A look at some combined disruptions for the 2020s – Searching for the next Amazon or Tesla.

Investors who invested early into disruptive companies made a fortune. Amazon (NASDAQ: AMZN) listed in 1997 at US$18, and today is at US$2,653, for a 147x gain in 23 years. Tesla (NASDAQ: TSLA) listed at US$17 in 2010, and now trades at US$1,003, handing investors a 59x gain in 10 years. Netflix (NASDAQ: NFLX) listed in 2002 at US$15, and today is at US$449, for a 30x gain in 18 years.

Returns like these are life changing events for many shareholders who saw the disruption early. Just $10,000 invested into Amazon would now be worth a staggering US$1.47 million, into Tesla it would be worth US$590,000, and into Netflix it would be worth US$300,000.

Tesla has risen over 5,000% the past 10 years, recently outperforming Netflix & Amazon

Source

In each case there was a major disruption – Online shopping for Amazon, electric cars for Tesla, and online video on demand for Netflix. Once you determine a disruption is coming then you need to determine the potential winning stock.

Looking ahead to the 2020s I think we are likely to see several combined disruptions. This means the potential is there for the winners to make exceptional returns. Below I look at five combined disruptions and who may be a potential multi-bagger winner for each one.

Electric Vehicles/ride sharing/Autonomous Vehicles/TaaS/delivery

There is now very little doubt that the 2020s will see electric vehicles (EVs) disrupting conventional vehicles. EV market share of new car sales in 2019 was 2.5%. Bloomberg forecast this to be 28% share by 2030 (~24 million new EVs pa), and 58% share by 2040 (~54 million pa). I think from 2023 onward, when an EV costs the same as a conventional car to buy; it will make no sense to buy a conventional car when an EV has 5-10 times cheaper running and maintenance costs. My model suggests that by 2030 EV market share should be 36% or higher, with raw materials and production bottle necks being the limiting factors. That would mean a 14x increase in EVs by 2030. That’s a disruption.

Combined with the above we will see ride sharing EVs, autonomous EVs, transport as a service (TaaS) EVs, and delivery (including drones) EVs.

My potential winner is summarized by the phrase ‘Tesla will be the new Tesla’. Tesla will grow by many multiples from today, and will continue to disrupt and dominate the transport sector. Yes the stock is up 59x since IPO, but it has potential to still increase many fold from here. This is because the EV disruption has only just begun and can be across ALL forms of transportation. Also because Tesla is also disrupting other sectors such as energy storage, solar, and perhaps one day TaaS (‘robotaxis’) and energy production.

For a smaller stock with potential in this area I like Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF).

‘Tesla will be the new Tesla’ – The EV disruption has only just begun led by visionary Elon Musk

Solar & wind/energy storage

Apart from hydro, solar is now the cheapest form of energy production in most places around the world. Wind is not so far behind. This will mean the 2020s will see a massive disruption by solar and wind power generation, replacing conventional fossil fuel electricity generation such as coal and gas power stations. Lithium ion battery and other forms of energy storage will enhance the solar & wind energy disruption.

My potential winners from the 2020s solar disruption are:

  • Solar generator (solar parks) – Sky Solar Holdings Ltd. (NASDAQ: SKYS)
  • Solar roof/panels & Li-ion battery energy storage – Tesla (NASDAQ: TSLA)
  • Solar inverters – SolarEdge Technologies Inc. (NASDAQ: SEDG), Enphase Energy Inc. (NASDAQ: ENPH)

Solar (PV) and wind are the cheapest sources of electricity in most locations globally (excluding hydro)

Source

Artificial Intelligence/cloud/5G/IoTs/robots & subscription revenue models

The Artificial Intelligence (AI) disruption is still in the early stages. AI will enable or combine with the cloud, 5G, the Internet of Things (IoTs), and robots to disrupt many industries. Some examples already are online bots replacing humans and voice and facial recognition for call centers and surveillance.

My potential winners from the 2020s AI disruption are: Nvidia (NASDAQ: NVDA), Skyworks Solutions (NASDAQ: SWKS). We could also add in existing winners that use AI extensively such as Facebook, Alphabet Google, and Apple. The later is already strong in subscription services. For a smaller stock with potential in this area I like Predictmedix Inc. (CSE: PMED | OTCQB: PMEDF).

