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Fortune Hunter

Portfolio

Note: If a stock has gone beyond my buy-up-to price, do not buy into that position. Wait for me to issue a new recommendation, or wait for the stock price to come down. Only have 10 to 12 stocks in your portfolio at one time, and don’t put any more than 8.5% to 10% of your money into any one monthly portfolio recommendation. Only put 2% to 3% of your money into my Special Report recommendations. If a position doesn’t have a “Close Price,” it’s still active and we’re still tracking it. Can’t see the portfolio? Try the print preview

Trade Alerts

Your Edge Over Other Investors (click to expand)

April 9, 2020

Welcome to the 8-Figure Fortunes family!

I’m excited that you’re with us and grateful that you joined our newsletter.

My job with this service is onefold, and that’s to help you achieve your financial goals.

To do that, I want to share with you an investing approach that I spent four decades developing.

Every stock that goes into the 8-Figure Fortunes portfolio has to pass my four Alpha filters.

In today’s video, I show you what those four filters are — and how using them gives us a huge advantage over other investors.

Simply click on the “play” button below to watch the video…

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To read a transcript of today’s update, click here.

Important Changes to Your Fortune Hunter Portfolio

There’s no secret that we’re living through unprecedented times with this coronavirus outbreak.

No one could have predicted that the virus would appear or that it would shut down many global economies.

Businesses have been severely impacted by the pandemic, and we’ll likely see several down quarters because of it.

In order for a business to thrive once this economic shutdown is over, it first has to survive.

To that end, I’ve researched the stocks in your Fortune Hunter portfolio and picked the four strongest companies that I feel will weather out this storm.

The remaining stocks participate in weak industries and don’t have the financials to make it through this down market.

That’s why I suggest you take the following actions…

  • Sell Odyssey Marine Exploration Inc. (Nasdaq: OMEX) at the market.

  • Sell Dixie Brands (USA) Inc. (OTC: DXBRF) at the market.

  • Sell Trulieve Cannabis Corp. (OTC: TCNNF) at the market.

  • Sell Charlotte's Web Holdings Inc. (OTC: CWBHF) at the market.

  • Sell InMode Ltd. (Nasdaq: INMD) at the market.

  • Sell American Airlines Group Inc. (Nasdaq: AAL) at the market.

  • Sell MGM Resorts International (NYSE: MGM) at the market.

  • Sell Iron Mountain Inc. (NYSE: IRM) at the market.

If you want to continue to follow any of these stocks, that’s your call.

However, I won’t be tracking them in the portfolio going forward, nor will I provide any future updates on these companies.

Instead, I suggest that you supplement these stocks with the ones in my 8-Figure Fortunes portfolio.

Many of these companies now trade below the price that I originally recommended them at and are offering us incredible bargains to their underlying worth.

In fact, some of these companies are dollar bills trading for $0.30 or even $0.20! But you’ll need to buy into them soon … before their share prices start to climb again.

To see the stocks in the 8-Figure Fortunes portfolio, click here.

For more information on the four remaining Fortune Hunter positions, click here.

Check out My Latest YouTube Video!

Before you go, I wanted to let you know that I released a new video on my YouTube channel.

In markets like the one we’re in, it’s all too easy to get shaken out of your positions. But it’s during times like these that Mr. Market offers you some of the best profit-making opportunities you’ll ever see.

In this six-minute video, I share with you why now isn’t the time to panic — it’s the time to invest.

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If you have any questions or concerns you’d like me to address in my next update, you can write my team at 8figure@banyanhill.com.

We’re always happy to hear from you.

Regards,

Turn Your Images On
Charles Mizrahi
Editor, 8-Figure Fortunes


Let the Market Do It’s Magic (click to expand)

March 31, 2020

We did the hard part. We sold investments that weren’t working as the markets faltered in late February and early March, and we reloaded when things looked absolutely awful. Now, with a slate of great assets purchased at bargain prices, we can wait for the markets to move higher as investors start looking past the coronavirus pandemic scare and to what comes next.

