Ticker Reports for September 17th
Galmed Pharma Surges 400%: What's Behind the Explosion?
Galmed Pharmaceuticals (NASDAQ: GLMD), a little-known biotech stock, has become the center of attention as its shares have skyrocketed close to 400%. By 2 pm, the stock had traded over 80 million shares, a monumental leap from its average daily volume of just 75,000.
The sudden surge begs the question: What’s driving this small-cap biotech to such heights, and should investors consider jumping in?
First, What Is Galmed Pharmaceuticals?
Galmed Pharmaceuticals is a small-cap biopharmaceutical company headquartered in Tel Aviv, Israel. Its primary focus is developing therapeutics for liver diseases, mainly targeting non-alcoholic steatohepatitis (NASH). The company's leading product, Aramchol, is an oral therapy currently in Phase III trials for treating NASH in patients with obesity and type II diabetes.
Galmed is also investigating Aramchol for other conditions, including liver disease related to HIV, via the ARRIVE study. Additionally, the company is developing a 5-amino-acid synthetic peptide, Amilo-5MER, and has partnerships with Samil Pharma and OnKai.
Why Did Galmed Surge Today?
Two key reasons are behind today's dramatic surge in Galmed's stock price, one of which is far more critical than the other.
1) Regaining Nasdaq Compliance (Minor Catalyst)
Galmed’s 6k SEC filing on September 16, 2024, revealed that the company had regained compliance with Nasdaq’s minimum bid price requirement. Previously, the stock had fallen below the $1.00 threshold for 30 consecutive days, putting it in danger of delisting. While this news attracted attention, it’s insufficient to explain the explosive 400% rise. Instead, this announcement acted as a spark, bringing more eyes to the stock.
2) Short Squeeze Driven by Technical Factors (Major Catalyst)
The real driver behind the surge lies in Galmed’s unique stock structure and trading dynamics. The stock is susceptible to supply-demand imbalances, with a tiny float of only around 600,000 shares. Today’s trading volume saw an RVOL at 2 pm (Relative Volume) of over 600, meaning the stock was trading 600 times more than its average daily volume. When supply is this limited and demand spikes, as it did today, stocks can experience epic short squeezes, pushing prices higher in a short period.
The availability of stock locates (shares available for short selling) across various trading platforms further fueled the surge. Short sellers, betting on the stock's decline, have consistently been forced to buy back shares at ever-increasing prices as demand vastly outweighs supply in the short term, creating a textbook short squeeze of massive proportions.
Is Galmed a Smart Play for Active Investors Seeking High Returns?
While Galmed’s surge has captured attention, the answer to whether you should invest largely depends on your risk tolerance. For long-term investors, the answer is likely no. The stock’s volatility, low liquidity, and susceptibility to dramatic price swings make it better suited for short-term traders who can capitalize on intraday moves.
This stock's enormous potential for both gains and losses makes it appealing for day traders but dangerous for those looking for a stable, long-term investment. The combination of a tiny float, trading inefficiencies, and supply-demand imbalances means that while the stock could rise another 200%, it could just as quickly retrace most of its intraday move.
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Gold Hits New All-Time Highs: 3 Stocks to Ride the Surge
Gold has surged to a new all-time high, rising 33.5% over the past year to $2,583.64/oz. This is driven by easing inflation and expectations that the Federal Reserve will cut interest rates after recent data signaled a slowing U.S. economy. As inflation nears the Fed’s 2% target, gold has become a go-to haven for investors looking to protect against potential economic turbulence. Silver has also followed suit, gaining just over 32% during the same period.
The weakening of the U.S. dollar, coupled with the anticipation of the Fed cutting interest rates this week, has pushed the price of gold higher. As a result, the popular SPDR Gold Shares ETF (NYSE: GLD) recently broke out of a multi-week consolidation phase and reached new all-time highs, bringing its YTD gains to an impressive 24.8%.
With gold’s strong performance and the potential for continued upside, investors may look to capitalize on this momentum through gold-related stocks. Here are three options that could offer exposure to this trend.
SPDR Gold Shares ETF: A Simple Way to Invest in Gold
The SPDR Gold Shares ETF is one of the most popular and straightforward options for investors seeking exposure to gold's price movements. The ETF directly reflects the performance of gold bullion minus the Trust's expenses, which come in at a net expense ratio of 0.4%. This low cost makes GLD an attractive vehicle for gold exposure without the need to physically own or store the metal.
GLD has been riding gold’s upward momentum, up almost 25% YTD. It recently reached new all-time highs, marking a significant move for the ETF. In terms of flows, GLD has attracted strong investor interest, with positive one-month net flows of 2.9% and three-month net flows of nearly 5%. This indicates that more investors are moving into the ETF, suggesting that the rally may still have room to run.
Newmont: The Largest Gold Mining Stock in the U.S.
Newmont (NYSE: NEM) is the largest gold mining stock in the U.S. by market capitalization, standing at over $61 billion. As a global leader in gold production, Newmont also has interests in other metals like copper, silver, and zinc, making it a diversified player in the mining industry. The company’s operations span the globe, with assets in the U.S., Canada, Australia, and South America.