Internet – Streaming/social media/shopping/e-commerce/online education/work from home platforms

Streaming on demand using the internet is rapidly replacing conventional TV and cable TV. Social media continues to grow users and online shopping and e-commerce continue to gain market share. Within the e-commerce sector payments and other banking services (lending, investments) should be a major disruptive theme in the 2020s. We will see online neobanks with no branches offering discounted mortgage lending rates. Another big advance will be in online education and working from home.

My potential winners from the 2020s payments disruption are: Mastercard, Visa, Paypal, Tencent, Alibaba, Apple, and Samsung Electronics.

For the neobanks disruption: GoBank (owned by Green Dot Corp. (NYSE: GDOT)).

My potential winner from the 2020s work from home disruption is: Slack Technologies (NYSE: WORK).

Reusable rockets enabling global satellite internet/space travel/rapid long haul earth travel

Reusable rockets have resulted in cheaper space travel essentially disrupting NASA and others. In the 2020s this will lead to a low earth global satellite network to serve rural and remote areas led for now by Starlink, owned by SpaceX (private). It will also lead to space tourism (Virgin Galactic already charges US$250,000 for a 90 minute flight), and possibly 1 hour flights across the earth that may disrupt the long-haul airline industry. The SpaceX Starship could fly from New York to Shanghai in 39 minutes, rather than the 15 hours it takes currently by conventional plane.

My potential winner from the 2020’s space disruptions are: Virgin Galactic (NYSE: SPCE), SpaceX (private, 54% owned by Elon Musk, ~7.5% owned by Alphabet in 2015), and Blue Origin (private, owned by Jeff Bezos).

Virgin Galactic offers a 90 minute space flight for US$250,000 per passenger

Source: Virgin Galactic

Closing remarks

Combined disruptions will likely have the biggest impact on shareholder returns. Some of the winners are already leading the early stage of disruption but still can offer investors massive returns as the disruptions gain traction (such as EVs). Others may not yet be well known or may be private stocks not accessible yet to investors, such as SpaceX.

Investors should look for companies that are leading the disruption and who have visionary owners. Many of the names in this article offer just that. Investors that can successfully pick the right disruption and the winning stocks stand to make enormous gains between now and 2030.

Which one is your disruptive 2020s stock and why?




How Lucky prepared us for COVID-19, and introducing the Investor Talks Series

A good friend of mine always reminds me that the real secret to business success is to always start by identifying the pain points and then, offer a solution. COVID-19 offered multiplicitous challenges for our clients this year from unprecedented social media harassment to standstill sales. We, like many others have been quietly watching and assessing patterns brought forth from the pandemic with the clear understanding that this is not over.

Surprised by some of the surging stock prices of some of our star performers (charts below), from Exro Technologies Inc. (CSE: XRO | OTCQB: EXROF) to Predictmedix Inc. (CSE: PMED | OTCQB: PMEDF), I guess we thought our market would be as compromised as our social schedule?

None of us could predict anything.

The illustrious COVID-19 Pandora’s Box that braised us all has been kinder on us than most because of our interest in the critical materials sector. Rolling out the Technology Metals Show with Jack Lifton a month ago and having interviewed everyone from Constantine Karayannopoulos to Randy Scott, Jack’s commentary resonated with audiences with a formula that anyone could have predicted — dependency that is off-balance with others makes one weak.

Then…

Investing in technology and inspired by who would win the COVID-19 race in the marketplace, we started InvestorChannel.com and rolled out a COVID-19 Stock Watchlist. Another predictable formula was that whomever came across the finish line with a vaccination was going to clearly be the stock to have invested in. Following the Top 20 capital markets companies as identified by the Milken Institute, we thought — wow, this watchlist is really cool, what else can we do…

So, we did.

We started with an InvestorChannel Gold Watchlist, sponsored by our friends at Quebec Precious Metals Corp. (TSXV: CJC | OTCBB: CJCGG), we identified 20 gold companies we were interested in and created a Top 5 Performer list. Daily updates rolled out at market close, published on InvestorChannel.com, we then programmed these 2 Watchlists to go live on InvestorIntel.com at market close daily.