I don’t expect things will return to normal in short order. There will be dislocations, particularly for small businesses and the real estate market. But the stock market is a forward-looking machine, so it should bounce faster than the general economy.

I also don’t think we’ll jump back to the previous highs, but that’s fine with me. It’s why we look for specific opportunities in areas that are beaten down beyond what’s warranted by the situation, or those companies that will earn big returns on both the current situation of everyone at home and the eventual rush back to the office and school.

The chipmakers are doing quite well as people realize the huge tech investment needed to keep up with people working and playing at home. Both Advanced Micro Devices (NYSE: AMD) and Nvidia (Nasdaq: NVDA) are moving in the right direction. Facebook (Nasdaq: FB) announced weaker ad sales, but with such a huge jump in traffic, that can still translate into better engagement and sales down the road.

InMode, Ltd. (Nasdaq: INMD) got hammered as investors worried about consumers spending on discretionary items. However, it should rebound with a vengeance as the economy reopens and Boomers, still wanting to look good with minimally invasive procedures, flock back to the doctor’s office.

Our holdings also cover the travel industry, a Chinese stock, cannabis and underwater mining. I think we’ve got a great list of contenders that can hand us outsized returns in the weeks and months ahead!

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Trade Alert: Here’s the Rebound (click to expand)

March 24, 2020

Actions to take:

Buy MGM Resorts International (NYSE: MGM) at the market

Buy Nvidia (Nasdaq: NVDA) at the market

Buy Advanced Micro Devices (NYSE: AMD) at the market


The economic and financial worlds are not the same, but they are connected, and they’re both changing by the minute. We’re getting reports of rising deaths in Italy, and things are going to zero. As states issue shelter-in-place orders, people think about prepping for doomsday.

And then Congress gums up the stimulus bill.

But just as quickly, President Trump announces that he thinks the federal government will relax its guidelines within weeks, not months, the Fed does its version of Mario Draghi’s “Whatever it takes” statement, and Speaker Pelosi claims to be close on a new deal. The world suddenly looks brighter.

For our part, we’ve been doing the hard bit of investing, which is buying when you feel like puking. We bought Luckin Coffee (NYSE: LK) and American Airlines (NYSE: AA) a bit early, then added Starbucks (Nasdaq: SBUX) and Facebook (Nasdaq: FB) as things worsened. And we’re buying more.

I tried to get a trade alert out on Monday to buy Nvidia (Nasdaq: NVDA) and Advanced Micro Devices (NYSE: AMD), but I was too late. We’ll add MGM Resorts International (NYSE: MGM) to the mix as well.

Actions to take:

Buy MGM Resorts International (NYSE: MGM) at the market

Buy Nvidia (Nasdaq: NVDA) at the market

Buy Advanced Micro Devices (NYSE: AMD) at the market


Nvidia and AMD are benefiting from all the trends that existed before we knew the term coronavirus. Plus, they now have the added benefit of people staying home for an extended period of time, using their computing devices. Gaming is ratcheting up a level, and people want better computers. These companies are getting additional revenue that shouldn’t cannibalize what they were expected to make before the virus panic.

MGM Resorts, like other casinos and travel companies, have been crushed. Empty hotels and casinos don’t pay bills, but with help from the Fed and federal government, MGM should live to see another day, and business will get back to normal.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Trade Alert: Buy Starbucks (Nasdaq: SBUX) (click to expand)

March 19, 2020

Action to take: Buy Starbucks (Nasdaq: SBUX) at the market

Across America, Starbucks can only do take out or delivery orders, but it won’t last forever. Not to mention, it has reopened its stores across China. Now is a great time to buy the casual coffee chain at 40% off of its 52-week high.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Trade Alert: Buy Option on Facebook, or the Stock (click to expand)

March 18, 2020

Action to take: Buy 1 Facebook September 18 130 Call up to $33.00

or

Action to take: Buy Facebook (Nasdaq: FB) at the market


Facebook use will surge as people stay at home under some level of shelter-in-place directive, which will boost the company’s advertising revenue. The longer this goes on, the more Facebook benefits. I like the options because they limit loss to the premium paid. Yes, they’re expensive, with about $17 in time premium, but that’s the price of limiting the downside.

