Alkermes plc (ALKS) Stock: Is This Biotechnology Stock Worth Your Consideration?


Alkermes plc (ALKS) is gaining in the market today. The stock, one that is focused in the biotechnology industry, is currently priced at $22.87 after climbing 5.29% so far in today’s session. As it relates to biotechnology companies, there are quite a few factors that have the ability to generate gains in the market. One of the most common is news. Here are the most recent stories relating to ALKS:

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Aug-02-19 10:04AM Clovis (CLVS) Q2 Earnings & Sales Lag Estimates, Shares Down
Jul-31-19 11:36AM Biotech Stock Roundup: Celgene, Amgen, Gilead Impress in Q2, Other Pipeline Updates
Jul-30-19 03:05PM Biogen Hedged Its Bet and Won Big
07:30AM Diroximel Fumarate Demonstrated Significantly Improved Gastrointestinal Tolerability Profile Compared to Dimethyl Fumarate in Patients with Multiple Sclerosis
07:30AM Diroximel Fumarate Demonstrated Significantly Improved Gastrointestinal Tolerability Profile Compared to Dimethyl Fumarate in Patients with Multiple Sclerosis

However, when making a decision to invest, prospective investors should look at far more than news, this is especially the case in the highly speculative biotech space. Here’s what’s going on with Alkermes plc.

The Performance That ALKS Investors Have Experienced

Although a move up on a single session, like what we’re seeing from Alkermes plc may make some investors excited, a single session gain by itself should not be the reason for a decision to, or not to, invest in a company. It’s generally a good idea to take a look at trends experienced by the stock further out than a single trading session. As it relates to ALKS, below are the trends that investors have seen:

  • Past 5 Trading Sessions – In the past week, ALKS has produced a price change in the amount of -0.57%.
  • Monthly – The return on investment from Alkermes plc throughout the past month works out to -0.82%.
  • Past Quarter – Over the last three months, the company has generated a return on investment of -14.76%
  • Past 6 Months – Over the last six months, we’ve seen a change that equates to -26.39% from the company.
  • YTD – Since the open of this year ALKS has produced a return of -22.50%.
  • Annually – Lastly, over the last year, we have seen movement in the amount of -49.21% from ALKS. In this period, the stock has sold at a high price of -51.32% and a low price of 15.21%.

Key Ratios

Digging into a few ratios having to do with a company generally gives investors a view of just how risky and/or potentially profitable a an investment option might be. Below are a few of the important ratios to look at when looking at ALKS.

Short Ratio – The short ratio is a measure of short interest. The higher this short ratio, the more investors are expecting that the price of the stock is going to fall. Throughout the sector, biotech stocks tend to have a higher short ratio. On the other hand, we tend to see a lot of short squeezes in the space. Nonetheless, when it comes to Alkermes plc, it’s short ratio comes to 3.57.

Quick & Current Ratios – The quick and current ratios are tools that are used to get an idea of the company’s liquidity. Essentially, they measure the company’s abilities to pay for its debts when they mature with only quick assets or current assets. In the biotech sector, several companies are heavily reliant on continued support from investors, the current and quick ratios can look bad. However, several gems in the biotechnology sector do have strong quick and current ratios. As it relates to ALKS, the quick and current ratios work out to 2.70 and 3.00 respectively.  

Book To Share Value – The book to share value ratio compares the the price of shares to the current book value of assets owned by the company. as it relates to Alkermes plc, the book to share value ratio is 6.95.

Cash To Share Value – The cash to share value ratio compares the amount of cash the company has on hand to the value of the company’s stock. Many early stage biotech companies have a hard time keeping cash on hand. So, if you’re interested in a biotechnology stock, this is an important ratio to think about. In this case, the cash to share value works out to 3.52.

How Analysts Feel About Alkermes plc

While it’s rarely a smart idea to avoid doing your DD and blindly following the opinions of analysts, it is a smart idea to use their analysis in order to validate your own thoughts before making an investment decision in the biotechnology space. Below you’ll find the recent moves that we’ve seen from analysts when it comes to ALKS.

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Jul-15-19 Upgrade Goldman Sell → Neutral
May-31-19 Initiated H.C. Wainwright Neutral
May-01-19 Downgrade Citigroup Buy → Neutral
Dec-19-18 Downgrade Goldman Neutral → Sell
Dec-14-18 Initiated Wolfe Research Underperform

Is Big Money Interested In Alkermes plc

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 ALKS, here’s what we’re seeing:

Institutions own 97.80% of the company. Institutional interest has moved by -1.15% over the past three months. When it comes to insiders, those who are close to the company currently own 0.70% percent of ALKS shares. Institutions have seen ownership changes of an accumulative -20.25% over the last three months.

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 162.06M shares of Alkermes 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, ALKS has a float of 155.63M.

I also like to take a look at the short float. After all, if a large portion of the float available for trading is shorted, the overall opinion in the market is that the stock is going to fall. With regard to ALKS, the percentage of the float that is shorted is 3.37%. Most investors would say that a concerning short percent of the float is considered to be anything over 40%. Nonetheless, I’ve found that a short percent of the float over 26% is generally a play that comes with hefty risk.

Financial Results And Expectations

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-0.15. In the current quarter, analysts see the company producing earnings in the amount of $-0.19. Over the last 5 years, ALKS has generated revenue in the amount of $20.40% with earnings coming in at -56.50%. On a quarter over quarter basis, earnings have seen movement of -27.10% and revenue has seen movement of -8.10%.

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