This is a high risk knife catching play in Fortress Biotech (FBIO). You’ve heard the old worn out cliche never try and catch a falling knife. If that cliche was always true, we would all be billionaires by now because we would just short anything falling with the idea that it would continue to fall. Sometimes I think institutional traders put that old cliche into the public’s mind and that the time to buy is on a candle over candle reversal so that they can position before us. The truth of the matter is that a stock chart is not a knife and you have no idea when a wave of buying could hit that will power a stock higher.
Fortress Biotech is developing CNDO-109, a lysate that treats cancer-related and other conditions; tramadol HCl for managing postoperative pain; CAEL-101 for the treatment of amyloid light chain amyloidosis; and CEVA101 for severe traumatic brain injury in children and adults in the United States. It also develops CK-301 for treating patients with non-small cell lung cancer (NSCLC); CK-101 for the treatment of patients with epidermal growth factor receptor mutation-positive NSCLC; and antibodies that target glucocorticoid-induced TNFR-related protein and carbonic anhydrase IX, as well as anti-cancer agents that inhibit bromodomain and extra-terminal proteins, and poly polymerase. In addition, the company develops CUTX-101 for treating Menkes disease; preclinical adeno-associated virus gene therapies for treating mucopolysaccharidosis type 1, dysferlinopathies, and corneal transplant rejection; Triplex, which is in Phase II clinical study for preventing and treating cytomegalovirus (CMV); and Pentamer, a vaccine drug candidate for preventing CMV. Further, it offers Targadox, a tablet for severe acne; Luxamend wound cream; Ceracade for treating dry skin conditions; Triderm for treating eczema, dermatitis, allergies, and rash; and chimeric antigen receptor and engineered T cell therapies across various cancers. Additionally, it provides retail brokerage and wealth management services to high net worth individual and institutional clients; investment banking, merger and acquisition, and advisory services to micro, small, and mid-cap high growth companies; trades in securities; liquidity services; and tax preparation, fixed insurance sales, and licensed mortgage brokerage services.
Fortress Biotech issued its quarterly earnings results on August 10, 2018. The company reported EPS of ($0.50) versus the estimate of ($0.59). Revenue crushed estimates at $63.83 million during the quarter versus the $48.93 million estimate. Fortress Biotech’s revenue is up 25.8% year-over-year.
In the last year, revenue has grown by an eye-popping 94%!
Institutional ownership is up 2.17% over the previous 3 month period.
Mustang Bio, a Fortress Biotech Company, opened a cell therapy manufacturing facility at UMass Medicine Science Park in Worcester, Massachusetts. The facility will allow the efficient in-house evaluation of immuno-oncology technologies, like checkpoint antibodies and oncolytic viruses, with CAR Ts, potentially speeding up development timelines. They expect to be ready to process personalized cell therapies for use in clinical trials by the end of the year.
Fortress Biotech Stock
At first glance, FBIO stock appears to be in a downtrend but look carefully at the large players volume. After the stock hit $1.50, there was a huge flush and the large players volume rose. Notice that large players volume looks like it has finally turned the corner. The Twiggs Money Flow has started to rise as well, although it’s still negative. The MACD has gone positive after Fortress Biotech’s earnings report which suggests investors like what they heard.
I give FBIO a buy rating and I’m adding to the Healthcare Portfolio which is up 820% over the last year. My price target is $10 which represents 388% upside from the current price. Analysts agree with my buy rating. Overall there are no sell ratings, no hold ratings, and 3 buy ratings on FBIO stock. The average analyst price target is $10.66 which represents 423% upside from the current price.
Disclosure: As Premium members already know, I went long FBIO stock today.