For investors who don’t invest in options, you can simply take a position in Facebook shares.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Let’s Talk Coronavirus (click to expand)

March 17, 2020

It’s all virus, all the time. And rightfully so. Whether or not this is a global pandemic that potentially could wipe out 1% to 2% of the U.S. population is not the issue, it’s the government response and the psychology of investors.

I wrote last month that the numbers don’t add up. It’s still true. In China, the mortality rate among those infected is 4%, which is wildly higher than in Germany, where it’s 1%, or Norway, where it’s 0.3%. Granted, Europe is behind China in terms of the disease running its course, but the numbers are still off. And there’s a good reason.

No one is testing a randomized sample of the general population.

To determine the actual mortality rate, we have to know how many people have it, not just those who present themselves for testing. The CDC is clear: Almost everyone who gets it will recover, and many of those who get it will not have a severe case. As it stands, we only know about a small sample of the population, when in all likelihood many thousands more people have it and simply got better, just like most people do every year with common colds and influenza.

But the U.S. and other governments have chosen this particular flu, unlike Swine Flu from 2009 which infected 60 million Americans and killed almost 13,000, to put in place severe restrictions. The economic consequences will be severe, damaging large businesses like airlines and cruise lines, and destroying small companies like restaurants and coffee shops.

The Fed can’t fix it, as it proved by taking extraordinary measures several times, yet the markets still fell. And the Federal government can’t design a policy tailored enough to help those hurt by the crisis without significant overreach.

We need two things: more testing, and time.

Roche developed a test that can be done on its automated lab machines in 3.5 hours. The machines can handle many samples simultaneously, rendering results on up to 4,100 samples per day. There are 100 machines installed around the U.S.

As of late last week, we’d only tested 13,000 people. This week we can test more than 400,000 per day. We still have to get the samples, and get them to labs, but this is a tremendous improvement.

Once we know who has it, we can better limit contact, and we can quickly rule people out.

As for time, flu viruses tend to fall away beginning in April, that’s why it’s called “flu season” from October through March. As to why this happens is up for debate. Maybe it’s because kids aren’t in school, or perhaps vitamin D plays a part with more people in the sunshine. Or maybe it’s because we spend more time outdoors due to Daylight Savings, or something else entirely. There’s no rule that says this flu has to follow that same pattern, but if it does, it would be a big help

Until then, we can only make the best of what we have, which are a few positions left as we keep our powder dry for the next set of opportunities.

We’ll hold our current batch, including Charlotte’s Web Holdings (OTHOTC: CWBHF), Trulieve (OTHOTC: TCNNF) and Odyssey Marine (Nasdaq: OMEX) because of their unique places in their respective markets. InMode, Ltd., which has retraced all the way back to its IPO levels, is a victim of the current virus craze and should return with a vengeance. We still have an aging Boomer population, and millions of them would like to get their skin tightened and muscles toned without an invasive procedure. The worry with InMode is that the hit to the markets will remove some of the excess funds people used for such services. It’s possible, but if we rebound quickly, InMode should be near the front of the pack.

Speaking of rebounds, I’m still very positive on Luckin Coffee (Nasdaq: LK). The number of new virus cases in China has fallen dramatically, which should allow that country to return to some semblance of normal in the weeks and months ahead. A morning cup of coffee will be part of that routine, which will drive Luckin Coffee higher.

We also picked up shares of American Airlines as a play on this virus scare ending sooner than people think, and the airlines coming out of it better than people expect. The airline industry just requested a $50 billion bailout from the federal government. I’ve no idea if it will happen, but it seems unlikely that President Trump and Congress would want some of the major players in that space to go under. This still looks like a great play.

