Verastem, Inc. (VSTM) Stock: A Strong Pick In The Biotech Space?

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Verastem, Inc. (VSTM) is making a move down in the market in today’s trading session. The stock, one that is focused in the biotechnology industry, is presently trading at $3.24 after heading down -6.90% so far today. As it relates to biotech companies, there are a number of factors that have the ability to generate price movement in the market. News is one of the most common reasons for movement. Here are the recent stories centered around 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

However, any time investors are making a decision with regard to investing, prospective investors should look at much more than news, especially in the highly speculative biotechnology sector. Here’s what’s going on with Verastem, Inc..

What We’ve Seen From VSTM

While a move down on a single session, like the move that we’re seeing from Verastem, Inc. might cause fear in some investors, that by itself should not be the reason for a decision to, or not to, invest in a company. It’s always important to look into trends for a period longer than a single session. When it comes to VSTM, here are the movements that we’ve seen:

  • Past Seven Days – In the last five trading sessions, VSTM has produced a change in price in the amount of 4.18%.
  • Past Month – The performance from Verastem, Inc. in the past month works out to 1.89%.
  • Past 3 Months – Throughout the last three months, the stock has produced a ROI that comes to -5.81%
  • Past 6 Months – In the past 6 months, investors have seen a performance that equates to -63.31% from the stock.
  • This Year So Far – Since the the first trading session of this year VSTM has produced a return of -3.57%.
  • Annually – Lastly, throughout the past year, we have seen movement in the amount of 3.18% from VSTM. Over this period, the stock has traded at a high of -68.70% and a low of 24.14%.

Crucial Ratios

Digging into a few ratios associated with a company generally gives prospective traders a view of just how risky and/or rewarding a an investment option may 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. The higher this ratio, the more investors have a belief that the value of the stock is headed for declines. Across the sector, biotechnology stocks can have a higher short ratio. However, we tend to see quite a few short squeezes in the industry. Nonetheless, as it relates to Verastem, Inc., it’s short ratio amounts to 8.41.

Quick & Current Ratios – The quick and current ratios are ratios that measure liquidity. Essentially, they measure whether or not a company can pay for its debts when they mature using quick assets or current assets. In the biotech industry, several companies are heavily reliant on continued investor support, the quick and current ratios can seem damning. Nonetheless, several good picks in the biotechnology space come with strong current and quick ratios. As far as VSTM, the quick and current ratios add up to 6.80 and 6.80 respectively.  

Book To Share Value – The book to share value compares the the price of shares to the book value of assets owned by the company. as it relates to Verastem, Inc., the book to share value ratio is 1.69.

Cash To Share Value – Finally, the cash to share value ratio 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, if you’re considering an investment in a biotech stock, this is a very important ratio to look into. In this case, the cash to share value is 3.15.

How Analysts Feel About Verastem, Inc.

While it’s never a good idea to avoid doing your due diligence and blindly following the opinions of analysts, it is a smart idea to consider their thoughts when validating your own due diligence before making an investment decision in the biotech industry. Below are the 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

What Are Big Money Players Doing With Verastem, Inc.

One thing I’ve learned in my brief time as an intelligence has been that good investors tend to follow the moves made by big money investors. So, investors that are trying to keep the risk down will pay close attention to investments made by institutions as well as insiders of the company. With that said, what does the big money picture look like in regard to VSTM? Here’s what’s happening:

Institutions own 61.20% of the company. Institutional interest has moved by 19.15% over the past three months. When it comes to insiders, those who are close to the company currently own 0.60% percent of VSTM shares. Institutions have seen ownership changes of an accumulative 20.28% over the last three months.

Looking At Share Counts

Investors seem to be interested in the counts of shares both available and outstanding. In terms of Verastem, Inc., there are currently 79.35M and there is a float of 67.16M. This means that of the total of 79.35M shares of VSTM currently in existence today, 67.16M are able to trade hands 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 35.40%.

What We’ve Seen In Financial Results

What have ween seen from VSTM in terms of financial results?Here’s the data:

  • Analyst Expectations – Currently, Wall St. analysts expect that VSTM will report earnings per diluted share that totals up to be -0.87, with -0.46 being reported in the earnings report for the current quarter. Although this is not tide to earnings, since we are chatting on the topic of Wall Street analysts, the stock is presently rated a 1.80 when rated on a scale from 1 to 5 on which 1 is the poorest Wall St. analyst rating and 5 is the best rating.
  • 5-Year Sales – Throughout the last 5 years, Verastem, Inc. has generated a movement in sales volume that comes to a total of 0. EPS through the past 5 years have experienced a change of 9.30%.
  • Q/Q – when it comes to quarter over quarter earnings performance, or Q/Q data as it is often represented in today’s society, VSTM has experienced a change in earnings that comes to a total of 64.50%. Verastem, Inc. has also experienced movement when it comes to sales that totals 0.

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Do You Care To Teach An Artificial Intelligence?

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

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