With an easy-to-use mobile app, commission-free trades, and no minimum account balance requirement, the Robinhood platform has become a go-to investment destination for millennial investors. The platform leverages technology to the fullest so that everyone can build their stock portfolios and have access to financial markets.
The Robinhood 100 List features popular stocks that have created quite a stir in the markets. Whether the stocks are fundamentally strong is a debatable matter, but these are the ones millennial investors love.
There are certainly biotech stocks on the list that have seen a strong momentum amid the COVID-19. The second wave of the deadly coronavirus is setting its grip tightly across the world, and companies that are involved directly or indirectly in containing the spread of the deadly virus are poised for strong performance. Biotechnology stocks that are associated with the diagnosis of various diseases besides the COVID-19, and the ones working on a prospective vaccine stand to benefit the most.
Biotech stocks have consistently beaten the broader market over the past year. The iShares NASDAQ Biotechnology ETF (IBB) has delivered 34.4% returns over this period versus the S&P 500’s 14.8% gain.
Exact Sciences Corporation (EXAS)
The Robinhood traders are on the correct track with EXAS. The company is involved in molecular diagnostics that focuses on early detection and prevention of colorectal cancer. EXAS launched its flagship product, Cologuard, in 2014 as the first stool DNA test for colorectal cancer. Besides detection, the company also offers treatment guidance and monitoring. EXAS’s Cologuard has screened nearly two million people for colorectal cancer.
Earlier this month, EXAS and Pfizer (PFE) announced that they would extend and amend their agreement to promote Cologuard, which is the first and only non-invasive stool DNA screening test for colorectal cancer. Cologuard is also approved by the FDA. Increasing the screening rates for colorectal cancer is the need of the hour. On 12 October, EXAS introduced the Oncotype MAP™ Pan-Cancer Tissue test for patients with advanced, metastatic, refractory, or any recurrent form of cancer.
For the second quarter, EXAS delivered a 34.5% year-over-year revenue growth to $268.9 million. The COVID-19 testing revenue for the quarter was $34.6 million. The company is betting high on Cologuard and believes there will be a rise in demand amid the pandemic. EXAS’s Chairman and CEO, Kevin Conroy, stated, “Cologuard helps solve the problem of COVID-related missed cancer screenings because it’s a convenient, accurate, at-home test, and we believe this will accelerate adoption.” The loss per share for the quarter ended June 2020 expanded to $0.58 from $0.30 a year ago.
Analysts expect loss per share to be $0.52, indicating a 67.7% year-over-year decline. Meanwhile, the revenue estimate for the third quarter indicates a 54.2% increase to $337.37 million.
On a year-to-date basis, EXAS rose 11.4% to end yesterday’s session at $103.2. The stock nearly doubled since March after its CEO unveiled data for the company’s liquid biopsy that detected multiple cancers from a blood sample. This was a stellar move that further strengthened EXAS’s position in the diagnostic market.
How does EXAS stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
B for Overall POWR Rating
The stock is also ranked #3 out of 58 stocks in the Medical – Diagnostics/Research industry.
Moderna Inc (MRNA)
MRNA is a leading biotech company that is primarily involved in drug discovery, development as well as the formulation of vaccine technology leveraging its messenger RNA Therapeutics or mRNA. The mRNA drugs instruct the patient’s cells to generate proteins that could prevent, treat, or cure disease. Over the years the company has become synonymous with prophylactic vaccines, cancer vaccines, localized regenerative therapeutics, as well as intratumoral immune-oncology.
Robinhood traders find MRNA as a future winner. The stock has soared 264.4% on a year-to-date basis to close yesterday’s trading session at $71.31, while in the past year MRNA has returned 381.5%.
Speaking at The Wall Street Journal‘s annual Tech Live conference yesterday, CEO Stéphane Bancel revealed that the company is awaiting interim results of its late-stage clinical trial for its COVID-19 vaccine. Bancel also indicated that in case the results are favorable, MRNA could apply for emergency use authorization (EUA) by late November. It may receive approval from the US Food and Drug Administration (FDA) by December.
Last month, MRNA also stated that it is set to produce 20 million doses of its COVID-19 vaccine by the end of 2020. It reiterated its goal of producing 500 million to 1 billion doses in 2021.
MRNA’s total revenue for the second quarter jumped five times to $66.4 million, as against $13 million reported a year ago. The massive growth in the company’s total revenue is attributable to the Grant revenue growth due to MRNA’s BARDA agreement, related to its mRNA-1273 vaccine candidate development. Meanwhile, Collaboration revenue growth was primarily because of AstraZeneca. MRNA’s loss per share for the quarter also narrowed to $0.31 compared to $0.29 in the second quarter of 2019. The company saw a spike in its operating expenses due to higher R&D expenses on account of mRNA-1273 clinical development.