In addition to Luckin Coffee in China and American Airlines here at home, I’m also watching companies like Apple (Nasdaq: AAPL). The company just announced it will close all stores through March 27, but will remain open online. The stock is off more than 23% from its February high. It’s possible that fewer consumers will buy Apple products in the months ahead, and that the company suffers a shortage of key components for a few weeks. But it’s worth noting that Apple still buys its own shares, and has a lot of cash on the books. When this market turns around, Apple should run higher.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Trade Alert: Out of Patience with Pot (click to expand)

March 10, 2020

I wonder if the Russians learned their lesson? After they refused to sign on to an oil supply cut with OPEC to the tune of 1.5 million barrels per day, the Saudis responded by slashing their oil prices and promising to flood the market with supply. Oil prices dropped 30%, which cratered the equity markets. When asked why they did it, the Saudis were clear – to take market share from Russia.

The pain that spilled over from the energy markets infected everything, and drove interest rates into the ground. 10-year and even 30-year Treasury bonds traded with a zero handle, as in, less than 1% yield. Looks like we’re on a one-way train to zero rates.

Our stocks took their licks. Investors knocked newcomer American Airlines (NYSE: AAL) down another 10%, and even smacked Luckin Coffee (Nasdaq: LK) and InMode, Ltd. (Nasdaq: INMD). I think these stocks will do quite well when the current fear in the markets dissipates.

I’m not convinced about Superior Industries (NYSE: SUP) and some of the other pot stocks.

Investors are leaving Superior because they fear auto sales will drop dramatically this year, which is entirely possible. I think Superior will still be able to make headway in paying down debt, but the stock might not reflect any good news for another year.

In the cannabis sector, Joe Biden’s surge in the polls is bad news. Both Biden and Trump are steadfastly against legalizing marijuana, so it’s unlikely we’ll get a change in federal law over the next five years.

With that said, it’s time to clean house. We’re going to sell Superior Industries, as well as two of our cannabis holdings, KushCo Holdings (OTHOTC: KUSH) and Harvest Health (OTHOTC: HRVSF). Dixie Brands (OTHOTC: DXRBF) is in the middle of a merger with BR Brands, so we’ll see where that lands.

I’m holding on to Trulieve (OTHOTC: TCNNF) and Charlotte’s Web Holdings (OTHOTC: CWBHF). Trulieve remains a well-run, profitable dispensary focused in Florida, and Charlotte’s Web should do very well as the leading brand in CBD oil when the exemption for the product as a dietary supplement winds through Congress.

Actions to take:

Sell Superior Industries (NYSE: SUP) at the market

Sell Harvest Health Enterprises (OTHOTC: HRVSF) at the market

Sell KushCo Holdings (OTHOTC: KUSH) at the market

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Trade Alert: Buy American Airlines (NYSE: AAL) (click to expand)

March 4, 2020

The coronavirus scare isn’t over, but it will be soon. At some point, a company will develop a therapeutic and/or summer will arrive, and the spread of the virus will slow. We hope for the best, and also want to position ourselves to ride the relief rally in an industry that has been hard hit. Let’s pick up some shares in American Airlines. It should be able to restore service in quick order, unlike the cruise lines.

Action to take: Buy American Airlines (NYSE: AAL) up to $18.50

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Snap Back (click to expand)

March 3, 2020

The markets dropped over 10% last week, but then recovered some ground on Monday. Is it over? It’s hard to tell. Investors appear to be focused on the Fed, as it might cut rates 25 basis points before its meeting this month and then cut another 25 basis points at the meeting. It’s unlikely that a rate cut will make people buy more stuff, but it would bring rates more in line with those of other countries, and at least relieve some of the pressure on the inverted yield curve.

None of that will make the economy grow faster, but we’re past that. Everyone from central bankers to market pundits have given up on growth exceeding 2% per year. Now, the goal is to drive the equity markets as high as possible.

We’ll see how that works out. Eventually, investors will notice that rising equity values don’t match profit expectations in a low-growth world. That day of reckoning might be close at hand. When the virus scare fades, investors will be asking themselves if stocks are worth record levels with global growth estimated to be less than 2%.

