Ticker Reports for November 9th
How Altimmune Could Grab a Big Chunk of the GLP-1 Market
As pharma giants Eli Lilly (NYSE: LLY) and Novo Nordisk (NYSE: NVO) are raking in the cash from their weight loss and diabetes drugs, many other companies want a piece of the pie. They’re developing treatments to improve upon the deficiencies of Lilly and Novo’s drugs.
One company to keep an eye on in this space is Altimmune (NASDAQ: ALT). But what makes Altimmune's drug different from existing drugs, and what kind of market opportunity does it have?
Altimmune's leading drug candidate is pemvidutide. The drug is being studied for two conditions: obesity and metabolic dysfunction-associated steatohepatitis (MASH). MASH is a severe liver disease that is often associated with obesity. However, I'll focus my analysis on pemvidutide’s prospects in the overall obesity market.
Pemvidutide Looks to Solve a Key GLP-1 Problem: Muscle Loss
One of the main value adds that Altimmune is trying to provide over what is currently available with pemvidutide is the preservation of lean muscle mass. In general, when losing weight, people often lose both fat and muscle. However, it seems this happens disproportionately when weight loss comes from calorie restriction. This is the method GLP-1s allow through appetite reduction.
An excessive reduction in lean body mass can cause adverse effects such as a decline in metabolic health, as well as bone density loss. This can lead to sarcopenia, which increases the risk of bone fractures. It is especially concerning in older individuals, as bone density also naturally falls with age. Compared to men, women over the age of 50 are four times as likely to suffer from osteoporosis, which regularly occurs simultaneously with sarcopenia. This leaves them particularly at risk of the adverse effects of a reduction in lean muscle mass that GLP-1’s can exacerbate. Women nearing or over 50 could likely benefit the most from weight loss drugs that minimize lean muscle mass loss.
A Big Portion of GLP-1 Users Could Potentially Benefit
Data from Blue Cross Blue Shield shows that 80% of patients who took GLP-1s for weight management from 2013 to 2024 were women. Additionally, nearly 84% of all patients were 35 or older. Those between the ages of 55 and 65 also significantly outnumbered those aged 18 to 34. National Center for Health Statistics data shows that people over 40 suffer obesity at higher rates than those between the ages of 20 and 39.
Given that GLP-1 users skew over 35 years or older and are the majority women, it's reasonable to assume that a very significant number of GLP-1 patients are women 50 or older.
To me, this signals that a company like Altimmune could be set up very nicely to capitalize on this large customer base that could benefit most from its products. Additionally, the market isn’t just confined to women over 50, the drug could benefit other patients too. However, this assumes it works better than the competition.
Analyzing Pemvidutide’s Clinical Results Versus Lilly and Novo’s Blockbusters
So, how do pemvidutide’s lean muscle loss and overall weight loss results stack up with those of available medications? Healthcare provider Baton Rouge General cites two different studies relating to lean muscle mass loss. With semaglutide, the clinical name for Novo Nordisk’s Wegovy and Ozempic, 39% of the weight patients lost was lean muscle. For tirzepatide, the clinical name for Eli Lilly’s Mounjaro and Zepbound, the number dropped to 25%. Pemvidutide’s latest results show improvement over those figures, at just 22%. The company described this as “class-leading." Additionally, when looking at patients over 60, the number dropped to 20%. This is a particularly impressive signal that could lead doctors to prescribe the drug to older individuals over current treatments.
It induced an average overall weight loss of 15.6% over 48 weeks, similar to what semaglutide achieved. However, it falls short of tirzepatide, which showed an average weight loss of +20% over the same period.
In my mind, these results and the large potential market opportunity for pemvidutide make Altimmune a key company to watch in the weight loss drug market. Altimmune has successfully completed Phase 2 trials for pemvidutide in obesity and received FDA approval to proceed with Phase 3 trials. While still a high-risk investment, the advancement to Phase 3 suggests strong potential; if pemvidutide passes this final stage and gains full FDA approval, Altimmune could have a major revenue driver on its hands. Currently, Wall Street is projecting a 157% upside in the stock on average.
