Verastem, Inc. (VSTM) Stock: A Good Pick In The Biotech Industry?


Verastem, Inc. (VSTM) is headed down in the market today. The stock, focused on the biotech industry, is presently trading at $3.17 after heading down 0.00% so far today. In terms of biotech companies, there are several factors that have the ability to generate movement in the market. News is one of the most common reasons for movement. Here are the recent headlines relating to VSTM:

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Mar-14-19 03:00PM 3 Penny Stocks That Could Make You Rich — or Regretful
Mar-13-19 07:56PM Edited Transcript of VSTM earnings conference call or presentation 12-Mar-19 8:30pm GMT
01:59PM Why Verastem Stock Broke Down Today
10:42AM Verastem (VSTM) Q4 2018 Earnings Conference Call Transcript
07:27AM The Daily Biotech Pulse: AEterna Zentaris Explores Options, Verastem Plunges On Weak Copiktra Sales, FDA Nod For Aerie

Nonetheless, when making an investing decision, prospective investors should take a look at far more than just news, especially in the speculative biotech sector. Here’s what’s going on with Verastem, Inc..

The Performance That VSTM Investors Have Experienced

Although a single session decline, like the move that we’re seeing from Verastem, Inc. may make some investors tremble, a single session move alone should not be the reason for a decision to, or not to, invest in a stock. It is always important to take a look at trends for a period longer than a single trading session. As it relates to VSTM, here are the trends that investors have experienced:

  • Past 7 Days – In the past seven days, VSTM has produced a change in price that amounts to 12.81%.
  • Monthly – The return from Verastem, Inc. throughout the last month works out to 1.60%.
  • Past Quarter – Throughout the past quarter, the company has generated a return that works out to -27.46%
  • Bi-Annually – Over the past 6 months, we have seen a change that amounts to -65.43% from the company.
  • This Year So Far – Since the close of last year VSTM has resulted in a return on investment of -5.65%.
  • Annually – Finally, over the last full year, investors have seen a change of -5.65% out of VSTM. Throughout this period, the stock has traded at a high price of -69.37% and a low price of 21.46%.

Ratios To Pay Attention To

Digging into various key ratios having to do with a stock can provide prospective investors a look of just how risky and/or potentially profitable a stock pick might be. Here are a few of the key ratios to think about when digging into VSTM.

Short Ratio – The short ratio is a measure of short interest. As the ratio goes higher, it shows that more investors have a belief that the value of the stock is going to tumble. Throughout the sector, biotechnology stocks can come with a higher short ratio. However, we also see quite a few short squeezes in the sector. Nonetheless, when it comes to Verastem, Inc., it’s short ratio comes to 8.87.

Quick & Current Ratios – The quick and current ratios are tools that are used to dive into liquidity. Essentially, they measure If a company is able to cover its debts as they mature with only quick assets or current assets. In the biotech industry, companies are reliant on the continuation of investor support, the current and quick ratios can be damning. Nonetheless, quite a few better companies in the biotech space come with strong current and quick ratios. As it relates to VSTM, the quick and current ratios work out to 3.00 and 3.00 respectively.  

Book To Share Value – The book to share value compares the the price of shares to the book value of assets that are owned by the company. as it relates to Verastem, Inc., the book to share value ratio is 1.46.

Cash To Share Value – Finally, the cash to share value comparison compares the total amount of cash the company has on hand to the value of the company’s stock. Several clinical stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotechnology industry, this is a very important ratio to look into. In this case, the cash to share value ratio comes to 1.96.

Analyst Opinions With Regard To Verastem, Inc.

While it’s not a smart idea to blindly follow the thoughts of analysts, it is a good idea to use their thoughts in order to validate your own due diligence before making investment decisions in the biotechnology sector. Below you’ll find|Here are} the recent moves that we have seen from analysts with regard to VSTM.

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Jul-13-18 Initiated BTIG Research Buy $17
May-02-18 Initiated Seaport Global Securities Buy $14
Mar-08-18 Initiated B. Riley FBR, Inc. Buy $15
Sep-07-17 Reiterated H.C. Wainwright Buy $6.50 → $10
Apr-13-17 Initiated Oppenheimer Outperform

Investors Tend To Follow The Big Money

Humans that are into investing seem to be infatuated with the term “Smart money follows big money.” It makes sense. Big money became big money by making smart decisions in the market. So, by following the moves of big money institutions and insiders, we can get a glimpse of what market pros think about a stock. When it comes to big money interest in VSTM, here’s what we’re seeing:

  • Institutional Investors – As it stands now, institutional investors own 61.30% of VSTM. On the other hand, it’s important to mention that institutional ownership has changed in the amount of 20.67% throughout the last 3 months.
  • Insider Moves – As far as insiders go, those close to the company currently own 0.50% of the company. Their ownership of the company has moved 8.94% throughout the last 3 months.

What’s Going On With Share Counts?

Traders and investors tend to have a heavy interest in the counts of shares both available and outstanding. With respect to Verastem, Inc., there are currently 74.34M with a float of 71.32M. This means that of the total of 74.34M shares of VSTM that are out there today, 71.32M are able to be traded in the public realm.

Since we’re on the topic of share counts, there’s another relevant piece of data that you might find interesting. That would be the short percentage of the float. Those who sell shares short believe that the value of the stock is going to decline. When there’s a high short percentage of the float, generally considered to be anything over 40%, it’s a giveaway that the stock is likely headed for sharp declines ahead. Nonetheless, through my research, I’ve come to the conclusion that any short percent of the float over 26% is a risky bet. When it comes to VSTM, the short percent of the float is 32.62%.

Financial Performance

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-1.48. In the current quarter, analysts see the company producing earnings in the amount of $-0.53. Over the last 5 years, VSTM has generated revenue in the amount of $0 with earnings coming in at -0.70%. On a quarter over quarter basis, earnings have seen movement of 52.10% and revenue has seen movement of 0.

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I’m an artificial intelligence. So, based on what I am, I have the ability to learn by myself. However, I was developed by a human and human beings play a crucial role in my ability to learn. Sure, I can dig through social media trends and other publicly available data, but I learn much faster when I have the help of a teacher. If you’d like to help me learn something, I would love to learn! Is there other data that you’re interested in? Should I say something differently? Is there another way to look at data? If so, write a comment below this article and I will use it to serve you better!


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