Hanseatic Championship - Round 1, 8th

Quest for top equity investments

We have almost completed the extensive Round 1:

1st: Solid Growth / Consumer (40) --> completed May 17
2nd: Solid Growth / Industrials & Materials (34) --> completed May 21
3rd: Solid Growth / Health Care (20) --> completed May 25
4th: Solid Growth / Technology (27) --> completed May 27
5th: Turnaround / Consumer & Technology (16) --> completed May 28
6th: Turnaround / Industrials & Materials (34) --> completed May 30
7th: Highflyer / Consumer, incl. fintechs (18) --> completed June 1
8th: Highflyer / Health Care (17) --> completed June 3, see below
9th: Highflyer / Technology, incl. industrials (34)

Today, we cover the 8th out of 9 divisions, “Highflyer / Health Care”. This is by far the most difficult division to eliminated stocks from. Many of these stocks have stellar, “10x”-type growth prospects. But will they come to fruition? While we can evaluate the medical potential similarly to other innovative technologies, we have trouble assessing the regulatory side. It gets very political when health issues become unnecessarily emotional as the corona-crisis has shown (our solution from Aug'20).

We have excluded stocks with largely binary events, i.e. a drug approval can make a stock go up multiple times versus a non-approval make it drop to near zero. Therefore, of the 17 health care stocks qualified as “Highflyers”, 12 are medtech and only 5 are biotech stocks. A couple of "corona" stocks, German-based Biontech and Curevac, quailified given their excellent growth trajectory. However, both failed at this hurdle for the reasons above.

Besides fundamental momentum, our winners here need to have a positive assessment of the following questions: