While markets are hot, today we are into deep winter, with temperatures in the teens in Manhattan, plus icy sidewalks and roads. There was at least one nasty accident on first avenue during my morning shopping trip. But at least it is Friday, and next week will see a new month. I am happy for small wins these days. Happily, TD Ameritrade, while still barely accessible, is providing guidance to new investors in special columns today, helping mitigate the ban on gangbuster buys of GameStop. It doubled by mid-day. ValueLine also published guidance for retail investors today and estimated that as many as 3 million newbies were buying the shares tipped on Reddit.

image source

Today is a good day for being into non-US shares as well as homeland ones. This despite our having one reporting company with less than fab results, and lots of backup movement from the battles during the week between retail investors joining up on websites to boost shares, while professional investors and brokerages went short. This has now become a matter of politics and survival, with congressional support for the retail buyers against the pros from both the hard left and the right.

Volatility is not good for markets and the DJIA is back in the red by ~700 points today on fear of trading excess and new worries about inoculation beating the coronavirus. GameStop doubled today at the opening, after Robinhood brokerage, following a $1 bn funding bailout, resumed allowing its retail customers to trade the video machine store company's shares. But at the opening, GameStop was only up 75% as some smart money took profits at $341, below the Thursday close, but above the trend in the aftermarket yesterday when it hit $311.99. The bulls vs bears movements continue.

Citron Research, exposer of naked stock darlings run by Andrew Left, is now only going to do bull calls and no more short skeptical articles. I'll miss it.

Drugs

*Indian drug company Dr. Reddy's reported cruddy results and RDY duly retreated 6.81% to $61.7 before recuperating a bit. RDY was recommended by Abhimanyu Sisodia when it fell below all reason and we are ahead by 52.2% even with the drop today. In Q3 its sales rose 12% from Q3 2019, but only 1% sequentially to 4.93 crores of rupees (about $675 mn). It gross margin fell to 53.8% from higher levels last year and in the first 2 quarters, which expenses rose 14% from prior year and 10% from H1. Pretax profits came in at 284 crores ($7 mn), a mere 5.8% of sales, vs prior-year level of 14.21%, a huge drop. Aftertax profits were derisory, a mere 0.4% of revenues, down from 9.6% the year before, at crore 198 (or $3 mn). The drop in profits was from a Q3 impairment charge over Nuvaring, according to co-chair G.V. Prasad, so it is not recurrent. It was the result of a rival generic hitting the market.

Eps was 0.2 cents or crore 1.19, really bad. Another red flag was cash on hand which dropped to crore 2.28—about $291 mn, from Sept. level of $357 mn and that for the prior Q3 of $280 mn. Its inventories of unsold medicine rose $44.3 mn from $562 mn for the Sept. quarter, and its goodwill and intangible assets fell to $562 mn from $624 mn.

By product, generics kept revenues up, but there wasn't enough room to let prices steady particularly in emerging markets outside Mother India. Its active ingredients and services markets also steadied (bought by drug makers) but again the growth came at the expense of profits which “eroded”.

However, its borrowings fell to $280 mn in the quarter from $376 during the quarter and it kept its payables pretty much flat at $316 mn from $313 mn. That's the good news. The rest of the good news is in the geography. North American sales rose 9% from prior Q3, but they were less profitable because of launches for Cinacalcet tablets, Sapropterin dihydrochloride tablets, and Sycinycholine chloride jabs.

It is likely that prices can rise if the healthcare situation in the US is improved by Pres. Biden's Omabacare inputs now signed into law and likely increased govt healthcare spending.

In Europe, where healthcare is paid for by govts already, RDY, sales were up 34% y/y, with much lower price cuts. In Mother India, revenues gained 26% but there was no boost from forex there.

This is not an exceptional result as drug companies do their math for 2020, the difference being that RDY has a March 31 year-end. The early bird got the worm as RDY lost the attention of Indian analysts because today was budget day.

*It was unusual that two new jabs from Johnson & Johnson and Novavax were announced. The JnJ jab effectiveness varies by region and that of NVAX works against new British mutations but not as well against the South African one. Despite this, NVAX shares gained 65% in the premarket. JnJ fell 4%.

*Note that NVAX is not our share, Novacure, which fell 1% because it is doing a secondary US offering following the one in Israel for its local corporation.

*Some good news. Oral cancer drug AUR102 milestones boosted Exelixus, a bonus (US) share. It has been renamed XL102 and EXEL is up nicely.

*Enlivex is up another 1.9% to $12.07. ENLV is a different company but confusion reigns.

*Israel ex-high flyer Compugen, which uses a database to figure out where to look for cures, is up 1.91% today to $12.25. CGEN moves a lot on Fridays when Tel Aviv is closed.

*TEVA however is down today by 1.55%, a more typical Friday loser when its US traders cannot do a reverse in Israel.

*Abcellera Biologics, of Canada, ABCL, is nearly back in the black (up over 6%) today after its bamlanivimab covid antibody developed with Lilly will do a face-off with Vir and Glaxo's drugVir-7831 (etesevimab) to treat low-risk Covid-19 patients alone and together. GSK stock fell 2.51% in London.

*Its neighbor Zymeworks ZYME fell 1.7%. You are only allowed one British Columbian drugmaker stock.

*Thermo Fisher Scientific (TMO) is up 3.2% today because testing for Covid-19 is going to be around for a while. Scientists now expect people will need to get a cv shot annually just as they do for classic flu according to Israeli President Benjamin Netanyahu. Before they get it they will have a test.

