Summit Therapeutics plc (SMMT) Stock: A Good Pick In The Biotechnology Sector?

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Summit Therapeutics plc (SMMT) is trending down in the market in today’s trading session. The stock, focused in the biotech sector, is currently trading at $1.89 after a move down of -3.57% so far today. As it relates to biotechnology stocks, there are a number of factors that have the ability to cause declines in the market. One of the most common is news. Here are the recent headlines centered around SMMT:

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Mar-18-19 07:00AM Summit Therapeutics to Present at Upcoming Conferences
Mar-14-19 07:00AM Summit Highlights Use of Discuva Platform in Identifying New Mechanism Antibiotics against Neisseria Gonorrhoeae and ESKAPE Pathogens at Novel Antimicrobials and AMR Diagnostics 2019 Conference
Feb-27-19 10:00AM Four Healthcare Stocks Getting A Boost On Wednesday
Feb-25-19 07:00AM Summits SMT-571 Potent Against Over 200 Clinical Isolates of Neisseria Gonorrhoeae, Including Numerous Multi- and Extensively-Drug Resistant Strains, in Published Preclinical Data
Feb-19-19 08:20AM New Research Coverage Highlights Global Payments, Tableau Software, Summit Therapeutics, Utah Medical Products, Apollo Commercial Real Estate Finance, and Urstadt Biddle Properties Consolidated Revenues, Company Growth, and Expectations for 2019

However, when making an investing decision, prospective investors should take a look at far more than news, especially in the generally speculative biotechnology space. Here’s what’s happing when it comes to Summit Therapeutics plc.

The Performance That We’ve Seen From SMMT

While a move toward the top in a single session, like the move that we’re seeing from Summit Therapeutics plc might cause fear in some investors, a single session decline alone shouldn’t be the reason for a decision to, or not to, buy a company’s stock. It’s always a good idea to take a look at trends experienced by the stock for a period longer than a single trading session. In the case of SMMT, here are the returns on investment that investors have seen:

  • Past Seven Days – Throughout the past 7 days, SMMT has seen a price change that amounts to 4.26%.
  • Monthly – The monthly returns from Summit Therapeutics plc comes to 56.80%.
  • Past 3 Months – Throughout the past 3 months, the company has generated a return of 61.98%
  • Past Six Months – Throughout the previous six months, we have seen a change that equates to -7.55% from the company.
  • This Year So Far – Since the close of last year SMMT has produced a ROI of 70.43%.
  • Full Year – Finally, in the past full year, we’ve seen movement that comes to -85.62% out of SMMT. Over this period, the stock has sold at a high price of -86.77% and a low of 71.82%.

Rations That Traders Should Look Into

Digging into a few ratios having to do with a company can provide prospective traders a look of how risky and/or rewarding a an investment option might be. Here are a few of the important ratios to think about when looking at SMMT.

Short Ratio – The short ratio is a tool that’s used by investors to measure the level of short interest. The higher this short ratio, the more investors are expecting that the stock is going to go down. Throughout the sector, biotech stocks tend to have a higher short ratio. On the other hand, we also see quite a few short squeezes in the industry. Nonetheless, with regard to Summit Therapeutics plc, the stock’s short ratio clocks in at 7.83.

Quick & Current Ratios – The quick and current ratios are tools that get an idea of the company’s liquidity. Essentially, they measure the company’s abilities to cover its debts when they come due with only quick assets or current assets. In the biotechnology space, many companies rely on continued investor support, the current and quick ratios can seem upsetting. However, some good picks in the biotech industry do have strong quick and current ratios. As it relates to SMMT, the quick and current ratios total up to 0 and 0 respectively.  

Book To Share Value – The book to share value ratio compares the the share price to the current book value of assets owned by the company. when it comes to Summit Therapeutics plc, the book to share value ratio comes in at 2.26.

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 shares. Several clinical stage biotech companies have a hard time keeping cash on hand. So, if you’re looking into a biotechnology stock, this is an important ratio to think about. As it relates to SMMT, the cash to share value ratio is 0.

Analyst Opinions Of Summit Therapeutics plc

Although it’s not a smart idea to avoid doing your due diligence and blindly following the thoughts of analysts, it is a good idea to consider their thoughts when validating your own due diligence when it comes to making an investment decision in the biotechnology space. Below you’ll find the most recent moves that we’ve seen from analysts as it relates to SMMT.

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Jun-28-18 Downgrade Janney Buy → Neutral
May-02-18 Initiated Janney Buy
Apr-12-18 Reiterated Needham Buy $30 → $27
Feb-13-18 Initiated BTIG Research Buy $33
Jan-04-18 Initiated SunTrust Buy $24

Moves From Big Money Players

An interesting fact I’ve come to understand in my brief period on Earth has been that good investors tend to follow big money players. In general, investors that are looking to keep the risk down will keep an eye on moves made by institutional investors and those on the inside. With that said, how does the big money flow as it relates to SMMT? Here’s the data:

  • Institutional Investors – Currently, institutions own 17.57% of the company. On the other hand, it’s worth noting that the ownership held by institutions has seen a move in the amount of 0 in the last quarter.
  • Insiders – As far as insiders go, those close to the situation currently own 94.97% of the company. Their ownership of the company has seen a change of 0.00% throughout the past 3 months.

A Look At 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 82.13M shares of Summit Therapeutics plc 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, SMMT has a float of 5.71M.

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 SMMT, the short percent of the float is 10.09%.

Financial Performance

What have ween seen from SMMT in terms of financial results?Here’s what you need to know:

  • Analyst Expectations – Currently, analysts are expecting that SMMT will generate EPS in the amount of -0.52, with -0.24 being announced in the earnings report for the current quarter. Although this data is not associated with earnings, because we are talking about Wall Street analysts, Summit Therapeutics plc is presently graded as a 2.00 when rated on a scale from 1 to 5 where 1 is the worst average analyst grade and 5 is the best rating.
  • 5-Year Sales – Throughout the past half decade, Summit Therapeutics plc has created a movement in revenue that adds up to 0. Earnings per diluted share through the last half decade have experienced movement in the amount of 0.
  • Quarter Over Quarter – In terms of quarter over quarter earnings performance, or Q/Q data as it is generally referred to as in today’s society, SMMT has generated a change in earnings in the amount of 0. Summit Therapeutics plc has also experienced a change when it comes to sales volume that totals 6.10%.

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