Magenta Therapeutics, Inc. (MGTA) Stock: A Good Pick In The Biotechnology Industry?


Magenta Therapeutics, Inc. (MGTA) is headed down in the market today. The company, one that is focused in the biotechnology space, is presently trading at $17.75 after tumbling -3.85% so far today. As it relates to biotechnology stocks, there are a number of aspects that have the potential to cause declines in the market. One of the most common is news. Here are the most recent trending headlines surrounding MGTA:

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Mar-20-19 12:07PM Raymond James Thinks Magenta Still Has Upside
Mar-19-19 07:30AM Magenta Therapeutics Reports Fourth Quarter and Full Year 2018 Financial Results and Recent Business Highlights
Mar-15-19 01:32PM How Many Insiders Bought Magenta Therapeutics, Inc. (NASDAQ:MGTA) Shares?
Mar-06-19 04:05PM Magenta Therapeutics to Present at Investor Conferences in March
Feb-25-19 08:15AM Magenta Therapeutics Presents Preclinical Data on Targeted Non-Genotoxic Conditioning Programs, Including First Conditioning Development Candidate

However, any time investors are making a decision with regard to investing, prospective investors should take a look at far more than news, this is especially the case in the speculative biotechnology sector. Here’s what’s going on with Magenta Therapeutics, Inc..

Returns That MGTA Investors Have Seen

Although a decline in a single session, like the fall that we’re seeing from Magenta Therapeutics, Inc. might lead to fear in some investors, a single session move alone should not be the basis of a decision to, or not to, buy a company’s stock. It’s always important to dig into trends for a period longer than a single trading day. As it relates to MGTA, below are the movements that investors have seen:

  • Weekly – Throughout the past 7 days, MGTA has seen a change in price in the amount of 25.58%.
  • Past Month – The ROI from Magenta Therapeutics, Inc. throughout the last month comes to 99.78%.
  • Past Quarter – In the last three months, the company has produced a ROI that works out to 166.76%
  • Past Six Months – In the last 6 months, we’ve seen a change that equates to 52.94% from the stock.
  • This Year So Far – Since the open of this year MGTA has generated a return on investment of 223.86%.
  • Full Year – Finally, over the last year, we have seen a change that works out to 0 out of MGTA. Over this period, the stock has traded at a high price of -10.08% and a low price of 234.27%.

Key Ratios

Looking at a few ratios having to do with a company can provide prospective traders a look of just how dangerous and/or rewarding a pick may be. Here are some of the key ratios to look at when looking at MGTA.

Short Ratio – The short ratio is a measure of short interest. The higher this short ratio, the more investors are expecting that the value of the stock is headed for declines. In general, biotech stocks can carry a higher short ratio. However, we also see quite a few short squeezes in the industry. Nonetheless, as it relates to Magenta Therapeutics, Inc., the stock’s short ratio clocks in at 8.42.

Quick & Current Ratios – The quick and current ratios are ratios that are used to get an idea of the company’s liquidity. Essentially, they measure If a company is able to pay for its debts when they mature based on current assets or quick assets. In the biotech industry, many companies are reliant on the continuation of support from investors, the quick and current ratios can look upsetting. However, some gems in the biotechnology industry come with good quick and current ratios. In terms of MGTA, the quick and current ratios total up to 13.70 and 13.70 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the book value of assets owned by the company. In this particular case, the book to share value ratio comes in at 4.84.

Cash To Share Value – Finally, the cash to share value comparison compares the amount of cash the company has on hand to the price of the company’s stock. Several early stage biotech companies struggle to keep cash on hand. So, if you’re interested in a stock in the biotechnology sector, this is a very important ratio to look into. As it relates to MGTA, the cash to share value ratio is 6.08.

How Analysts Feel About Magenta Therapeutics, Inc.

Although it’s not a smart idea to avoid doing your DD and blindly following the thoughts of analysts, it is a good idea to consider their thoughts in order to validate your own thoughts when it comes to making an investment decision in the biotechnology space. Here are the most recent moves that we’ve seen from analysts with regard to MGTA.

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Mar-15-19 Initiated Raymond James Outperform
Jul-16-18 Initiated Wedbush Outperform $22
Jul-16-18 Initiated JP Morgan Overweight $18
Jul-16-18 Initiated Goldman Buy $18

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 MGTA, here’s what we’re seeing:

  • Institutions – Currently, institutional investors own 56.50% of MGTA. Nonetheless, it’s worth considering that the ownership held by institutions has seen a move of 133.39% throughout the past 3 months.
  • Insider Moves – As far as insiders go, members of the management team and others close to MGTA currently own 14.47% of Magenta Therapeutics, Inc.. Their ownership of the company has changed in the amount of 0 in the last 3 months.

What You Need To Know About Share Counts

Another point of interest that seems to be important to investors is the amount of shares of a company that are outstanding and currently available. At the moment, there are 26.27M shares of Magenta Therapeutics, Inc. outstanding. Shares outstanding refers to the total amount of shares of a stock that exist. As far as the float goes, or the amount of shares that are actually available on the retail market, MGTA has a float of 26.27M.

It’s also important to look at the short float. Think about it, if a high percentage of the float is shorted, the overall opinion among traders is that the equity is going to take a dive. When it comes to MGTA, the percentage of the float that is shorted is 5.63%. In general, concerning short percent of the float would be any percentage over 40%. Through my work, I have calculated that any short ratio over 26% is likely a a play that could prove to be very risky.

What We’ve Seen In Financial Results

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-2.31. In the current quarter, analysts see the company producing earnings in the amount of $-0.56. Over the last 5 years, MGTA has generated revenue in the amount of $0 with earnings coming in at 0. On a quarter over quarter basis, earnings have seen movement of -223.00% and revenue has seen movement of 0.

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