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Louis Navellier sees unexpected opportunities for AI under Trump's policies.
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Here's Why Etsy Management Is Investing $1 Billion in Buybacks
When investors think of how they will eventually get their returns from a stock investment, they typically relate to the classic “Buy low, sell high” strategy. Another common way of looking at this is through dividend payouts, as the quarterly (sometimes monthly) income gives shareholders a sense of comfort and achievement.
However, dividends are paid with company profits, which are taxed at the business’s corporate tax level. Investors then pay a second tax layer on their dividend income, which few might consider when investing in dividend stocks. Thus, dividend stocks may not be an efficient choice from a tax perspective.
Stock buybacks, on the other hand, let investors boost their ownership in a company at no extra cost, which also boosts their long-term returns while eliminating the additional tax layer. This is why investors should pay attention to the $1 billion stock buyback program now approved for Etsy Inc. (NASDAQ: ETSY). Here are some reasons insiders think the stock is cheap enough to buy today.
Wall Street and the Market Know Etsy Stock’s Value Is Much Higher
Even though the stock has sold off to a mere 59% of its 52-week high, the bearish momentum failed to scare Wall Street analysts away. Investors need to keep in mind that analysts will very rarely risk their necks (and reputations) on a stock, so being bullish on a beaten-down stock means a lot more today.
Those at Truist Financial particularly see a $70 price target for Etsy stock today and a Buy rating. This valuation would call for a net upside of 32% from where the company trades today, not to mention making a new high after trading in a channel for the past month.
The earnings per share (EPS) growth forecast backs these valuations. It has Etsy reporting up to $0.54 in earnings over the next 12 months, compared to today’s quarterly $0.45. This jump of 20% justifies double-digit rallies in the stock’s price, if not more.
Then there’s the institutional buying. ICICI Prudential Asset Management decided to boost their holdings in Etsy stock by as much as 7.8% as of November 2024. This new allocation brought their net position to a high of $8.4 million today, showing further bullish sentiment on Etsy stock right now.
Why Etsy Stock Commands a Premium in Today’s Market
On a price-to-earnings (P/E) basis, Etsy stock commands a significant premium to the rest of the business services sector. By trading at a rich 27.3x P/E multiple today, Etsy stock calls for a 40% premium compared to the business services sector’s 19.5x average P/E valuation.
Some investors would see this as expensive and potentially overextended. However, there are always good and justifiable reasons for a stock to command a premium to the rest of its peer group. Investors can already justify some of these reasons through analyst sentiment and institutional buying.
Another, probably less known, reason for management to be bullish on their own stock is found in the company’s financials. The latest quarterly earnings results show an essential divergence between reported net income and operating cash flows.
Whenever these two diverge, especially in favor of operating cash flows, it typically means the actual earning power of the business in question was much better than what a lower net income would suggest. This is the case for Etsy today, as the company reported only $173.3 million of net income, a decline of 23% from the $224.3 million generated over the same quarter last year.
Then, investors can see that Etsy reported up to $437.5 million in operating cash flows. This figure is not only much bigger than net income but also a wide improvement from the $410.4 million reported a year ago. A jump of 6.6% over the year in true earning power doesn’t justify the company's being down to only 59% of its 52-week high.
Analysts know this, which is also why management approved allocating up to $1 billion to buy back shares of the stock today. When it comes to volume, Etsy also slowly but surely shows further interest from the broader market.
Etsy saw up to 4.3 million shares traded on the day after the election, while its average volume is a lower 3.7 million; considering the stock edged higher that same day, it would be safe for investors to assume that this spike in volume came from other willing buyers in the market.
Tim Sykes' Urgent Trade Alert: "Make this move now"
WARNING: 80 Wall Street banks are gearing up for MASSIVE D.C. shock
This $2 trillion D.C. shock is NOT about Trump or Biden dropping out of the race…
3 Stocks Poised to Ride America's Manufacturing and Ag Revival
With the United States election over, investors are left figuring out which stocks and sectors they should invest in for the coming months. Most of the interest and capital are focused on the technology sector as momentum chasers step on the gas; however, a new trend is about to flip the script.
