Daily Press (Sunday)

What’s up the most this year? Cipher Mining and Carvana

- John Dorfman John Dorfman is chairman of Dorfman Value Investment­s LLC in Boston, and a syndicated columnist. His firm or clients may own or trade securities discussed in this column. He can be reached at jdorfman@dorfmanval­ue.com.

Some of the biggest gainers this year are so obscure that many investors won’t have heard of them.

On Nov. 4, I checked the biggest gainers year-to-date among all stocks with a current market value of $1 billion or more.

And the winners are….

„ Cipher Mining Inc., up 632%

„ Carvana Co., up 581%

„ BridgeBioP­harma Inc., up 278% „ AppLovin Corp., up 273%

„ Riot Platforms Inc., up 236%

If I had to buy one of these, it would be BridgeBio Pharma because I believe that gene therapy (its specialty) has immense promise. But my best guess is that all five of these skyrockets will fall back to earth.

Cipher Mining

Cipher Mining Inc. (CIFR), based in New York City, doesn’t mine gold or silver. It mines cryptocurr­ency, especially Bitcoin. In the past four quarters, its revenue was $56.2 million, and it lost $11.6 million, or five cents a share.

Cipher stock started the year trading at 56 cents a share, and as of Nov. 3, it was at $4.10 a share. During the same period, the price of Bitcoin more than doubled, which pretty much accounts for traders’ excitement about Cipher.

I’m not a crypto fan, but even if I were, I’d rather invest directly in Bitcoin than in Cipher Mining. The stock is expensive at 18 times revenue. In August, three Cipher executives (including both co-presidents) sold a fair slice of their shares.


Carvana Co. (CVNA) has given its investors a wild ride, going from the teens several years ago to a peak of about $365 in 2021, followed by a sickening fall. It started this year at $4.74 a share as bankruptcy rumors flew. As of early November, it stands at $32.28,

The concept here is to sell used cars online and let the buyers pick them up at high-rise buildings that resemble vending machines.

It’s an appealing concept, but in practice, Carvana has posted nine straight years of losses. And analysts predict the red ink will continue to flow at least through 2025.

BridgeBio Pharma

BridgeBio Pharma Inc. (BBIO), out of Palo Alto, California, is working on medicines for people with diseases stemming from a defect in a single gene, and people with cancer that has a clear genetic component. Eleven Wall Street analysts follow it, and 10 of them recommend buying the stock.

Here, too, the red ink flows. BridgeBio has seven straight years of losses, with at least three more losses projected. I would love to see the company succeed, but with the stock at 480 times the company’s revenue, I can’t recommend it. Too much hope is already built into the stock price.


Also based in Palo Alto is AppLovin Corp. (APP), which provides tools to help people develop and market mobile applicatio­ns (apps). Obviously that’s a trendy business. But I see some things that bother me.

The company’s debt is 215% of stockholde­rs’ equity. Personally, my limit is normally 100%. Revenue grew only about 1% in 2022 and a small profit in 2021 changed into a loss in 2022. Analysts think the company will be profitable this year and in the future.

Riot Platforms

Riot Platforms Inc. (RIOT) sounds like a fun stock to speculate in. But in the past 15 years, the company has shown losses in 14. The only profit was in 2021, and then only if you don’t count nonrecurri­ng items.

Based in Castle Rock, Colorado, the company is primarily a Bitcoin miner. So it has been up this year for the same reason as Cipher Mining has — the strong performanc­e of Bitcoin.

Riot has a lot of cash and little debt. But on the negative side, the stock sells for seven times revenue, several insiders have sold shares this spring and summer and the company’s return on stockholde­rs’ equity is a dismal negative 22%.

The record

A year ago, I wrote about the year’s four biggest gainers, and recommende­d two of them. Tidewater Inc. (TDW) rose 102%, while PBF Energy (PBF) declined 1%. The average for my buys was therefore just over 50%, a figure I’ll happily accept.

However, the two stocks I said to avoid were both up substantia­lly. Target Hospitalit­y Corp. (TH) returned 27% and Internatio­nal Seaways Inc. (INSW) 29%. That’s less than the stocks I recommende­d, but still well above the Standard & Poor’s 500 at 16.4%.

Indeed, over the years I’ve been too harsh on the high flyers. The stocks I said to avoid have averaged a 26.3% return, compared to 14.8% for the S&P 500.

Bear in mind that my column results are hypothetic­al and shouldn’t be confused with results I obtain for clients. Also, past performanc­e doesn’t predict the future.

Disclosure: One of my clients owns PBF Energy.

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