Then, we built the daily Canadian Market Watchlist, the US Market Watchlist and then started with sectors we loved next…

We rolled out a Uranium Market Watchlist, which Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF) graciously sponsored. Again, live on the InvestorChannel.com, then published and distributed on InvestorIntel.com and then tweeted out through @InvestorChanel, @Investor_Intel and as often as I could personally via @TracyWeslosky. Allow us to thank everyone who follows us, we follow you back!

And of course, we could not do this without a Rare Earths Watchlist, rising leader in the critical materials sector Energy Fuels Inc. (NYSE American: UUUU | TSX: EFR) stepped in. We have enjoyed their webcasts during this crisis.

So, what now?

Flashback: In 2001 we were on Bay Street before we moved to Richmond Street West where we would be headquartered for more than a decade. We moved out of the King Edward office 2 years ago, then tried a loft on Sumach – the idea was simple. A cool trendy 2600+ square feet in the ole CBC Production studios to bring in clients, hang out and drink coffee. The idea was an esports center where we could film interviews, no one was prepared for the critical downfall of this plan…no one liked my cat.

Apparently quite a few people are allergic to cats. Watching several people dance around hopping from foot to foot and declaring that they would be covered in hives if the cat was not removed instantly! With this, my grey fuzzy cat named Lucky with the big green eyes had created a do or die situation for me… it was either move him countryside and only seem him on weekends or move my office.

We moved the studio and by mid-February, we were fully functional in our homes. Looking back – I guess we have Lucky the Cat to credit for preparing us for this pandemic.

Now withstanding the many real issues, we are contending with like everyone over COVID-19’s challenges to our business, the coronavirus has not been without many positives for our team. Inspiring creativity– expect numerous news releases in the next quarter, this has been the catalyst for collaborations.

And this was not without input from our amazing audience —  with texts, tweets and emails that included: “can you coordinate presentations online?”, “have you cancelled your 8th Annual Technology Metals Summit, are you doing it online?” or “when is your next ii6 and are you doing this online?”

And here was our thought…we did not know what to do, so we waited.

We watched others do online virtual conferences and we asked for feedback from both audience and presenters. Online events are boring said some. I mean without the interactive component, the occasional heckling, the debate – interest we can see is already subsiding. After all, it’s just a talking head without the fun of people coming together.

So, we decided to try something different. While online presentations are indeed a necessary evil, we asked ourselves how we could do make this interactive and as close to as a social experience while allowing us to drink coffee and take notes…

Drum roll…

Would you like to engage with 4-5 relatively interesting peers in a 25-30 minute webcast where instead of you hitting mute while you continue your binge watching of Netflix in the background while they flip through 40+ pages of slides (we ask companies to limit slide decks to 15-18) and have a real discussion with the CEO of one of a potentially rising market stars? Discuss with your peers what is really happening in their sector and have a real heart to heart on the merits of their business model?

It gets better…

While I love Zoom and Skype for different reasons, we have opted to utilize Moovly Media Inc.’s (TSXV: MVY) MVC system. No downloading of anything, you just hit our confidential link and ‘bam’ your live and at the event – in a matter of seconds.

Sending out the 1st invitations to our private list later today for one on Wednesday for a stock that has doubled since March 24th and one of the most talked about psychedelics companies that just recently listed on Thursday. If you would like to join the InvestorIntel Special Report Alert, click here and will ensure that you are invited!

Simple, inspiring and even fun, join 4-5 fellow investors or industry leaders in an interactive presentation experience, we now affectionately refer to as Investor Talks.




Jack Lifton on Defense Department’s $2 billion spending budget for rare earths

“The US Defense Department has announced last week that it will seek $1.7 billion for rare earths purchases in the 2021 National Defense Authorization Act that means the budget for fiscal 2021. In addition they will ask for another $300 million, a total of $2 billion, for rare earths for specialized weapons which they name as hypersonic missiles…This I believe explains some of the mystery of the last month where everybody had been speculating on why the Defense Department made a couple of awards to study the building of rare earths separation plants and then put those awards on hold.” States critical materials expert Jack Lifton, in an interview with the Technology Metals Show hostess Tracy Weslosky.