This trend creates new upside potential for the United States economy in the domestic manufacturing sector, which is an underlying proposal from the new administration. Investors must understand that the market is already behaving as if this were a reality today.
Price action in basic materials stocks like United States Steel Co. (NYSE: X), whose shares rallied by over 8% the morning after the election, reveals the next step. This next step will include agricultural and manufacturing stocks, which have been sitting on the sidelines, such as Deere & Co. (NYSE: DE), Mosaic Co. (NYSE: MOS), and CF Industries Co. (NYSE: CF).
Why Short Sellers Are Running From Deere Stock Today
Over the past month, short interest in Deere stock declined by over 11.2%, showing investors enough signs of bearish capitulation to consider a bullish case of their own. Now, to replace these short sellers, new institutional buyers have flooded the scene to help Deere stock’s renewed upside.
Leading the way recently were those at KBC Group, who boosted their position in Deere stock by as much as 10.9% as of early November 2024. This new allocation brought their holdings in the company up to $42.5 million today, and the timing of the transaction begs the question of whether the evidence for a rally was more apparent today than ever.
Wall Street analysts, particularly those at Truist Financial, might be able to answer that question. After reiterating their Buy rating, these analysts also pushed valuations for Deere stock as high as $496 a share, a significant boost from their previous $443 price target.
To prove these new views right, the stock would have to rally by as much as 23% from where it trades today, not to mention get to a new high for the year. This would add further pressure for the bears to close their short positions and further buying pressure on the company.
Analysts Forecast Strong Double-Digit Gains for Mosaic Stock
Fertilizer and chemical stocks have underperformed as the domestic manufacturing and agricultural cycle has declined. However, after a 15.5% decline for the past 12 months, Mosaic stock faces new double-digit upside projections from Wall Street analysts today.
The company's high valuation range is set at $48 a share, calling for up to 74% upside from today’s price to show significant outperformance potential compared to other propositions in this new cycle. According to Mosaic’s latest investor presentation, a catalyst might already be underway to bring investors closer to these price targets.
The price of fertilizers and other chemicals is now at its cyclical lows, while demand in Asia and South America is beginning to tick up higher. With low prices, the supply hasn’t been expanding as producers have no incentive to profit, which creates a double tailwind for Mosaic’s margins in the coming months.
Even if this trend takes a little longer to play out, Mosaic shareholders can count on the company’s $0.84 a share payout, which calls for a dividend yield of up to 3% today. While enough to beat inflation, the dividend is not a factor investors should focus so much on; rather, they should look at the new institutional buying activity.
Particularly noteworthy are the new buys from Versor Investments, which more than tripled as of November 2024 to reach a high of $2.3 million. That new allocation is a drop in the bucket, though, as up to $1.3 billion of institutional capital made its way into Mosaic stock over the past 12 months.
CF Industries Stock Primed for a New Rally, Here’s Why
If Mosaic is right about its projections for crop and fertilizer demand in the coming quarters, then CF Industries stock will likely see a spillover effect from the tailwind, and Wall Street analysts are willing to bet on this.
Investors can see this through the bold projections made by the Royal Bank of Canada, where analysts not only reiterated their Outperform rating on CF Industries stock but also boosted their price targets to a high of $100 a share. This new view suggests the stock has enough room to deliver a rally of up to 21% from today’s price.
Being in front of a potential double-digit rally sent some bearish traders home. CF Industries stock’s short interest collapsed by over 23% in the past month alone, amplifying a quarterly downtrend. As is apparently common in all of these names, institutions also found enough reasons to start buying the stock recently.
Buyers from International Assets Investment Management decided to boost their exposure in CF Industries stock to $375.4 million today, making them one of the biggest institutional holders of this agricultural stock betting on the new price rally.
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