Uneasiness in the markets over the possibility of slow growth for several quarters, coupled with the presidential election in the U.S., could make for a volatile 2020.

We had a little bit of good news in our neck of the woods. Superior Industries (NYSE: SUP) reported earnings and posted a loss of just $0.08, which was better than expected. Revenue dipped as auto sales slipped last year, but the company was able to shift sales to larger, and more profitable wheels. The company generated $163 million in free cash flow, and paid down $84 million in debt, while writing off a slug of good will and non-cash items. The stock perked up a bit on the news, but then gave in to market pressure on Friday. The stock remains tremendously undervalued. As it digs out of its debt, it should start to climb.

InMode, Ltd. (Nasdaq: INMD) has started acting like a pot stock, and that’s not a compliment. The company posted great earnings and then did nothing but march lower. There’s no news on the company. Some analysts have wondered if consumers will demand as much cosmetic work if economic growth rolls over, therefore reducing the demand for InMode’s products. The only way to fight that perception is with continued growth, which is exactly what the company plans to do.

Luckin Coffee (Nasdaq: LK) has jumped over $40 twice, and then dipped both times. As I suspected, the stock is giving investors another chance to buy below $40. This is still a great play for the current virus scare. When the quarantines and lockdowns in China are lifted, consumers will be desperate for anything that lets them resume a normal routine. There are few things more “normal” than a morning cup of coffee.

I keep waiting for the cannabis space to bring us some good news. We’ve been patient for almost a year, but my patience is nearing the end. Equities are rebounding, but without the pot stocks. We might have to make a change soon.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Markets Are Getting Sick (click to expand)

February 25, 2020

The coronavirus, now named COVID-19, has claimed more than 2,600 lives and has infected almost 80,000. That’s not even the worst part, though. Pockets of infected people have popped up in Italy, infections have skyrocketed in South Korea and more than 5 people have died in Iran. The worry about a global pandemic looks to be turning into a reality.

On Monday morning, Dow futures pointed down almost 900 points as investors fretted about China’s GDP going backward through at least the first half of the year, and what that might mean for the world. No one can say for sure, but with the major indices reaching record highs last week, now seems like a great time to take or protect profits.

Our holdings don’t necessarily move with the major indices, but they do trade in sympathy with major shifts. So, it’s no surprise that we dropped along with most other stocks.

Our Holdings

It’s not reflected in the share price, but Charlotte’s Web Holdings (OTCOTH: CWBHF) got some good news last week when the National Animal Supplement Council gave its seal of approval to the company’s CBD oil pet food additive. The development gives Charlotte’s Web added strength in an ancillary product line as it waits for more direction from Congress on its main business.

Also in the cannabis space, Trulieve (OTHOTC: TCNNF) opened its 44th and 45th dispensaries in Florida, in Pensacola (the second in that city) and Stuart. The growth shows that Trulieve’s organic expansion plan is paying off. At a time when other companies are cutting back and trying to remain solvent and relevant during the retrenchment, Trulieve is growing.

Our latest addition, Luckin Coffee (Nasdaq: LK) made a run above $40, but has since given up ground as COVID-19 spread. The stock dipped near our buy-up-to price of $37 before bouncing. It still might give us another chance to pick up shares below that level.

Superior Industries (NYSE: SUP) will report earnings on Friday, February 28. The company carries a lot of debt, but generates free cash flow and suspended its dividend last fall before we bought it. If the firm shows progress at using the cash flow to pay down debt, then it could start to move higher.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


An Update on Our Current Holding During Coronavirus Scare (click to expand)

February 18, 2020

I’ve written in several places that the math surrounding the coronavirus doesn’t add up. Outside of China, the death toll is around 0.8% of infections, or 5 deaths among 600 infected. Inside China, there are 70,000 infections and 1,770 dead for a mortality rate of 2.5%. It’s hard to believe that the Chinese are more likely to die than others. But it’s really easy to believe the Chinese are under-reporting infections.

