Ardelyx, Inc. (ARDX) Stock: A Good Pick In The Biotech Space?

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Ardelyx, Inc. (ARDX) is trending up in the market in today’s trading session. The company, focused on the biotech sector, is presently priced at $5.91 after heading up -2.20% so far in today’s session. When it comes to biotech stocks, there are quite a few 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 trending headlines associated with ARDX:

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Sep-04-19 04:42PM Biotech Stock On The Radar: Ardelyx Gears Up For FDA Decision Day
12:07PM A Look At Benzinga Pro’s Most-Searched Tickers For September 4, 2019
12:00PM Why Ardelyx Shares Are Sinking Today
10:31AM Ardelyx (ARDX) Gains on Tenapanor’s Success in Pivotal Study
10:02AM Biotech Stock Roundup: REGN Wins Against AMGN, VRTX to Acquire Semma & More

However, when making a decision to invest, investors should look into far more than just news, especially in the speculative biotechnology industry. Here’s what’s happing when it comes to Ardelyx, Inc..

Recent Movement From ARDX

Although a move toward the top in a single session, like the move that we’re seeing from Ardelyx, Inc. may lead to excitement in some investors, a single session move by itself shouldn’t be the basis of a decision to, or not to, invest in a company. It is always smart to look at trends beyond a single trading session. As it relates to ARDX, below are the returns that investors have seen:

  • Past 5 Sessions – Over the past seven days, ARDX has produced a change in price that amounts to 3.78%.
  • Monthly – The return on investment from Ardelyx, Inc. throughout the past month comes to 164.91%.
  • Past Quarter – Over the last three months, the stock has produced a return on investment that comes to 130.53%
  • Past 6 Months – Throughout the last six months, investors have seen a change that equates to 85.28% from the stock.
  • YTD – Since the close of last year ARDX has produced a ROI of 237.43%.
  • Full Year – Finally, in the last full year, we’ve seen movement of 55.87% out of ARDX. Over this period, the stock has sold at a high price of -3.95% and a low price of 269.19%.

Ratios Worth Paying Attention To

Looking at various key ratios associated with a stock can give traders a look of how dangerous and/or rewarding a stock pick might be. Below are some of the key ratios to consider when looking at ARDX.

Short Ratio – The short ratio is a measure of short interest. The higher this short ratio, the more investors have a belief that the value of the stock is going to go down. In general, biotech 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 Ardelyx, Inc., it’s short ratio is 0.53.

Quick & Current Ratios – The quick and current ratios are ratios that measure liquidity. Basically, they measure whether or not a company can pay its debts when they mature using quick assets or current assets. In the biotechnology space, companies rely heavily on the continuation of investor support, the quick and current ratios can seem bad. However, some better companies in the biotech sector come with strong quick and current ratios. In terms of ARDX, the quick and current ratios add up to 7.80 and 7.80 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, that ratio is 1.10.

Cash To Share Value – The cash to share value ratio compares the total cash on hand to the price of shares. Several clinical stage biotech companies struggle to keep cash on hand. So, if you’re looking into a stock in the biotech space, this is a very important ratio to look into. In this case, the cash to share value ratio comes to 1.92.

Analyst Opinions Of Ardelyx, Inc.

Although it’s not a smart idea to avoid doing your DD and blindly following the thoughts of analysts, it is a smart idea to consider their opinions when validating your own before making investment decisions in the biotech sector. Below are the recent moves that we have seen from analysts when it comes to ARDX.

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Apr-08-19 Initiated Piper Jaffray Overweight $15
Aug-24-18 Initiated Jefferies Buy $7
Mar-19-18 Resumed Leerink Partners Outperform $13
Nov-29-17 Reiterated Citigroup Buy $16 → $17
Nov-22-17 Reiterated Ladenburg Thalmann Buy $19 → $16

Smart Money Follows 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 ARDX, here’s what we’re seeing:

Institutions own 81.60% of the company. Institutional interest has moved by -0.83% over the past three months. When it comes to insiders, those who are close to the company currently own 1.50% percent of ARDX shares. Institutions have seen ownership changes of an accumulative -2.40% over the last three months.

Float Information

Investors tend to like to know the total numbers of shares both available and outstanding. As far as Ardelyx, Inc., currently there are 64.60M and there is a float of 62.23M. These data mean that out of the total of 64.60M shares of ARDX that are out there today, 62.23M are able to trade hands by the public.

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 ARDX, the short percent of the float is 0.63%.

What We’ve Seen In earnings results

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-1.20. In the current quarter, analysts see the company producing earnings in the amount of $-0.37. Over the last 5 years, ARDX has generated revenue in the amount of $-38.20% with earnings coming in at -33.60%. On a quarter over quarter basis, earnings have seen movement of 3.70% and revenue has seen movement of -40.00%.

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