoughts of many more, I wanted to address this.
The most notable example was with CryoPort (Nasdaq: CYRX). We certainly wish all recommendations would go as smoothly as this one.
CryoPort has jumped more than 100% since its October recommendation. But couldn’t it go further?
And the answer is, it could.
But this jump was bigger and better than even Jeff expected. As he noted in the original recommendation, he saw it jumping to $20 by 2020.
The consensus was shares could rise to $30 by 2021, with the average price target for Wall Street analysts at $27.
Yet shares trade above $34 as I write! That’s a huge jump … quickly.
But don’t get me wrong; it would be fine if the fundamentals lined up with the move. But they don’t.
In the original report, Jeff noted Wall Street estimates showed CryoPort’s sales would rise to $79 by 2021 and $136 million by 2022.
The current estimates, however, are much lower. CryoPort’s current 2021 sales expectations are 28% less than originally expected.
COVID hasn’t helped the company in that respect.
And today, the stock is trading at nearly 36 times sales. (For comparison, market darling Tesla trades for less than 10 times sales.)
That doesn’t provide us a whole lot of room for upside right now.
This is a crazy market, though. Shares could rise in the near term.
If you are on the fence about selling, you could implement a tight trailing stop and honor it if shares fall below that level. This will allow you to continue to participate in the upside.
I hope that adds some clarity to the logic used on this particular name.
Be on the Lookout for Deposits/Reinvestments
I want to alert you to dividend payments you either received in July or will receive in August.
Six of our names are paying us:
If you receive your dividends in cash, be on the lookout for these receipts.
Alternatively, if you reinvest your dividends, look for your positions to increase a bit in size.
Either way, nice work! Dividends are an important way to grow your wealth … and reduce your investing risk.
I wanted to mention a couple things about the newest holding on this list.
Thermo Fisher Scientific (NYSE: TMO) is a great company. It provides health-related products — instruments, consumables and software — and services to companies, governments and schools that focus on health.
Jeff recommended shares at the end of May, and the position is up almost 15% since then:
(Source: Bloomberg.)
But this doesn’t tell the whole story.
You see, Thermo Fisher is a serial acquirer. And it buys well.
Since May 2016, it has announced five greater-than-a-billion-dollar deals! The $11 billion deal to acquire Dutch medical equipment provider Qiagen is the most recent. It is currently expected to close on July 27.
Thermo Fisher’s ability to buy and, subsequently, execute has led it to a coveted track record. Take a look at its historical stock chart:
(Source: Bloomberg.)
These are the kinds of names we want to own: companies with management teams that know how to get things done.
When you have that kind of team, the market will eventually catch on. Even if it takes a while.
As an aside, I have a personal connection to Thermo Fisher. I received a job offer from them when I was in grad school in the early 2000s.
Its campus in Pittsburgh was lush and green. I had never lived in Pennsylvania, but I thought it would be cool to do so. Alas, the offer was in a place that wasn’t high on my list of locales where my wife and I wanted to live.
So, I became an exotic dancer for a spell.
Ha! Just kidding. I wanted to see if you were reading to the end!
As life adds years, we all have examples like this. And — if only for a moment — we may wonder: What would have happened if I took a different path?
It’s hard to say. But if I had joined Thermo Fisher, I know the equity in my employee stock purchase plan would be worth a lot more than I paid for it!
If you own TMO today, I believe you will find that to be the case in 20 years as well.
I’m going to wrap this up here. Thank you for reading.
Have a great week! I mean it. And don’t forget to smile.
I’ll be back with a portfolio update for you next Sunday too, as Jeff continues his adventure up the Appalachian Trail. If you have any questions in the meantime, shoot us an email at totalwealthinsider@banyanhill.com.
Good Investing.
Brian Christopher
Sr. Analyst, Total Wealth Insider
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totalwealthinsider@banyanhill.com