Jack continued, “Based on my experience on Washington DC I think that announcements such as we are going to use $2 billion to purchase rare earths related materials are not necessarily discussed with the same people who issue small awards… Such decisions for billion of dollars are made in the White House, they are not made at the local level.”

To access the complete interview subscribe to the Technology Metals Show and get exclusive access to member only content through this exclusive site! Or Log-In Here for the latest conversations, debates, updates and interviews with the leaders, thought leaders and investors focused on issues relating to sustainability in the critical materials sector.

For more information on the Technology Metals Show email us at [email protected] or reach us direct at +1 (416) 546-9233




COVID-19: Where are we now?

Five months into 2020 and the COVID-19 numbers keep growing. The world has recorded over 6.2 million cases and this number is likely low as some countries, like Brazil and India, have done limited testing. 4,378/Million in Brazil and 2,710/Million in India. By comparison USA is over 52,000/M, UK – >61,000, Italy – >64,000, Russia – 73,000 and Spain – 76,000.  This is further amplified by Brazil having 50% of its tests resulting in cases.  The closest major country that I follow is Sweden at 15%. As has been touted by many medical personnel, testing is the key to track and trace infected people for a safer return to the new normal.

A review of cases by million is the only way to compare countries of varying sizes. As shown in the slide below Spain is the highest at just over 6,000 cases per million with the USA is closing the gap at almost 5,500 and its curve is trending up while Spain is flattening the curve. Overall in Europe the curves are flattening with the exceptions being the UK and Sweden both which should exceed 4,000/M this week. Two recent exponential growths in cases are Russia and Brazil. Brazil is likely much higher given its limited testing. Both Brazil and Russia are a month behind the other major countries and soon should be catching up to Sweden and the UK this month. Surprisingly Japan cases are low which may be in part be due to its limited testing at just under 2,300 per million. It may also be due to the cultural norm being the wearing of masks when someone is not well or do it as a normal practice.

When it comes to fatalities per million the countries that I am following fall into two groups, as shown on the chart below. Group one has 7 countries with fatalities over 300 per million. This goes from Spain at 580, the UK at over 560 and Italy at 550. This followed by France at 440, Sweden at 430. The Netherlands is just under 350 and the USA at just under 320. Canada is the highest in the balance at almost 190 but Brazil is on a steeper curve at 132. All others are under 100 but Russia is beginning to climb. Surprisingly Russia has more cases per capita than Brazil but only one quarter of the reported deaths. Is this due to under reporting by Russia or the Brazilian medical system being overwhelmed? Likely a bit of both.

One country that has climbed the ranks in cases is India and is now seventh overall with almost 190,000 cases but only 5,390 deaths or 4 fatalities per million. Again, this number is likely higher given the density of population in certain areas and cause of death is not identified. As we are finding out this virus attacks people in different ways and blood clotting and symptoms in children similar to Kawasaki disease. Also, China numbers are suspect as their total reported cases are less than Canada and fatalities at 60% of Canada even though Canada’s population is 2.5% that of China. That is why I do not include them in my report.

Overall, various responses by governments have shown different results. Europe was hit hard early on and Spain and Italy’s medical resources were stretched but are now seeing a reduction in cases and deaths. The UK and Sweden continue to climb, and cases reported will soon be only behind the USA and Spain on a per capita basis. Soon the UK will lead all major countries on fatalities per capita and Sweden will soon be only behind Spain, UK and Italy.

With countries beginning to reopen in various ways it will be interesting to see the impact of COVID-19 in one month’s time.

Overall, stay safe and remember wearing a mask is showing respect and care to others while protecting yourself.




Miss the Cannabis Boom? All Aboard Red Light Holland Corp. as the CSE officially offers TRIP for trading…

Investors made a lot of money by being in on the cannabis boom in the early stages. This time there may be a similar opportunity to get in early on the ‘magic truffles’ boom. Magic truffles are a type of mushroom or fungi, and hence are very similar to ‘magic mushrooms’. They are legal in the Netherlands and they are well known for their hallucinegic properties that result in psychedelic effects on people. Studies have found them effective for reducing depression and anxiety, and creating a state of wellbeing.

