In December 2023, I did a Hindsight Bias Buster quiz on Journalytic. The goal was to make a few predictions for 2024 and see how they turned out a year later. The results blew me away!
Thank you for sharing your thoughts, including putting your predictions out there. It requires humility and discipline. I respect that and have learned much from your approach.
In that spirit, here are my predictions for the next few months (I can't get much farther ahead than that...):
. Velan to pop today on crazy news of major divestments, a complete and stunning transformation of the balance sheet and ability to either sell the company at a major multiple (what the family controlling Velan wants) or grow the business with cash, free cash flow and no debt. Market will quickly find a new stable price but it will be lots more than the current $11.76.
. DavidsTea, beautiful turn around story only starting to be recognized. Trading at $1.20 for estimated 2025 $0.40 earnings per share that will only grow as they hit their re-expansion funded by internally generated cash flow. 56% insider held. ~$5/share by the end of May.
. Kane Biotech, innovative product company now and just starting revenue with one product commercialized and several in pipeline. Strong disciplined management, cash flow positive in 2025, no debt. 2025 multi-bagger.
. Sabio Holdings, >50% revenue growth, now cash flow positive and intends to expand using cash flow (no more dilution). After struggling, has found its stride. 2025 multi-bagger.
Thanks for sharing your picks Duane! You're off to a solid start with Velan - great call! I'm monitoring all four, and I agree they all present strong upside potential, assuming they execute their plans.
Mathieu, great stuff as usual. I have pause with Covalon because I assumed their products were manufactured in Canada and subject to tariffs. Would this be the case?
Yes, the collagen products are predominantly manufactured in Canada. However, the company has maintained some volume at their US contract manufacturer and can ramp up production there as needed. The margin impact would be small (a few % points on the gross margin). All this information was shared on the most recent earnings call, if you're curious. So overall, I'm not really worried about the tariffs.
Thank you for sharing your thoughts, including putting your predictions out there. It requires humility and discipline. I respect that and have learned much from your approach.
In that spirit, here are my predictions for the next few months (I can't get much farther ahead than that...):
. Velan to pop today on crazy news of major divestments, a complete and stunning transformation of the balance sheet and ability to either sell the company at a major multiple (what the family controlling Velan wants) or grow the business with cash, free cash flow and no debt. Market will quickly find a new stable price but it will be lots more than the current $11.76.
. DavidsTea, beautiful turn around story only starting to be recognized. Trading at $1.20 for estimated 2025 $0.40 earnings per share that will only grow as they hit their re-expansion funded by internally generated cash flow. 56% insider held. ~$5/share by the end of May.
. Kane Biotech, innovative product company now and just starting revenue with one product commercialized and several in pipeline. Strong disciplined management, cash flow positive in 2025, no debt. 2025 multi-bagger.
. Sabio Holdings, >50% revenue growth, now cash flow positive and intends to expand using cash flow (no more dilution). After struggling, has found its stride. 2025 multi-bagger.
Thanks for sharing your picks Duane! You're off to a solid start with Velan - great call! I'm monitoring all four, and I agree they all present strong upside potential, assuming they execute their plans.
love this framework of intellectual honesty!
Thanks Li!
Mathieu, great stuff as usual. I have pause with Covalon because I assumed their products were manufactured in Canada and subject to tariffs. Would this be the case?
Yes, the collagen products are predominantly manufactured in Canada. However, the company has maintained some volume at their US contract manufacturer and can ramp up production there as needed. The margin impact would be small (a few % points on the gross margin). All this information was shared on the most recent earnings call, if you're curious. So overall, I'm not really worried about the tariffs.