Pfenex Inc. (PFNX) Stock: A Good Pick In The Biotechnology Sector? – iWatch Markets

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Pfenex Inc. (PFNX) is working its way for to the top in the market in today’s trading session. The company, focused in the biotechnology sector, is presently priced at $7.24 after a move up of 7.10% so far today. As it relates to biotech companies, there are quite a few factors that have the potential to lead to price movement in the market. News tends to be one of the biggest reasons for the movement. Here are the recent stories centered around PFNX:

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Nonetheless, when making an investing decision, investors should focus on much more than just news, this is especially the case in the generally speculative biotech space. Here’s what’s happing when it comes to Pfenex Inc..

The Performance That We’ve Seen From PFNX

Although a gain in a single session, like the move that we’re seeing from Pfenex Inc. might cause 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 a good idea to look at trends for a period longer than a single trading day. As it relates to PFNX, here are the trends that investors have seen:

  • Past 5 Trading Sessions – Throughout the last five trading sessions, PFNX has seen a change in price amounting to 25.91%.
  • Past Month – The monthly performance from Pfenex Inc. works out to 25.91%.
  • Quarterly – Over the past 3 months, the stock has produced a return of 76.59%
  • Past 6 Months – Over the past 6 months, we have seen a performance of 43.37% from the company.
  • This Year So Far – Since the open of this year PFNX has produced a ROI of 126.96%.
  • Full Year – Finally, in the last full year, we have seen movement of 18.69% from PFNX. Over this period of time, the stock has traded at a high price of -14.00% and a low price of 131.31%.

Ratios Worth Watching

Looking at various ratios having to do with a company can give prospective traders a look of just how risky and/or rewarding a an investment option might be. Below are a few of the key ratios to think about when digging into PFNX.

Short Ratio – The short ratio is a tool that’s used by traders to measure the level of short interest. As the ratio goes higher, it shows that more investors believe that the value of the stock is going to fall. In general, biotechnology stocks tend to carry a higher short ratio. However, we also see a lot of short squeezes in the space. Nonetheless, in regard to Pfenex Inc., it’s short ratio amounts to 2.31.

Quick & Current Ratios – The quick and current ratios are tools that are used to get an idea of the company’s liquidity. Basically, they measure whether or not a company can cover its debts as they mature using current assets or quick assets. In the biotech sector, many companies rely on the continuation of investor support, the current and quick ratios can seem damning. Nonetheless, quite a few good picks in the biotech space come with good quick and current ratios. In terms of PFNX, the quick and current ratios add up to 3.60 and 3.60 respectively.  

Book To Share Value – The book to share value compares the the price of shares to the current book value of assets that are owned by the company. In this particular case, the book to share value ratio equates to 1.94.

Cash To Share Value – The cash to share value comparison compares the total cash on hand to the price of shares. Many early stage biotech companies have a hard time keeping cash on hand. So, if you’re interested in a stock in the biotechnology sector, this is a very important ratio to consider. When it comes to PFNX, the cash to share value comes to 1.94.

Analyst Opinions Of Pfenex Inc.

While it’s not a good idea to blindly follow the opinions of analysts, it is a smart idea to use their analysis when validating your own thoughts before making investment decisions in the biotechnology sector. Below you’ll find the most recent moves that we’ve seen from analysts when it comes to PFNX.

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Aug-09-16 Reiterated Mizuho Buy $22 → $18
May-24-16 Reiterated Barclays Overweight $28 → $14
May-18-15 Initiated Barclays Overweight $28
Feb-17-15 Reiterated Mizuho Buy $12 → $16

Smart Money Follows Big Money

An interesting fact I’ve come to understand in my short period here is that good investors tend to follow big money. In other words, investors that are trying to keep their investments relatively safe will keep an eye on moves made by institutional investors as well as insiders of the company. So, where is the big money when it comes to PFNX? Here’s what’s going on:

Institutions own 81.30% of the company. Institutional interest has moved by -1.64% over the past three months. When it comes to insiders, those who are close to the company currently own 2.14% percent of PFNX shares. Institutions have seen ownership changes of an accumulative 0 over the last three months.

What’s Going On With Share Counts?

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 28.93M shares of Pfenex 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, PFNX has a float of 28.55M.

I also like to follow the short percentage of the float. After all, if a high portion of the float available for trading is sold short, the overall opinion among investors is that the stock is going to lose value. As far as it relates to PFNX, the short percentage of the float totals up to 1.64%. Most investors would say that a concerning short percent of the float would be anything over 40%. Nonetheless, I have seen that a short percent of the float over 26% is generally a play that comes with hefty risk.

What We’ve Seen In earnings results

What have ween seen from PFNX in terms of financial results?Here is the data:

  • Analyst Expectations – Currently, analysts have expectations that Pfenex Inc. will report EPS of -0.39, with -0.28 being reported in the report for the current quarter. Although this data is not associated with earnings, because we’re talking about Wall St. analysts, the stock is currently rated a 0 when rated on a scale from 1 to 5 on which 1 is the poorest possible Wall Street analyst grade and 5 is the best possible.
  • 5-Year Sales – Over the past half decade, Pfenex Inc. has created a change in sales volume that works out to 4.50%. Earnings per diluted share through the last 5 years have generated a change of -29.90%.
  • Q/Q – In terms of quarter over quarter earnings data, or Q/Q data as it is often explained in today’s society, the company has experienced a earnings change by -192.90%. Pfenex Inc. has also experienced movement in terms of sales that comes to a total of -81.00%.

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