Type 1 diabetes is a disease, which destroys insulin producing cells, and affects around 36 million people, or 10% of the global diabetes population. Type 2 diabetes causes high blood glucose in the context of relative insulin deficiency, and is such less dangerous than type 1 and represents around 90% of all diabetes cases. There are approx. 371 million people with diabetes in the world, with a total cost of 470 billion USD, the treatment is done primarily through injection. Oramed intends to change this with a unique oral capsule, which would help with both disease prevention and treatment.
Oramed is based in Jerusalem, has a market cap of 77 million, short float of 1.5% with 1 insider purchase in the past 6 months. The largest shareholder is the CEO Nadav Kidron with a 10% holding.
Tower Semiconductor is a semiconductor manufacturer and leader in specialty foundry, with plants in Israel, US, and Japan. The company recorded a revenue of 638 mil. USD and a operating loss of 2 million. However, they generated operating cash flow of 70 million in the last year, with a capex of 103 million USD, the deficit being funded by an equity offering in the middle of the year. Their next year EPS is forecasted at 1 USD, giving them a forward P/E 6.5. Accounting for the Panasonic JV, their revenues would exceed 1 billion USD, which would give them a P/S of 0.3 with their current 300 mil. market cap. They currently hold 140 million in cash, and 300 million long-term debt.
I have decided to start watching small caps with huge breakouts, looking for catalysts or fundamental news that could change the downtrend of declining stocks and turn them into multibaggers. The idea is, that breakouts would serve as screening criteria, while I would use additional fundamental analysis to select stocks with highest potential. I will create a small cap portfolio if the picks prove to be successful.