The consensus loss per share estimate for the quarter ended September of $0.43 indicate a 16.2% decrease year-over-year. However, for the next quarter, the EPS is expected to grow by 27%. Revenue for the third quarter is expected to surge 322.2% to $77.71 million.
Under POWR Ratings, the company has been accorded a “B” rating for Trade Grade and Peer Grade. Within the Biotech industry, it’s ranked #57 out of 384 stocks.
Medtronic PLC (MDT)
On 8 October, MDT’s Indian subsidiary announced the launch of Azure™ pacemaker with BlueSync™ technology. This will be India’s first pacemaker that can directly communicate with patients’ smartphones and tablets. This pacemaker is likely to strengthen the company’s Cardiac Rhythm & Heart Failure portfolio in India.
At the beginning of October, the company also announced the acquisition of a private US-based medical device firm, Avenu Medical. Avenu specializes in creating arteriovenous (AV) fistulae for end-stage renal disease (ESRD) patients undergoing dialysis.
For the quarter ended July, MDT’s revenue declined 13% year-over-year to $6.5 billion. The US revenue dropped 13%, while the non-US market revenue declined 8%. The company indicated that it was hit by the pandemic, however, it is now bouncing back. MDT’s performance indicates a faster recovery compared to the past quarter.
For the second quarter, analysts expect the EPS to decline by 38.9% to $0.80. However, for the next five years, the EPS is estimated to grow at a rate of 9.4% per annum. The revenue estimate for the October quarter is $7.1 billion. Meanwhile, MDT has refrained from issuing guidance due to the current volatility in the economy.
MDT has lost 3.8% year-to-date to close yesterday’s trading session at $109.2. Over the past year, the stock has edged just about 1% higher due to tepid financials amid the COVID-19 crisis. However, the stock has gained 7.5% over the past six months.
MDT is rated a “Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade and Peer Grade, and a “B” in Industry Rank and Buy & Hold Grade. In the 142 stocks Medical – Devices & Equipment industry, it is ranked #15.
Amgen, Inc. (AMGN)
AMGN is one of the leading independent biotech companies in the world. It focuses on discovering, developing, manufacturing, and selling human therapeutics on a global level. Its specialization areas include oncology, hematology, inflammation, bone health, nephrology, cardiovascular, and generic.
In September, Eli Lilly and Company (LLY) and AMGN announced a collaboration to manufacture a global antibody to significantly boost the existing supply capacity for Lilly’s potential COVID-19 therapies. The association of the two companies would be instrumental in scaling up the production of Lilly’s antibody treatments once they receive approval.
AMGN’s revenue for the second quarter rose 6% year-over-year to $6.2 billion, on the back of higher volume growth. However, it was partially offset by lower net selling prices. The company also introduced a lot of new products during the quarter. The EPS for the quarter declined 15% year-over-year to $3.05, primarily due to the amortization cost associated with the Otezla acquisition.
Analysts expect AMGN’s revenue for the quarter ended September to climb 10.7% to $6.4 billion. The company’s EPS is expected to grow by 3.8% to $3.8 for the third quarter. Over the next 5 years, EPS is expected to increase by 6.9% per annum. AMGN is upbeat about shrugging off the COVID-19 impact and expects significant pipeline updates in the second half of the year.
Over the past year, AMGN gained 14% to close yesterday’s trading session at $231.1. On a year-to-date basis, AMGN fell 4.1%. The company is one of the few in the biotech space to pay a regular dividend. Its dividend yield stands at 2.8% and its payouts have surged five times since it began paying a dividend in 2011.
Under POWR Ratings, the company has been accorded a “B” rating for Buy & Hold Grade and Peer Grade. Within the Biotech industry, it’s ranked #1 out of 384 stocks.
Want More Great Investing Ideas?
EXAS shares were trading at $100.35 per share on Wednesday afternoon, down $2.67 (-2.59%). Year-to-date, EXAS has gained 8.51%, versus a 8.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Namrata Sen Chanda
Namrata is an accomplished financial journalist, with nearly a decade of experience. She specializes in interpreting news releases and framing investment strategies, and has worked with some of the leading companies in real estate, banking, insurance, mutual funds, financial research, fintech, and investment education. More...
More Resources for the Stocks in this Article
|Ticker||POWR Rating||Industry Rank||Rank in Industry|
|EXAS||Get Rating||Get Rating||Get Rating|
|MRNA||Get Rating||Get Rating||Get Rating|
|MDT||Get Rating||Get Rating||Get Rating|
|AMGN||Get Rating||Get Rating||Get Rating|