End Game

Another wild week in the markets, which is simply par for the course. At this time investors are speculating over the number and timing of interest rate increases? Is inflation here to stay? Is the consumer about to freak out, bringing the economy down? The wall of worry is steep and it seems like the market’s ability to climb it is severely impaired if not gone altogether.

When the best case scenario is a soft landing, it means we’re going down one way or the other, right? 

I have been preaching caution for ages and that refrain is being repeated this week. However, as mentioned last week, our stocks appear to be better positioned (having suffered first) than many other parts of the market. This was reflected in what was a great week…until a little smackdown on Friday took a lot of the wind out of the sails.

Still, overall it was a good week for TW’s universe as several stocks were up on nicely on news. This is a positive sign as, over the past few months, good news hasn’t always benefitted the issuer. So, when ATOM pops 25% on the announcement of a licensee, it goes to show that the massive selling pressure of the past year has dissipated.

The FED is really in a pickle here at this time and everyone is trying to guess the end game. I’m in the middle of reading Ray Dalio’s latest book, The Changing World Order. It’s a great read, albeit a very thick book, as he certainly spends a lot of time and energy providing historical references for his analysis.

While I’m not at the end of the book yet, I believe he is going to predict that the FED ends up inflating the U.S. out of its predicament. That is what has happened every single time throughout history so thinking that we’re going to be different is a dream.

Meanwhile, Putin is massing troops on the Ukraine border and the world is in a very tenuous situation geo-politically. I’m a believer that after the Olympics, the s*** hits the fan.

So, what to do? This past week saw a classic bear market rally. It was fun but that’s over and I expect stocks to be weak again going forward. But, I do see lots of value in beaten up sectors and small caps in particular are at a compelling valuation versus their larger brethren.

Stay the course, owning companies with strong balance sheets that are executing to plans. Catalysts are coming for much of the TW universe and none of our companies are facing imminent financings. It’s a time for caution but also a time for being long exciting stocks that have had the stuffing beaten out of them…just take a long-term perspective as volatility will continue to rule the day.

This coming Tuesday, INmune Bio (INMB) will be presenting at BIO at 9:15am in NYC. We have been awaiting data from their INKmune program. Perhaps that’s when we will see it?

The data we are expecting is blood work from the two compassionate use patients and, possibly, bone marrow data from one of them. If we are seeing active NK cells in peripheral blood, that would be a very positive sign. If blast counts actually come down in the bone marrow data, it would be very, very big indeed.

While I have no idea what the data will look like, I’m certainly inclined to think it’s going to be positive. Why? The first patient has had nothing but good data and, importantly, the human data has followed exactly what pre-clinical predicted which means they know this drug and how it works.

Equally important, and the best sign for cancer patients, is that all three patients are alive and doing better than they were prior to dosing. Extending life is the goal of all cancer drugs thus, when your patients are all living beyond predictions, it’s a pretty good indication of being efficacious.

Over the past year, INmune has had the best Alzheimer’s data from any company in that field. They have also had the best NK cancer data from anyone in that field. Both programs are early stage but don’t let that fool you. The drugs are behaving exactly as predicted and that’s excellent news for the future results.

Meanwhile, INMB stock is well off its highs as is the XBI. This confluence of huge potential, excellent results and an obliterated share price has created a once-in-a-lifetime opportunity…in my opinion.

Atomera (ATOM) announced another licensee this past week, bringing their total to 5. That sent the stock up 25% but, in a sign of the difficult times for micro-cap companies, it’s still down on the year.

In what can only be viewed as excellent news for Quest Resource Holding (QRHC), one of their larger competitors got snapped up by Republic Services (RSG). Their $2.2 billion acquisition of US Ecology (ECOL) allows Republic to expanded their vertical integration capabilities for our environmental solutions business.

ESG continues to be a very hot investment buzzword. It’s also very difficult to see just who is accomplishing anything in this regard, which puts Quest in a great position. Their products allow customers to demonstrate exactly how they are handling difficult to process waste streams, providing data on ESG compliance in real-time.

Just as importantly in today’s inflationary environment, Quest has kickers in all their contracts that enable them to raise prices as costs go up. Inflation is a good thing for Quest.

Shares of QRHC hit new 52-week highs this past week and look poised to continue their strength going forward.

Old friend LexaGene (LXXGF) announced a strategic investment of roughly $4.5 million USD. We had been expecting this to occur for some time and it’s nice to see that in the rear view mirror.

LexaGene has been making good inroads into the veterinary market and the investor in this latest round of financing is a quality group that has made several investments focused on that industry. Meridian LGH Holdings LLC, among other things, owns signficant properties that are rented specifically to veterinary operations. They have the ability to help drive penetration into this industry and are a great endorsement for LexaGene.

How many layers does an onion have? Cassava (SAVA) got some good news this week in that the FDA denied the Citizen’s Petition. However, the story doesn’t end there as the denial was more on procedural grounds and they left the window open for doing their own work and possibly stopping the trial based on what they discover.

The FDA is always a black box. One never knows exactly what is happening before final decisions are rendered and their communication is always intentionally vague. The SAVA drama continues and the battle between shorts and longs isn’t going away anytime soon. I’m on the short side.

TW Research's Disclaimers & Disclosures: TW Research may have been compensated for writing this article. For a full list of disclaimers and disclosures, please visit http://tailwindsresearch.com/disclaimer/.


  1. Looking forward to the INMB data. Thanks for not talking TFF today, I can’t handle the cognitive dissonance;). High hopes and no real results (yet). Honestly I always do look forward to your thoughts of TFF when you have them. Thanks again for your writings.

  2. I agree about Cassave (SAVA), although I never shorted any stock and will not in the future, because I consider stock ownership as entrepreneurship and not as participating in a casino. Did you see the recent Cassava piece in the New Yorker? Its no good having Nobel prize winners against you, they are usually rather clever.


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