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For the last several weeks I've been focused on Chinese stocks as a way to get the most bang for our trading buck. And, it's worked out pretty well.... NF Energy Saving Corp. (NFEC) is up about 165% from our entry, Universal Travel (UTA) more than doubled after our June entry, and our China ETF (FXI) trade - which goes all the way back to December of last year - is up about 70%.
While I love the overall results, I don't want ignore a few other opportunistic hot spots we could be (and should be) tapping into right now. To that end, a new trading idea is immediately below. I want to add one more layer of perspective before we get to it though....
How would you like to own part of a $4 million company that could be a serious contender in a $1 billion market? Moreover, how would you like to step into a position at only 7 cents per share? Oh, did I mention the market has renewed its love affair with this industry?
I can't recall the last time I saw
a penny stock with this much upside potential trading at these stunningly
low levels. I think the market's going to rediscover this one again
real soon though, pushing the valuation up in a hurry.
Let's not mince words here - many of the standard cancer detection tests are just bad. Either they're expensive, slow, or inaccurate (or some combination of all three). BioCurex Inc. (OTCBB: BOCX) has developed a technology that can potentially address all three problems with the cancer screening process.
The opportunity BOCX investors could tap through the company's diagnostic equipment isn't a small one either. The cancer detection/screening market is worth about $1 billion each year. Even a small sliver of that pie could reap relatively huge rewards for BioCurex owners; the company's market cap is only about $4 million, so a small investment gives you a large stake in the company's success.
The continued development of the screening technology is the key here though, so let's take a look...
At the heart of everything BioCurex is, you'll find RECAF (tm). All cancerous cells cause the creation of the RECAF molecule, while healthy cells don't cause the creation of this same molecule. Therefore, a positive RECAF test means cancer has been detected.
Simple so far? We'd agree, but there are three things that could make RECAF-based diagnostics more attractive and lucrative than the other current forms of testing.... accuracy, speed, and cost.
Stunningly, many other cancer tests may as well be coin tosses. Take prostate cancer for instance. Of all the 'positive' results yielded for a common PSA test, only 1/3 of them are actually accurate. The other 2/3 are false 'positives'. It gets worse though, because some of the 'negatives' for this test should actually be 'positive', meaning the patient has prostate cancer and may not even know it. All told, that PSA test is only about 40% accurate, which leads one to wonder if it's doing more harm than good.
When using the RECAF test to detect prostate cancer, the overall accuracy is cranked up to close to 90%.
And just to clarify, RECAF can screen for all cancers, since it's searching for that one certain molecule that only exists if cancer is present. Other tests in current use aim to indicate only one particular form of cancer.
As with any lab work, sending blood/serum samples from a doctor's office to a lab takes time, and manpower is needed to generate the test's results. That's just the way it is... or was, until BioCurex began to develop a rapid RECAF test - something that could be performed during an office visit with results being returned in a matter of minutes.
Since then, the device has been fully developed - and it works. The nearby image is a picture of a utilized test. Even to the amateur eye it's clear the rapid RECAF test can be highly accurate. While the lab version of the test is still utilized where a lab confirmation is preferred, the rapid test is a functional and fast screening test... something oncologists really don't have access to as of right now.
The cost to process most current cancer screening tests (materials, lab work, shipping, and the doctor's time) can vary from $75 to $800, depending on the test. If the expense isn't paid by the insurance company, it's paid out of the patient's pocket.
Having constructed a few versions of the rapid RECAF test already, BioCurex estimates their cancer diagnostic device will cost somewhere between $10 and $20.
While the price difference clearly
favors use of the rapid test, there may be an even bigger, unrealized
and unintended benefit to the RECAF test - it may actually be performed
in those cases where the more expensive tests may not be approved by insurance
companies, or declined by patients who would otherwise pay for such a test
out of pocket.
The next steps for the company are to continue making progress towards the commercialization of the RECAF screening test. Nothing's been publicly confirmed yet, but in reviewing the company's history and news, one has to believe BioCurex has been lining up some deals and licensees.
With that being said, I've got two final points to make.
First, most of you know how biotech works - a huge portion of a stock's gains come before the biotech company makes its first cent.
Take Gilead Sciences (GILD) or Vertex Pharmaceuticals (VRTX) for instance. Gilead wasn't even close to being profitable until the fourth quarter of 2001, yet shares rallied from $1.00 to $7.00 over the nine years before that swing to a profit. Vertex has only posted six profitable quarters in the last 18 years (and none since 2003), yet VRTX shares are nearly 400% higher than they were 18 years ago.
That's not to say BioCurex is the next Gilead or Vertex. It might be - I just don't know. All I'm saying is with biotech, if you're not out in front, then you're automatically behind. That leads me to my other message....
Second, I can't stress enough how well the timing of this trading idea has lined up.
Like almost all stocks, BOCX suffered the bear market by pulling back from its 2007 peak around 90 cents. The tumble didn't stop until March of this year, as was also the case with the rest of the market. Welcome to the club. Since then, BOCX has been range-bound between 4 cents and 11 cents while the rest of the biotech market has rallied.
But wait a second... how is it a good thing if BioCurex trails?
The longer a stock can move in a range, the stronger the breakout is likely to be once it materializes. And, given the market's euphoria over biotech lately, I firmly believe it's more a matter of 'when' rather than 'if' for BioCurex.
I'd never deny that it was the swine flu craze and Dendreon's (DNDN) cancer vaccine update earlier in the year that jump-started the biotech frenzy, but make no mistake - the buzz has been sustained based on these biotech companies' own merits. I think BioCurex's day is coming soon too.
One of the supporting clues to the theory is today's somewhat mundane news release (below) from BioCurex. A couple of new directors were named to the board.
I'd be the first to say it's not a barn-burner as far as news goes, but having observed the BioCurex PR machine for a few years now, I'd also say this is likely to be the beginning of a string of company news that grows in importance as each press release is posted. See, the company has historically posted news in waves, and kicks those campaigns off with a mere 'stir the pot' kind of release like this one.
I don't know for sure what's coming next in terms of announcements, but I'm certain I'd rather wade in now between the $0.04 to $0.11 range instead of trying to chase BOCX if the next news item catapults the stock. RECAF is simply a great biotechnology that has the potential to send the major diagnostic companies back-pedaling, and investors can participate in that for only 7 cents a share. BOCX is not likely to stay priced at these levels for long.
So, here's how I'd suggest playing
it - any entry under $0.11 cents is fine, though something under $0.09
cents would be ideal. I don't think a decent entry will be a problem though.
As for a SSL, let's use the bottom of the established range... $0.04 cents.
I don't want to set a target level just yet, but stay tuned for it.
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