Author: Raj Gupta

Raj Gupta is Director, Research Analyst. After joining the firm in 2002 as a research analyst, Raj was appointed senior equity analyst in 2006, and lead senior equity analyst in 2014—largely because of his ability to select outperforming stocks. He acts as an expert in the O’Neil Methodology and contributes to the direction of product and service line development. He recommends securities for addition to or removal from the U.S. Focus List, or USFL, and the associated alerts to clients. During his tenure, he was part of the leadership that developed the Global Focus List, which marked the firm’s successful expansion into international equity recommendations. He is also a lead on the IPO Rewind report and contributes to weekly summaries on the performance of the U.S. market. Much of his expertise is delivered as highly customized service to clients. RAj earned his Bachelor’s degree in Economics from the University of California, Santa Barbara. He began working at the firm directly out of college, driven by his passion for investing and stocks. An avid soccer player, he built and managed an adult league in the Los Angeles area, in which he still plays. He also enjoys international travel; he and his wife commit to at least one major adventure a year.

U.S. Elective Surgery

Posted on by Raj Gupta

Key points from this report:

 

  • Recovery expected in surgeries: Overall admissions and surgeries are running at 90% and 91% of pre-pandemic levels, respectively. Though the Delta variant did cause a sequential slowdown, surgeries are expected to recover in Q4 and into 2022.
  • New COVID-19 antiviral pills: Pfizer and Merck have presented data that can reduce the risk of hospitalization by 89% and 50%, respectively. Both studies saw all high-risk patients recover with no deaths. The U.S. FDA advisory committee will give their views on emergency use authorization of Merck’s pill by the end of November.
  • Reopening beneficiaries: Though elective surgery ideas were negatively impacted in Q3 by the Delta variant, results were better than feared. Management commentaries are positive heading into Q4 with sequential growth expected.
  • High COVID-19 exposure: The majority of leading ideas through Q3 came from Tools and Bioprocessing as they were benefiting from vaccine production. We believe Avantor (AVTR), Bio-Rad (BIO), Catalent (CTLT), Danaher (DHR), and Repligen (RGEN) need time to digest major moves higher earlier this year. Look for all to remain above their rising 200-DMA to remain constructive long term.
  • Elective surgery/reopening ideas: We believe the following ideas can beat Q4 consensus: ABMD, ALGN, CNMD, DXCM, EW, GMED, INMD, INSP, ISRG, NVST, PCRX, PEN, PGNY, PODD, SYK, TNDM.

Market View

Posted on by Raj Gupta

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq found support near their respective
10-DMA, eventually closing ~1% off all-time highs for the week. Support below this level remains the rising 21-
DMA (S&P 500: 4,603; Nasdaq: 15,515). The distribution day count remains low at three and one, respectively.

Market View

Posted on by Raj Gupta

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq continue to set new all-time highs

after a week of broad-based accumulation. Indices are 1-2% above the first level of support at their rapidly ris-
ing 10-DMA (S&P 500: 4,620, Nasdaq: 15,602). The distribution day count remains low, at two and one, re-
spectively.

Market View

Posted on by Raj Gupta

The U.S. market remains in a Confirmed Uptrend. The S&P 500 and Nasdaq have now both broken out to new
all-time highs. There are multiple levels of support below current prices, including the prior highs (S&P 500:
4,545; Nasdaq: 15,403) before the sharply rising 10- and 21-DMA. Distribution has mostly been avoided for
two weeks with the count at five and four, respectively, with three expiring on each next week.

O’Neil Health Care Weekly

Posted on by Raj Gupta

XLV jumped nearly 3% off support last week and is now sitting directly under 50-DMA resistance. All other sectors as well
as the major averages have been able to regain this level over the last two weeks. The RS line has turned back up on this
bounce, but still remains in a longer-term downtrend.

Market View

Posted on by Raj Gupta

The U.S. market is in a Confirmed Uptrend. The S&P 500 made a new all-time high Thursday showing instant
progress after regaining its 50-DMA last week. The Nasdaq also continued its push higher earlier in the week
before pulling back Friday to close ~2% off all-time high resistance of 15,403. We continue to view the 50-DMA
as a key level of short-term support, though both the 10- and 21-DMA are now crossing above that level. The
distribution day count stands at five each, with one day expiring on both at the end of next week.

O’Neil Health Care Weekly

Posted on by Raj Gupta

XLV was able to rally off logical support near the top of its prior base and rising 200-DMA. It now faces resistance at the
rolling 50-DMA. Despite the move higher, the ETF is still significantly lagging the S&P 500 and all other sectors over the
last two months. Therefore, we recommend a more selective approach within the sector.

IPO Rewind

Posted on by Raj Gupta

Winners (annualized gain of 30% or greater)
• Median market cap at IPO was 65% higher than the median market cap of losers.
• Median revenue growth was 39% the year before IPO. However, it has declined to 31% and 22% in the year of IPO and year after IPO, respectively.
• A significant number are still losing money, but nearly half of them are improving toward profitability after the IPO.