Sell EXAS for a -8% loss. The expansion label of their cologuard product by the FDA sounded awesome; however, the company made a SEC filing (form 424B3) that suggests they are likely to issue more shares. Let’s not wait around to find out.
Lesson learned: EXAS had a market cap of over $12 billion while sales were only $623 million last year, giving it a P/S ratio of more than 19. I should not have abandoned fundamentals and specifically the P/S ratio even though the FDA expanded the cologuard label. Mass corruption rules the government and corporations today and so it’s likely the expanded FDA label ruling was already leaked to well connected individuals (Congress, institutional traders, wealthy and powerful) and so it was already priced into the stock when I read about it over TheFly. Do not abandon fundamentals for a catalyst in this market.