*Thanks to better data for the Alzheimer's disease drug from Biogen Idec, our Eisai share in Japan which handled part of the trials is up in tandem. The FDA advisory just authorized another 3 months of testing for Aducanumab until mid-summer (which still has to be ok'd by the full FDA). It is a monoclonal antibody against beta-amyloid derived from the immune cells of oldsters who don't exhibit cognitive decline or only get senile slowly. BGEN is up 12% but remember that ESALY has lots of other irons in the fire. ESALY gained 4.75%. Fellow Japanese Takeda TAK lost 1%. You only get to pick one.

*Astra Zeneca AZN got a green light from the EU today for its Covid-19 jab, developed with Oxford University. Delayed OK was one reason that deliveries stalled. Fierce price-cutting on what the Anglo-Swedish firm could charge was the other reason.

*Beigene BGNE won the bi-polar prize, up 4.07% in Asia and down in US trading, but now only by 0.082%. It tislelizumab is the cause, with analysts split on the outlook. This is not a short squeeze.

Tech is Dreck

*Mercado Libre (MELI) is down 3.35% today to $1783. Cheer up. It is too expensive a share for the websites and zero commission brokers.

*Naspers is down 0.6% on no news except that Africa has a virus mutation. NSPNY's sub Prosus (PROSY) does repurchases for people aiming to get out of Tencent, which it owns a chunk of.

*Ericsson ERIC is up nearly 8% in the wake of the revival of Nokia, up 4.9% today after the short sellers in the US met loyalist Finnish followers of NOK (who did not have to use brokerages which barred them because they are in Europe.)

*Vodafone is down however either because the European countries are doing less well in inoculating their people against the virus, or because of exchange factors, or because some US short sellers need a new idea. VOD is of 1.71%.

*If you absolutely just own a foreign telco, consider BCE from our neighbor in the even colder North. Canada's largest communications company, selling wireless, TV, Media, and Internet did better in Q3 than earlier in the year but is still suffering from the pandemic which chopped revenues by about 4%. This relates to specifically Canadian rate rise halts imposed by provincial governments there to protect businesses and jobless. This stuff will go on until Covid-19 ends, but BCE has a wide moat and can use capital at hand for growth and divies despite the regulators. It trades at under 17x eps and yields 6.04% as of today. (It also raises its divie regularly. It is very safe like phone companies used to be. BCE fell because yesterday Zacks downrated its estimates for sales and earnings for Q4, but may have overstated the risk, particularly for eps. Unlike the Chicago US forecasters, most analysts up north expect eps to be down 0.8%, not exactly the end of the world. In the last quarter, BCE beat by 1 cent, earning 59 cents.Like Zacks, I think revenues will fall fractionally because of the provincial regs. BCE will report next Thursday, Feb. 4, aftermarket. I paid $4.67 (US) because others were also sharpening their pencils after the Zacks downgrade. Note that TD Ameritrade has no restrictions on going long Canadians, if they trade on the NYSE. My trade went through but was not filled completely.

Latinas

*My stock for the year, Cosan, doing a restructuring of its offshore assets back to Brazil, today fell 2.62% to $17.39 in premarket trading. It is still nearer its high of $23.01 than its low of $8.58 from the last 12 months but it is not likely to produce the banner gains I expected. Desculpe. CZZ will relist as CSAN and is buying out investors who want to get out.

*Mexican REIT Fibra Uno which trades by appointment, today fell 2.7% to 22.19 Mexican pesos in its homeland. FBASF gets rentals in US bucks, the currency of much of its debt, and is a play on the battered buck. Right now with the president and the top financial CEO both down with Covid-19, the peso is the loser and the greenback is back.

*VALE lost 2.5% today in the pre-market in Britain. It faces fines for the collapse of its tailings dams in Minas Gerais which will zap profits for years.

Industrials

*NIO, our hottest hottie, is up another 2.6% today to $8.681, bringing our gains despite the sale of 2/3 of our stake to.... 362% according to my brokerage account.

*Hollysys delivered to the SEC today information on its key shareholder of the Chinese robot firm who are not all Chinese. There is a similar note about another company which we used to won below. HOLI.

*Schlumberger Ltd fell 2.52% as the weekend loomed. It backers in France have to wait until Monday to boost the stock. SLB is incorporated in the Dutch Antilles but is mainly owned by French people.

*Royal Dutch Shell fell because it lost a case against its Nigerian sub for oil spills which a Dutch court ruled were the fault of the parent, RDS-B lost 3.36% on this homeland neutrality which will also hurt other oil majors like Exxon XOM. Chevron CVX missed and was sent into the corner.

*Colombian Ecopetrol which decided to buy out the Bogota govt's majority stake in the national oil pipeline dropped 2.6% today to $11.81. We sold a year ago, worried about oil price falls. EC is suffering because even GM is now going to stop making gas-guzzler cards by 2035.

*Energy Fuels, UUUU, is back on the plus side today, up 4.1%. One of the features of the short-thwarting US retail investor challenge is that Canada was not included in the game while Finland was.

*Energy saving is baaack. Tomra Systems TMRAY of Norway is back up by 0.6% at $46.49. It makes reverse vending machines and sorting systems for potatoes, plastics, and (key today) drugs.

*Ormat is up another 3.66% to $166 today while Israel is closed. Selling ORA to lower my risk with a maker and storer of geothermal energy in the US was a mistake. Funds and investors want to tick all the boxes and Ormat has one.

*Nutrien is down 4.6% today but as I don't know why this is, I am holding back buying. NTR makes fertilizer and runs farm shops in Canada and elsewhere. My reason includes the results of Bank of Nova Scotia which missed according to a filing with the SEC today, well under the radar. BNS was reporting on bonds issued in the US and smart money sold down the bank's shares by 0.7% on this move.

Triggers

*While there is some fragile sense in buying GameStop GME I am certain from shopping their closing sale in my own neighborhood that there is no traction for buying Bed, Bath & Beyond BBBY.