If the same mortality rate among the infected outside China held true inside the country, then there would be more than 210,000 infections there.

I expect the numbers to get worse before they get better.

The Effects of the Coronavirus

So far, the markets don’t seem to care, but that could change. China remains the second largest economy on the planet and was already decelerating before the virus took hold. Today, there are more than 780 million Chinese living under some level of quarantine or restriction, with hundreds of millions encouraged to stay off the streets and not congregate in groups, and millions are told not to report to work. The effects will be felt around the world. Those who source materials and goods from China will have trouble getting what they need, while those who sell to China will see a dramatic drop in demand.

Just ask the oil companies.

China is the largest oil importer in the world. As the domestic economy slows down because of the virus, consumers are buying much less gasoline. Refiners don’t need as much raw oil. Storage facilities are filling up. Tankers are anchored offshore, unable to unload their cargo.

Domestically, Chinese retail companies are trying to survive on deliveries, but that’s only a partial fix. You can’t deliver a movie theater. Some business is postponed, while much of it is lost forever.

The good news is that summer is on the horizon and, like other viruses, the coronavirus should fade for several months. This will give researchers more time to come up with a vaccine, and also give the Chinese economy a boost.

Update on Luckin Coffee

This situation is exactly the sort of thing we look for in Fortune Hunter. We want unusual situations that create asymmetrical pressure in the market, where investors react for the short term. The turmoil in China is causing massive problems for domestic retailers, but it won’t last. That’s why I sent you a note a couple of weeks ago to pick up shares of Luckin Coffee (Nasdaq: LK).

The Chinese coffee company is competing with Starbucks, and pulling ahead. Luckin already has more stores in China than Starbucks, and is growing faster. The company is doing well with unmanned stores, which should be more attractive during the virus scare. There’s no doubt that the coronavirus took a chunk out of Luckin sales that can never be replaced, but the company should return to its growth trajectory soon after the scare fades.

As news of the coronavirus spreads, the stock fell from its all-time high of $50 to the low $40s, then the high $30s. That’s when noted short-seller Muddy Waters issued a fraud alert on Luckin Coffee, claiming video that proved the company overstated sales by almost 70%. The shares dumped again, falling to the low $30s, which is when we jumped on it.

Soon after the report, Citron Research, another firm famous for short-selling, issued its own notes supporting Luckin. The company also rejected the Muddy Waters report and said that up-to-the-minute payment information through third parties could confirm all revenue reports.

The combination of the virus and the negative research still weigh on Luckin Coffee, but both should pass and hand us a nice profit.

We bought Luckin Coffee on February 3rd with the stock trading just under $32. I put a buy-up-to price of $37, and it now sits above that at $38. If you haven’t purchased yet, buy with a limit of $37. The spread of the virus could push the shares down in the weeks ahead and give you another chance to get filled.

In addition to Luckin Coffee, I also recommended buying back the half position of InMode, Ltd. (Nasdaq: INMD) that we sold at $50 a few months ago. The stock briefly dropped under $40, rebounded to $50, then fell back again. We picked up our shares in the low $40s, before the stock moved higher.

The company reported positive earnings this morning. It achieved record revenue of $47 million in the fourth quarter of 2019, a 63% increase over 2018, with $19 million in net income compared to essentially flat income the year before. For the year, revenue increased 56%, and gross margins hovered around 85%. That’s not too shabby. Before the markets opened, the stock jumped to $47, but then fell back and gave up a little ground. It could be part of the general downdraft today, or perhaps investors who were looking for a quick pop are getting out. I think it has a lot further to go on the upside.

We’ll stick with InMode, Ltd. for a while and see how high this company can climb.

Other Holdings

The cannabis stocks are still bouncing around near their lows as we wait on legal developments. A House committee has recommended treating CBD oil as a dietary supplement, which would remove it from FDA regulation and give our Charlotte’s Web Holdings (OTHOTC: CWBHF) a nice push. This is exactly where we were a month ago, so we’re still waiting.

