2018 Investment Series Post 10

Everyone loves payday. Just like everyone else, once I get that sweet deposit in the bank it starts burning a hole in my pocket. Before much time I am ready to blow it all on a shopping spree. My store of choice is the stock market, and I’m shopping for the best deals on companies. Here is what I dropped my $1,000 on this Friday, May 11th.

Achaogen Inc.

The tenth pick of the Let’s Be Millionaires investment series goes to Achaogen Inc. (AKAO).

Achaogen Inc. is a small, late stage bio-pharmaceutical company . The company has been developing drugs to treat multi-drug resistant infections. In other words, Achaogen Inc. is trying to create next-gen medicines for “super bugs” or infections that have grown resistant to traditional treatments.

I can’t believe it has taken me this long to throw a pick at a bio-tech company. Companies with stock prices that are almost completely dependent on drug research and successful FDA approval are about as “hail Mary” as it gets.

Check out Achaogen Inc.

About The Stock

Achaogen Inc. (AKAO) went public back in 2014 and debuted at around $16. The stock then entered a multi-year down trend leading to a low of below $3 a share in the first half of 2016. In December of 2016 the stock took off, climbing from around $5 to over $27 in just 3 months. Since then the stock has been in another downtrend that looks to have potentially made a low around $10 a share.

The stock has rallied nicely off of that low up to around $12.50. This has the look of potentially being the beginning of a new uptrend.

Since the company is in the research and development phase of their product and is not selling anything there are no earnings to report. The market cap of the company is around $550 million. This stock would be considered small-cap, growth, bio-tech stock.

The Speculation

The speculation here comes from a few angles. Obviously I am speculating that this company will gain approval for the drugs in its pipeline, causing the share price to appreciate.

The really interesting angle for me in this case is the insider investments. Particularly the investments made in Achaogen by a billionaire named Robert Duggan.¬†Check out this full article¬†for the full details but this guy is betting big on AKAO stock and it isn’t the first time he has made a ton of money on a biotech company. Call it a speculative piggy-back, but that’s enough for me to go for it.

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