Red Light Holland Corp. (CSE: TRIP) (RLH) is in the ‘magic truffle’ business. Their business revolves around the production, growth and sale of a premium brand of ‘magic truffles’ to the legal, recreational market within the Netherlands. Sales are done through existing Smartshops operators and an advanced e-commerce platform. The Netherlands is a country with a long-standing, established, legal magic truffles market.

A Smartshop in the Netherlands selling legal magic truffles

Source

So what are magic truffles? Wikepidia describes them as:

“Magic truffles are the sclerotia of Psilocybin mushrooms that are not technically the same “mushrooms” as “mushrooms”. They are masses of mycelium that contain the hallucinogenic chemicals psilocybin and psilocin…..In October 2007, the prohibition of hallucinogenic or “magic mushrooms” was announced by the Dutch authorities. The ban on the mushrooms did not outlaw the hallucinogenic species in sclerotium form, due to authorities believing it to be weaker than the mushrooms. The psilocybin truffles which once made little sales became the only legal option to produce. Today smart shops in the Netherlands offer magic truffles as a legal alternative to the outlawed mushrooms.”

Psilocybin binds to a receptor in the brain for serotonin thereby resulting in enhanced mood and perception. Along with hallucinations and mood changes, people who take psilocybin experience a dreamlike sense of expanded consciousness.

Rather than extracting the active ingredients, Red Light Holland (“RLH”) believes in the entourage effect of ‘whole fungi’ medicine, meaning it is better for customers to consume the whole magic truffle.

Magic truffles sold in small containers ready for buyers to eat

Source

Some of the numerous benefits of magic truffles are said to be:

  • An expanded consciousness with increase creativity.
  • Increase of “openness” and other beneficial shifts in personality.
  • Mental relaxation with floods of laughter, intense joy and satisfaction.
  • Reduce depression.
  • Smoking cessation and other addictions.

A randomized, double-blind trial from Johns Hopkins in 2016 found that a single dose of psilocybin substantially improved quality of life and decreased depression and anxiety in people with life-threatening cancer.

Another research report discovered that psilocybin can also bind itself to receptors that stimulate healing. It is thought that psilocybin repairs and grows brain cells, which could prove beneficial to those who suffer from depression or other mental health problems.

Red Light Holland’s goal is to supply the recreational and medical market with naturally occurring, non-synthetic psilocybin, as current clinical trials are using a synthetic psychedelic pro-drug compound.

Magic truffles products

  • Microdosing Kits – RLH is currently developing a premium microdosing kit comprised of the ideal truffle quantity promoting responsible use. This non-synthetic RLH premium product will be available soon.
  • Merchandise – RLH will be launching a line of top tier merchandise very soon. All of the premium RLH clothing line and merchandise will be available for purchase at the RLH website and selected stores.

A Red Light Holland Microdosing Kit with magic truffles

Source

RLH also plan to seek a EU-GMP certification for their production facility in the Netherlands, in order to produce and supply medical grade, EUGMP certified premium magic truffles within the Netherlands.

RLH plan to raise funds that will be used to go public and build a 3000 sq feet magic truffles production facility and then start production to bring in revenue. Investors can view the company presentation here.

Closing remarks

Numerous studies and anecdotal stories confirm the amazing medical and recreational benefits of magic truffles. The people of the Netherlands certainly think so.

Red Light Holland and their magic truffles business are in the very early stages of development. Certainly this means higher risk and reward should it succeed. Those that got in early on the cannabis boom made multi-bagger returns. Will this happen with ‘magic mushrooms’ I do not know. History has shown there is a demand for the product, so only time will tell.

Red Light Holland begins trading today on the Canadian Securities Exchange under the ticker ‘TRIP’ at market open today.




What should investors do as USA-China tensions build over trade war, Hong Kong and COVID-19

The US-China trade war of 2018-20 followed by the COVID-19 global lockdowns in February-April 2020 have left many investors feeling jaded, as stockmarkets gyrated up and down. President Trump and Xi Jinping continue to battle with not much really being resolved. This time they are fighting over an investigation into COVID-19 and what will happen in Hong Kong. Hong Kong is the perfect example of the two super powers pulling in opposite directions.

