Solt DB Invest provides more and better information for biotech stocks, so you can make more informed investing decisions. We take a bottom-up approach to stock research that requires us to deeply understand each technology and business in our coverage ecosystem.
The finch communicates its research with three types of content:
Solt DB Invest provides a Margin of Safety Dashboard with the attractiveness of all companies in our coverage ecosystem, according to our modeling, and all Research Notes. Each individual company has a landing page with Research Deep Dives, Research Notes, and modeling history for that specific company.
The Margin of Safety is the distance between the current stock price and our modeled fair valuation. It's presented as a percentage.
Similar to how the Margin of Safety quantifies our research, the Allocation Suggestion quantifies the overall risk level of a biotech stock.
Solt DB Invest estimates the fair value of biotech businesses by building and continuously refining risk-adjusted net present value (rNPV) models. The modeled fair valuation is the primary output of each rNPV. This metric allows us to calculate the Margin of Safety, which is how we simplify the modeling process for investors of all backgrounds and experience levels.
Very rarely, a biotech business has the right combination of factors Solt DB Invest wants to bring to your attention. An Asymmetric Opportunity often has a significant Margin of Safety combined with an unusual or overlooked degree of certainty capable of driving inflection points in the share price.
Unlike stock recommendation services that offer multiple "Best Buys" each month, Solt DB Invest has only used the Asymmetric Opportunity label four (4) times since June 2022.
The average Asymmetric Opportunity has delivered a gain of 26.2% and outperformed the S&P 500 by 6.7% as of April 2, 2024.
Most if not all portfolios should have a healthy allocation to steady, profitable, not-much-babysitting-required businesses. Sure, they're boring, but that's kind of the point. Anchors are accompanied by low to moderate overall risk and provide stability through good times and bad.
Anchor positions typically have an allocation range of 0% to 15%.
By definition, most growth companies are speculative, but it's important to draw clear distinctions on a case-by-case basis. A business that's near profitability or generating cash flow should be more resilient in all market environments. A drug developer with higher probability of success assets or a late-stage drug candidate with high odds of approval should earn a durably higher valuation over time.
Although many individual investors believe their favorite growth stock is in this category, very few biotech stocks are Growth (Quality) positions. The Solt DB Invest coverage ecosystem had three Growth (Quality) and eight Growth (Speculative) positions out of 17 total companies at launch in October 2023.
Growth (Quality) positions are often the driving force of your portfolio's returns over your lifetime and can have the highest individual allocation. These are accompanied by moderate to very high overall risk.
Growth (Quality) positions typically have an allocation range of 0% to 15%.
Most growth stocks are speculative in nature. These businesses are accompanied by significant uncertainty, which can only be mitigated by execution over sufficiently long periods of time, not flashy slide decks and storytelling or one big announcement.
Many early-stage drug developers and unproven synthetic biology companies belong in this category, but can mature into the quality growth category with execution and de-risking. Growth (Speculative) positions are accompanied by high to very high overall risk.
Growth (Speculative) positions typically have an allocation range of 0% to 5%.
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