Wall Street legend, Peter Lynch, once
said, "During the Gold Rush, most would-be miners lost money, but people
who sold them picks, shovels, tents and blue-jeans (Levi Strauss) made a
nice profit."
Today, I want to review a microcap company that could be a modern-day
investment in this business model with a chart that presents a solid
trading opportunity.
Companies that sell consumables, products
that are completely used up and then need to be repurchased, can enjoy
steady sales and earnings, even if some of their buyers go bust. Finding
undervalued companies that supply critical inputs to an industry can be
a way to identify trading candidates.
In the drug industry, biologics are among the best-selling drugs in the
world. These drugs are made from living organisms and are more complex
than chemically synthesized drugs, the more common type of
pharmaceutical drugs. Biologics are used in the treatment of rheumatoid
arthritis and several types of cancer. Research and development is under
way to find other blockbuster biological drugs, but that process is
expensive. According to one research report, it can cost $1.2 billion
and take 10 to 15 years to get a drug through the regulatory process. (more)
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