Today I look at some events that are likely to soon happen and how investors can navigate these tricky times.

Protests in Hong Kong as US-China tensions rise again

From 2018 to 2020 both the US and China businesses suffered a steady increase in tariffs due to the US-China trade war. The biggest losers from the trade war were manufacturers of global goods, especially those traded between the US and China such as US agriculture. Globally the auto industry was hit hard, as was the electronics industry, as poor sentiment caused consumers to reduce their purchases. The main winners in the trade war period were cash, bonds, gold, rhodium, and palladium. In the US the best performing sectors were utilities, healthcare, and tech.

Then in 2020 we finally got a US-China trade ‘deal’. Unfortunately many tariffs remain and the COVID-19 crisis has meant China has not been able to stay on track with its side of the deal, notably US agricultural purchases.

A history of US-China tariffs from 2018 to Feb. 2020

Source

Fast forward to today and given the US and China appear unable to settle their differences the following events are possible to occur next:

  • The US may add additional tariffs on China if China goes ahead with “any decision impinging on Hong Kong’s autonomy and freedoms”.
  • The US may raise existing tariffs on China if China fails to meet its current obligations.
  • The US may look to boycott more Chinese companies, as they did with Huawei technologies.
  • The US may force Chinese listing companies to delist from US exchanges. Last week the US Senate passed a new Bill (Holding Foreign Companies Accountable Act), effectively stating that Chinese companies must play by American rules or be banned from U.S. exchanges. This requires Chinese companies being fully accountable both for their financials and their share registry (cannot be CCP controlled). Luckin Coffee (NASDAQ: LK) and Baidu (NASDAQ: BIDU) already have indicated they plan to delist.
  • The US will work to secure critical materials and safer supply chains with their allies. This has already started with uranium, and is proposed with rare earths and other key battery materials (Onshoring Rare Earths Act – the “ORE Act”) .
  • China may retaliate with tariffs on more US goods, or boycott US companies and their products.

Reference for ideas: United States Strategic Approach to The People’s Republic of China

The playbook for investors

Reduce exposure

  • Reducing or selling completely exposure to US listed Chinese companies. It would also be wise to do the same for any Hong Kong listed stocks. The same could be said for any Chinese or Hong Kong foreign exchange exposure, property, infrastructure or bonds etc.
  • Reduce or sell US companies with considerable exposure to China earnings. Some examples would include Foxconn, Apple, Qualcomm, and Starbucks.

Increase exposure

  • US stocks in sectors with minimal China exposure – US utilities, US healthcare & aged care, US food and consumables, some US tech (Alphabet Google, Facebook, Amazon, and Netflix).
  • Countries which will benefit from increased US trade or US supply chain shifts away from China – USA, Canada, Mexico, Australia, Vietnam, and maybe India.
  • Critical materials companies including uranium. The recent US ‘ORE Act’ lists 6 key critical materials – rare earths, scandium, cobalt, graphite, lithium and manganese. Investors should look for quality sources of these materials in the US or in US allied countries.
  • Gold stocks and physical gold ETFs (SPDR Gold Trust ETF (GLD) or iShares Gold Trust ETF (IAU)).
  • Other valuable metals related stocks – Silver, rhodium, platinum, and palladium.

Closing remarks

The trade war and now COVID-19 has finally served a purpose to wake up the US to get their manufacturing and supply chains back under control, and away from China’s control. This will mean we can expect to see further moves to secure critical materials by the US. Already we have seen the US uranium reserve announcements, and now the ‘Ore Act’ to secure the US for rare earths and critical battery metals supply.

In these rapidly changing times investors need to stay nimble and look forward to what will likely unfold next. The next battlegrounds between the US and China will involve the biggest trends of the 2020’s – Securing critical material supply chains, 5G, electric vehicles, solar & wind energy, energy storage, and of course the top tech trends (AI, cloud, streaming, eSports, social media, and mobile payments).

Finally a worst case scenario is we may be in for a full blown US-China cold war. In that case investors will do well to add some cash and gold stocks to their portfolio. But don’t forget some exposure to the key critical materials (and companies that produce them) as they will be the foundation for the 2020’s as we move into a cleaner and more automated/connected world.




