Vericel Corporation (VCEL) Stock: A Good Pick In The Biotechnology Industry?

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Vericel Corporation (VCEL) is making a move up in the market today. The company, focused on the biotech industry, is currently trading at $15.84 after heading up 5.53% so far today. As it relates to biotech stocks, there are a number of aspects that have the potential to generate movement in the market. One of the most common is news. Here are the recent trending headlines relating to VCEL:

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May-29-19 07:30AM BARDA to Fund NexoBrid Expanded Access Treatment Protocol for Thermal Burns
May-21-19 01:34AM Edited Transcript of VCEL earnings conference call or presentation 7-May-19 12:00pm GMT
May-15-19 08:00AM Vericel to Present at the 2019 UBS Global Healthcare Conference on Wednesday, May 22, 2019
May-14-19 05:40PM Surgeons to use product from Cambridge’s Vericel on baby born without skin
May-09-19 11:30AM Were Hedge Funds Right About Dumping Vericel Corp (VCEL) ?

However, any time investors are making a decision to invest, investors should focus on far more than news, especially in the speculative biotechnology space. Here’s what’s happing when it comes to Vericel Corporation.

How VCEL Has Been Trending

Although a move up on a single session, like the gain that we’re seeing from Vericel Corporation may lead to excitement in some investors, a single session move by itself 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 experienced by the stock just a single session. In the case of VCEL, here are the returns that investors have experienced:

  • Past 5 Sessions – In the past 7 days, VCEL has seen a price change that amounts to -3.88%.
  • Past 30 Days – The return on investment from Vericel Corporation throughout the last 30 days works out to -5.15%.
  • Past 3 Months – In the last quarter, the stock has generated a ROI that works out to -20.04%
  • Past 6 Months – In the past six months, investors have seen a performance of -9.69% from the stock.
  • This Year So Far – Since the open of this year VCEL has produced a ROI of -8.97%.
  • Annually – Lastly, over the last year, we’ve seen movement amounting to 16.90% out of VCEL. In this period, the stock has sold at a high of -24.59% and a low of 76.98%.

Key Ratios

Looking at various ratios associated with a company can provide prospective traders a look of how dangerous and/or potentially profitable a an investment option may be. Here are some of the key ratios to look at when looking at VCEL.

Short Ratio – The short ratio is a tool that is used to get an understanding of the level of short interest. As the short ratio goes higher, it means that more investors have a belief that the price of the stock is headed for declines. In general, biotechnology stocks can carry a higher short ratio. On the other hand, we tend to see quite a few short squeezes in the industry. Nonetheless, as it relates to Vericel Corporation, it’s short ratio is 9.50.

Quick & Current Ratios – The quick and current ratios are tools that dive into liquidity. Essentially, they measure the company’s abilities to pay its debts when they mature using quick assets or current assets. In the biotechnology space, many companies rely on the continuation of investor support, the quick and current ratios can look damning. Nonetheless, several gems in the biotech sector come with good current and quick ratios. As it relates to VCEL, the quick and current ratios total up to 8.20 and 8.50 respectively.  

Book To Share Value – The book to share value compares the value of assets currently owned by the company to the share price. In this particular case, the book to share value ratio equates to 2.36.

Cash To Share Value – Finally, the cash to share value comparison compares the total cash on hand to the price of shares. Several early stage biotech companies have a hard time keeping cash on hand. So, when investing in the biotechnology sector, this is a very important ratio to consider. When it comes to VCEL, the cash to share value comes to 1.98.

How Analysts Feel About Vericel Corporation

Although it’s never a good idea to avoid doing your DD and blindly following the thoughts of analysts, it is a smart idea to consider their thoughts when validating your own before making an investment decision in the biotechnology industry. Here are the recent moves that we’ve seen from analysts with regard to VCEL.

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Feb-28-19 Downgrade Needham Buy → Hold
Aug-08-18 Reiterated Needham Buy $15 → $14
Jul-16-18 Upgrade Ladenburg Thalmann Neutral → Buy
Apr-04-18 Initiated Leerink Partners Outperform $15
Mar-06-18 Reiterated Needham Buy $5 → $15

Show Me 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 VCEL, here’s what we’re seeing:

  • Institutional Investors – Currently, institutional investors hold 85.60% of Vericel Corporation. On the other hand, it is worth considering that the ownership held by institutions has seen a move of 2.64% in the past 3 months.
  • Investors On The Inside – As far as insiders go, members of the management team and others close to VCEL currently hold 0.70% of the company. Insider ownership of the company has changed in the amount of -26.41% over the past 3 months.

What’s Going On With 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 42.52M shares of Vericel Corporation 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, VCEL has a float of 42.30M.

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 VCEL, the short percent of the float is 12.87%.

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 $0.28. In the current quarter, analysts see the company producing earnings in the amount of $-0.36. Over the last 5 years, VCEL has generated revenue in the amount of $444.40% with earnings coming in at 50.70%. On a quarter over quarter basis, earnings have seen movement of 69.30% and revenue has seen movement of 21.10%.

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