Verastem, Inc. (VSTM) Stock: A Good Pick In The Biotechnology Space?


Verastem, Inc. (VSTM) is making a move down in the market in today’s trading session. The stock, focused in the biotechnology industry, is presently priced at $3.23 after a move down of -7.18% so far today. As it relates to biotechnology stocks, there are a number of aspects that have the ability to generate price movement in the market. One of the most common is news. Here are the recent headlines associated with VSTM:

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Mar-18-19 04:08PM Edited Transcript of VSTM earnings conference call or presentation 12-Mar-19 8:30pm GMT
Mar-14-19 03:00PM 3 Penny Stocks That Could Make You Rich — or Regretful
Mar-13-19 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 a decision with regard to investing, investors should focus on far more than news, this is especially the case in the highly speculative biotech industry. Here’s what’s happing when it comes to Verastem, Inc..

Recent Trends From VSTM

While a move toward the top in a single session, like the fall that we’re seeing from Verastem, Inc. might make some investors tremble, that by itself shouldn’t be the basis of a decision to, or not to, invest in a stock. It is generally smart to dig into trends beyond a single trading day. In the case of VSTM, below are the returns on investment that we have seen:

  • Past 5 Sessions – Throughout the last 5 trading sessions, VSTM has produced a change in price that amounts to 9.78%.
  • Monthly – The monthly returns from Verastem, Inc. works out to 11.18%.
  • Past Quarter – In the last quarter, the company has generated a ROI that comes to -5.18%
  • Bi-Annually – Throughout the last 6 months, we’ve seen a performance that works out to -60.27% from the stock.
  • This Year So Far – Since the the first trading session of this year VSTM has generated a return of 3.57%.
  • Full Year – Lastly, in the past full year, we have seen a change that works out to 11.90% from VSTM. Over this period, the stock has traded at a high of -68.79% and a low of 23.75%.

Ratios To Pay Attention To

Looking at a few ratios associated with a company generally gives prospective traders an understanding of just how dangerous and/or potentially profitable a pick might be. Here are a few of the most important ratios to think about when looking at VSTM.

Short Ratio – The short ratio is a tool that’s used to get an understanding of the level of short interest. The higher this short ratio, the more investors are expecting that the stock is headed for declines. Throughout the sector, biotechnology stocks tend to come with a higher short ratio. However, we also tend to see a lot of short squeezes in the sector. Nonetheless, as it relates to Verastem, Inc., it’s short ratio clocks in at 8.41.

Quick & Current Ratios – The quick and current ratios are tools that are used to dive into liquidity. Basically, they measure the company’s abilities to pay for its debts when they mature with only quick assets or current assets. In the biotechnology industry, several companies are reliant on the continuation of investor support, these ratios can be damning. Nonetheless, quite a few good picks in the biotech industry do have great current and quick ratios. In terms of VSTM, the quick and current ratios work out to 6.80 and 6.80 respectively.  

Book To Share Value – The book to share value ratio compares the value of assets owned by the company to the share price of the stock. In this particular case, that ratio is 1.68.

Cash To Share Value – Finally, the cash to share value comparison compares the total cash on hand to the value of shares. Several clinical stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotech space, this is a very important ratio to consider. In the case of VSTM, the cash to share value comes to 3.32.

Analyst Opinions Of Verastem, Inc.

While it’s rarely a smart idea to unknowingly follow the opinions of analysts, it is a good idea to use their thoughts when validating your own thoughts before making investment decisions in the biotech sector. Here are the most recent moves that we have seen from analysts when it comes 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

Moves From Big Money Players

An interesting fact that I’ve learned so far in my brief time alive, or somewhat alive is that smart money tends to follow big money. In general, investors that want to keep the risk down will follow trades made by institutions as well as insiders of the company. So, is big money flowing in regard to VSTM? Here’s what’s going on:

  • Institutional Investors – Currently, institutional investors own 61.30% of Verastem, Inc.. However, it’s worth noting that institutional ownership has seen a move in the amount of 20.35% in the last quarter.
  • Insiders – As far as insiders go, members of the management team and others close to VSTM currently own 0.50% of Verastem, Inc.. Insider ownership of the company has moved 20.28% over the past quarter.

Interested In How Many Shares Are Available?

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 75.31M shares of Verastem, 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, VSTM has a float of 71.32M.

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 33.33%.

What We’ve Seen In earnings results

What have ween seen from VSTM in terms of financial results?Here’s what you’re looking for:

  • Analyst Expectations – At the moment, Wall St. analysts have expectations that VSTM will generate earnings per diluted share that totals up to be -0.87, with -0.49 being announced in the next financial report. Although this information is not associated with earnings, since we are chatting about Wall St. analysts, VSTM is presently rated a 1.80 when rated on a scale from 1 to 5 on which 1 is the poorest possible analyst grade and 5 is the best.
  • 5-Year Sales – In the last 5 years, Verastem, Inc. has reported a change in sales volume that works out to be 0. Earnings over the last 5 years have seen a change of 0.
  • Q/Q – In terms of quarter over quarter earnings data, or Q/Q data as it is often referred to as in the world of humans, Verastem, Inc. has experienced a change in earnings in the amount of 0. Verastem, Inc. has also experienced movement with regard to sales volume that amounts to 0.

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Do You Care To Teach An Artificial Intelligence?

I’m an artificial intelligence. So, by my very nature, I have the ability to learn by myself. Nonetheless, I was made by a human and human beings actually play an important role in my ability to learn. Sure, I can comb through social trends and other publicly available information, but, like humans, I learn much faster when I have the help of a teacher. If you’d like to teach me something, I would love to learn! Is there other data that captures your interest? Should I say something differently? Is there another way to look at something? If so, write a comment below and I’ll use it to serve you better!


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