StageZero Life Sciences up 177% YTD as they move into COVID-19 testing

As global COVID-19 cases hit a staggering 5 million, StageZero Life Sciences Ltd. (TSX: SZLS) stock price has surged 177% YTD. This is mostly due to being oversold late in 2019, but also due to their recent move into offering COVID-19 testing. And what a great move it was!

On April 20, 2020 StageZero announced that they will offer both the PCR-based nucleic acid tests as well as qualitative antibody testing for COVID-19 (coronavirus). The PCR tests help determine if a patient has an active infection and the antibody test determines if a patient previously had the infection, as it detects the antibodies to the coronavirus. StageZero will initially offer the BTNX Rapid Response test under Section IV.D of the FDA’s Policy for Diagnostic Tests for Coronavirus Disease-2019 while awaiting EUA approval.

StageZero Life Sciences two tests for COVID-19 (coronavirus)

Source

As you can imagine the global demand for accurate COVID-19 test kits is truly enormous and growing every day. Most countries have severe shortages of test kits. Below are just a few examples, and these are in the richer developed countries.

In the USA, shortage of COVID-19 test kits has been a significant problem. Anthony Fauci said the USA needs to double the current testing rate of 1.5 -2 million tests a week. A report by Harvard University stated that the US needs to be able to test 5 million people per day to safely begin to reopen their economy by June 2020. So far in the US, the total number of tests has only been 9.6 million, and that is over a period of several months.

In Australia, State Health Ministers have reported shortages of reagents and kits used to conduct coronavirus tests in laboratories, as unprecedented demand for testing combines with limits on exports from other nations struggling to contain COVID-19.

Working backwards to estimate the real global demand for COVID-19 testing, one can argue that 50-100 tests are needed per confirmed case. Given daily global cases are hovering around 90,000, that would mean daily global COVID-19 testing needs to be in the vicinity of 4.5 to 9 million per day. One can argue the real need is higher given the global population of over 7.7 billion, and the need for repeat or follow up testing.

Currently the numbers of COVID-19 cases being tested is severely limited by a lack of supply of test kits. The current leader per capita in testing is Denmark. And even in Denmark testing has only reached 69 per 1,000 people (6.9%) that have been tested. In the US testing has only reached 35 per 1,000 people (3.5%). Indonesia is at 0.54 per 1,000 people (0.054%) showing just how low testing rates are in developing countries.

The number of COVID-19 tests being done globally is still extremely low as test kits are in very short supply

Source

All of this means that the opportunity for companies that have existing facilities that can rapidly scale up accurate testing is enormous. We don’t know how long this will go on for, but the way it is looking demand for COVID-19 testing should be here for at least 2 years and maybe much longer.

StageZero teams up with UDoTest to help physicians to access COVID-19 testing

StageZero Life Sciences are not only rapidly expanding their testing kits, but also building networks to assist Doctors to get their patients tested.

On May 19 StageZero announced: “StageZero Life Sciences partners with UDoTest to link physicians and their patients to urgent COVID-19 testing.” UDoTest is a B2B self-collection health testing software platform designed to personalize at-home lab testing experiences.

Allison Martin, CEO and Founder of UDoTest, explains:

“After being approached by several physician networks to help them gain access to quality tests, and immediate orders, we needed to start quickly,” said Allison Martin, CEO and Founder of UDoTest. “Physicians and their patients, in lock-down, have requested help in setting up a virtual health solution to enable safe testing access. StageZero has this capability and is a good first partner for what will be an important solution for many.”

StageZero Life Sciences is now facing an incredible opportunity as COVID-19 testing demand far outstrips supply, both for testing if you have the disease, and testing if you have previously had it. Combining this with their revolutionary Aristotle® screening test for 10 cancers from a single sample of blood, shows why this company is rapidly rising.

For investors it is still only early days for StageZero Life Sciences, despite the 177% YTD price surge, the Company trades with a market cap of just C$41 million. Analyst’s consensus price target is C$0.50, so plenty of potential upside ahead given the current stock price of C$0.125.

Disclaimer: Matt Bohlsen is a shareholder of StageZero Life Sciences Ltd. (TSX: SZLS)