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2020.05.17 Penn Wealth Report Vol 8 Issue 03

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17 May 2020 penn wealth Report voluMe 8 issue 03 15 Penn Wealth Report Copyright 2020. All Rights Reserved. investment intelligence Under The radar Four investments being ignored—or missed—by the financial press Emergent BioSolutions Health Care Biotechnology Emergent BioSolutions (EBS $72) is a truly fascinating mid-cap ($3.8B) specialty drug manufacturer. e company has two divisions: biodefense and biosciences. e biode- fense unit focuses on an extremely timely area: countermeasures that address public health threats. Needless to say, the US government provides a good measure of the funding for this area, and we only see the division growing. Emergent's biosciences unit is primarily focused on hematology and oncology, with a secondary focus on transplants, infectious diseases, and autoimmunity. is mid-cap has growing sales, growing income, and one heck of a strong investment thesis based on current events. Ciena Corp Communications Equipment BioMarin Pharma Biotechnology Fortinet Inc Cybersecurity Ciena Corp (CIEN $31-$48-$50) is a communications equipment maker which pro- vides network hardware, software, and services that support the management of video, data, and voice traffic on communications networks around the world. We expect the company to play a key role as companies upgrade their existing communication networks to the 5G infrastructure. As the US government has placed Chinese firm Huawei on its banned companies list, look for Ciena to continue gaining market share, both in this country and in Europe. Not only does does the company have a strong growth trajectory, it has strong financial health: with current assets of $2.27B and current liabilities of $733M, its current ratio is 3.09. BioMarin Pharmaceutical (BMRN $63-$87-$97) is a US-based biotech which focuses on rare-disease therapies. We first wrote about this $15 billion dynamic company three years ago, and find it at a very attractive price point yet again. It arguably holds monopolies in a number of rare-disease niche markets, and has formed alliances with larger biotech firms to develop, manufacture, and market a number of potentially life-saving drugs. e company's approved drugs have been granted orphan-drug status, meaning they have seven years of market exclusivity in the US, and ten years in the European Union. e company's operating revenue has increased every year for the past decade, with sales of $1.7 billion in 2019 (steadily up from $370 million a decade ago). We still consider BMRN to be on the short list of takeover candidates in the industry. e company's shares recently broke out of a cup with handle pattern and appear to have room to run. With a growing enterprise customer base (which happens to be where the money is) and cutting-edge technologies rolling out for the 5G environment, Fortinet (FTNT $69- $143-$144) is the obvious choice for tens of thousands of global companies, government agencies, and service providers. Customers like the firm's consolidated platform, which equates to a simpler deployment, wider breadth of coverage, and fewer third-party vendors to deal with.Fortinet has a relative strength rating of 95, meaning it is outperforming 95% of the stocks in the S&P 500, and that trend line is rising. Unless you want to buy a bucket of cybersecurity names via the ETF CIBR, Fortinet is worth a strong look. 3 2 1 4

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