Otonomy, Inc. (OTIC) Stock: A Good Pick In The Biotech Sector?

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Otonomy, Inc. (OTIC) is working its way for to the bottom in the market in today’s trading session. The stock, focused in the biotechnology industry, is presently priced at $2.16 after a move down of -7.30% so far in today’s session. When it comes to biotechnology companies, there are several factors that have the ability to cause price movement in the market. One of the most common is news. Here are the recent trending headlines centered around OTIC:

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Oct-01-19 07:30AM AGTC and Otonomy Announce Strategic Collaboration to Develop and Commercialize Gene Therapy for Congenital Hearing Loss
Sep-26-19 04:05PM Otonomy to Present at the Cantor Global Healthcare Conference
Sep-17-19 07:30AM Otonomy Initiating Phase 1/2 Clinical Trial of OTO-413 in Hearing Loss
Aug-27-19 07:10AM Edited Transcript of OTIC earnings conference call or presentation 1-Aug-19 8:30pm GMT
Aug-01-19 04:20PM Otonomy Reports Second Quarter 2019 Financial Results and Provides Corporate Update

However, when making an investing decision, prospective investors should take a look at much more than just news, especially in the highly speculative biotechnology industry. Here’s what’s happening in regard to Otonomy, Inc..

Recent Movement Out of OTIC

Although a move down on a single session, like what we’re seeing from Otonomy, Inc. might lead to fear in some investors, that alone shouldn’t be the basis of a decision to, or not to, invest in a company. It is always smart to look into trends just a single session. In the case of OTIC, below are the returns that we’ve seen:

  • Past 7 Days – Over the last seven days, OTIC has seen a change in value in the amount of -0.92%.
  • Monthly – The return on investment from Otonomy, Inc. in the last month works out to 0.47%.
  • Past 3 Months – Over the past 3 months, the company has generated a return that works out to -14.29%
  • Past 6 Months – Over the past 6 months, investors have seen a performance that equates to -23.13% from the stock.
  • YTD – Since the open of this year OTIC has generated a ROI of 16.76%.
  • Full Year – Finally, over the last full year, we have seen performance that works out to -18.49% out of OTIC. Over this period of time, the stock has traded at a high of -31.54% and a low of 44.00%.

Key Ratios

Digging into various key ratios having to do with a company generally gives investors an understanding of just how risky and/or potentially profitable a an investment option might be. Here are a few of the key ratios to think about when digging into OTIC.

Short Ratio – The short ratio is a measure of short interest. As the short ratio goes higher, it means that more investors are expecting that the stock is going to fall. Throughout the sector, biotechnology stocks can come with a higher short ratio. However, we also tend to see a lot of short squeezes in the space. Nonetheless, when it comes to Otonomy, Inc., the stock’s short ratio clocks in at 1.79.

Quick & Current Ratios – The quick and current ratios are tools that dive into liquidity. Essentially, they measure whether or not a company can pay its debts when they come due based on quick assets or current assets. Because many biotech many companies rely heavily on continued support from investors, the current and quick ratios can look upsetting. Nonetheless, some better companies in the biotech industry do have strong quick and current ratios. When it comes to OTIC, the quick and current ratios come to 0 and 7.30 respectively.  

Book To Share Value – The book to share value compares the book value of assets currently owned by the company to the price of shares. In this case, that ratio equates to 1.92.

Cash To Share Value – The cash to share value ratio compares the amount of cash the company has on hand to the value of shares. Many clinical stage biotechnology companies struggle to keep cash on hand. So, when investing in the biotechnology space, this is a very important ratio to look into. In this case, the cash to share value is 2.52.

How Analysts Feel About Otonomy, Inc.

While it’s rarely a smart idea to unknowingly follow the thoughts of analysts, it is a good idea to consider their analysis in order to validate your own opinions when it comes to making investment decisions in the biotechnology space. Below are the most recent moves that we’ve seen from analysts as it relates to OTIC.

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Mar-19-18 Downgrade JP Morgan Neutral → Underweight
Mar-12-18 Upgrade Piper Jaffray Neutral → Overweight
Aug-30-17 Downgrade Piper Jaffray Overweight → Neutral
Aug-30-17 Downgrade JP Morgan Overweight → Neutral
Aug-15-17 Upgrade JP Morgan Neutral → Overweight

What Are Big Money Players Doing With Otonomy, Inc.

One thing that I’ve come to understand so far in my brief time on Earth has been that smart investors tend to follow the moves made by big money players. In general, investors that are trying to keep their investments relatively safe will keep an eye on trades made by institutions as well as those on the inside. So, is big money flowing as it relates to OTIC? Here’s the scoop:

  • Institutions – Currently, institutions hold 61.10% of OTIC. On the other hand, it is worth noting that institutional ownership has changed in the amount of -0.11% in the past quarter.
  • Insiders – When it comes to insiders, those close to the situation currently own 0.28% of Otonomy, Inc.. Insider ownership of the company has seen a move of 0.00% in the past quarter.

Float Information

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 31.16M shares of Otonomy, 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, OTIC has a float of 28.48M.

I also find it important to take a look at the short float. Think about it, when a high portion of the float is sold short, the overall feeling among investors is that the stock is headed for a deep dive. As far as it relates to OTIC, the percentage of the float that is sold short comes to a total of 0.30%. Most investors would say that a high short percent of the float is anything over 40%. However, I have calculated that a short percent of the float over 26% is probably going to be a a play that could prove to be very risky.

Earnings

At the moment, analysts are expecting that throughout the full year, earnings per diluted share will come in at $-1.48. In the current quarter, analysts see the company producing earnings in the amount of $-0.45. Over the last 5 years, OTIC has generated revenue in the amount of $0 with earnings coming in at -9.70%. On a quarter over quarter basis, earnings have seen movement of 13.80% and revenue has seen movement of 100.00%.

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