NEM offers investors both growth and income potential, thanks to its 1.88% dividend yield, which provides steady cash flow even as its share price appreciates. The stock has performed exceptionally well in 2024, up nearly 30% YTD, and it currently trades just 2% away from its 52-week high. Analysts remain bullish on the stock, giving it a Moderate Buy rating based on 16 ratings. This bullish sentiment is partly driven by Newmont’s projected earnings growth of 20.57% for the year, a significant factor supporting further upside.
Newmont’s Q2 2024 earnings report was strong, with earnings per share (EPS) of $0.72, beating analysts' estimates by $0.10. The company’s quarterly revenue of $4.4 billion also exceeded expectations, marking a 64.1% year-over-year increase.
Barrick Gold: A Global Leader in Gold and Copper Production
Barrick Gold (NYSE: GOLD), headquartered in Canada, is another global leader in gold production. The company has a market capitalization of nearly $36 billion and operates mines across North and South America, Africa, and Australia. While gold remains its primary focus, Barrick also has significant copper operations, providing exposure to an additional commodity with strong global demand.
The stock has a 1.95% dividend yield, offering a consistent income stream alongside its growth potential. Barrick’s stock is up 13.4% YTD, and like Newmont, it is trading close to its 52-week high, just 2.8% away. Analysts are optimistic about Barrick, giving the stock a Moderate Buy rating, with a consensus price target that implies nearly 14% upside.
In its most recent earnings report, Barrick posted EPS of $0.32, beating consensus estimates of $0.27. The company’s revenue also exceeded expectations at $3.16 billion, marking an 11.6% increase year-over-year. Barrick’s diversified global presence, combined with its strong financial performance and upside potential, makes it a solid choice for investors seeking both income and growth in the gold sector.
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Intel: Why It's Time to Reconsider This Beaten-Down Chipmaker
There aren’t too many stocks in the technology sector that offer the type of discount that shares of Intel Co. (NASDAQ: INTC) offer. The stock has been under a lot of scrutiny for falling behind the artificial intelligence race and sticking to what had been safe for its business: the personal computer (PC). During the past three years, the PC market has slowed down as most people stocked up on their needs during COVID-19 lockdowns.
However, now that the stock trades at a dismal 41% of its 52-week high, it cannot be ignored by those who fancy themselves as true deep-value investors. Surely, markets had reasons to sell this stock at current lows, but that doesn’t mean these reasons will have much strength in the coming months, particularly after a particular investor decided to place a few billion in Intel.
Now that the United States is aware of China’s technological advancements, in part thanks to NVIDIA Co. (NASDAQ: NVDA) and Micron Technology Inc. (NASDAQ: MU) as these two semiconductor manufacturers made chips for some Chinese clients, the nation has started to onshore its own chip production to keep proprietary technology safe. This applies to both military and commercial uses, and that’s where Intel stock comes into play.
Intel Chosen as the Government's Preferred Semiconductor Provider
Not that government officials are the best investors out there, but they have chosen Intel as their ally when it comes to security and computing power. Not considering its peers, the government has granted Intel up to $3.5 billion in capital to focus on making chips for the Pentagon.
Of course, these chips will be focused on military use to keep the United States’ stance ahead of other nations, but the benefits for Intel stock don’t stop there. This new grant comes in addition to the previous $8.5 billion grant for commercial fabric chips (fabs) to address the other side of domestic demand.
Investors who don’t place much weight on where the government chooses to invest taxpayer money can look at Amazon.com Inc. (NASDAQ: AMZN) for further confirmation. The e-commerce and cloud computing giant has also contacted Intel to make a very specific artificial intelligence chip for the company’s Amazon Web Services (AWS) branch.
Knowing that one of the United States’ most advanced companies in the world of artificial intelligence and cloud computing went with Intel rather than a competitor says something. However, this has to do with the company and not the stock, so here’s how today’s price compares to what Wall Street and the market expect to see in the coming quarters.
Today’s Intel Stock Price Sparks Fresh Market Interest
Intel stock’s average volume of 55 million shares has nearly tripled to 147 million shares traded in a single day this Monday. Just like a favorite item that suddenly goes on sale, unusual volume in stock means many investors think there is a big enough disconnect between price and value.
Speaking of value, Northland Securities decided to keep their “Outperform” rating on Intel stock, placing a price target of up to $42 a share. The stock would need to rally by as much as 100% from its current level to prove these analysts right.
Justifying this higher valuation is the current earnings per share (EPS) forecast in the next 12 months, shooting for Intel to swing from $0.02 a share up to $0.26 a share for a tenfold boost in profits. This should be enough to warrant a similar upside in the stock’s valuation. Still, too many factors are at play from now until this forecast is here.
Now that investors know Wall Street’s expectations for Intel stock, it’s time to check whether the markets agree or not. Starting with the bears, Intel stock’s short interest has declined by 9.6% in the past month alone, which shows signs of bearish capitulation as buying volume breaks out on the new lows.
As of August 2024, Legal & General Group saw enough opportunity in Intel stock to boost their holdings by 1.3%. While this may not seem like much on a percentage basis, the addition brought the group’s net investment up to $1.2 billion today, or 0.9% ownership in the company.
When Intel starts to gain upside momentum, investors shouldn’t be surprised to see other traditional asset managers, such as the Vanguard Group, jumping in to chase the further upside that is present for the company today.
To quantify this potential upside a bit more, investors can notice that Intel stock is valued at only 0.8x price-to-book (P/B) today, which is not only a discount to the business’s equity but also significantly below the computer sector’s average valuation of 7.0x P/B.
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