Tilray and other large marijuana firms have been laying off staff and trimming budgets to wait out the glut in the industry. Our stocks, such as KushCo Holdings (OTHOTC: Kush) and Dixie Brands (OTHOTC: DXRBF), are doing the same thing. Along with Charlotte’s Web, they’ve also issued new stock and/or convertible bonds to provide them capital to survive. The one name that shines bright is Trulieve (OTHOTC: TCNNF), which keeps opening dispensaries and making money. The company’s strategy of organic growth is paying off during these tough times for competitors.

Superior Industries (NYSE: SUP) just set their earnings release date for February 28, which will give us a look at their progress on paying down debt. Recently a large shareholder, D.C. Capital, sent an open letter to other shareholders calling for changes on the board of directors. D.C. Capital wrote that it is not an activist investor, but tried to approach the current Chairman of the Board about adding new perspectives to the board and was rebuffed. D.C. Capital points out that the current board hasn’t prioritized paying down debt, which is what should be done to make earnings available for shareholders as quickly as possible. The investment firm has identified a candidate to add to the board and is asking other shareholders to support the nomination.

Finally, I also sold Ceragon Networks, Ltd. (Nasdaq: CRNT) last week. The company reported disappointing earnings based on the failure to complete a sale in India. Then it got worse. Company executives noted that 2020 will be slow, and they look forward to a robust 2021. That’s all I needed to hear. We can better deploy our capital to other names that should pay off quicker. I’ll keep Ceragon on my watch list. If it’s still hanging at or below $2 late this year, then maybe we’ll pick it back up ahead of 2021.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter


Trade Alert: Sell Ceragon Networks, Ltd. (Nasdaq: CRNT) (click to expand)

February 11, 2020

Trade Alert: Sell Ceragon Networks, Ltd. (Nasdaq: CRNT) at the market

The coronavirus has now claimed more lives than severe acute respiratory syndrome (SARS), with the death toll just over 900. The official number of infected stands at 40,000, but that seems statistically out of whack.

The fatality rate outside of China is about 1%, while in China, it’s less than 0.5%. It looks like China is under-reporting infections, which could be due to the fact that they turn away potential victims with mild cases due to full hospitals and a lack of testing kits. It’s likely the infection rate stands around 90,000.

The U.S. markets regained their lost ground last week as investors looked past the outbreak and saw something they could (financially) cheer. President Trump had a very good week, and the Democratic primaries are in disarray. That doesn’t pre-ordain the outcome of the 2020 election, but a Trump second term would at least put off the potential of higher taxes and increased regulations.

In the cannabis world, there’s just one word that matters: capitulation. Firms large and small are laying off workers and reducing operations as they conserve cash and wait for the marijuana investment landscape to rebound. Both Tilray and Aurora Cannabis cut headcount by about 10%.

Even as companies cut costs, sales continue to grow. Illinois reported $39.2 million in recreational marijuana sales in January, the first month it was legal. That included more than $8 million of sales from people out of state, which puts pressure on other states to legalize.

On the CBD front, Charlotte’s Web Holdings (OTHOTC: CWBHF) is still the undisputed leader. The cloud emanating from the FDA remains the issue. If the FDA takes a more negative stance on CBD, Charlotte’s Web will remain under pressure. But if Congress classifies CBD as a dietary supplement, then the company should be able to regain its sales footing.

The same can’t be said of Ceragon Networks. The company remains the leading backhaul specialist, and as such is a gatekeeper in the 5G space. But that hasn’t translated into current sales. The company posted earnings Monday and disappointed again, failing to book the contract with India that has left a hole in their revenue. To make matters worse, Ceragon reported a book-to-bill ratio of less than 1:1, showing that business is slowing down instead of picking up, and that’s before accounting for the coronavirus. We’re going to move on.

Action to take: Sell Ceragon Networks, Ltd. (Nasdaq: CRNT) at the market.

Sincerely,

Rodney Johnson
Editor, Fortune Hunter

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