Earnings

Uncovering the next great stocks: Atossa Genetics Inc. (ATOS), Blueprint Medicines Corporation (BPMC)

The shares of Atossa Genetics Inc. have increased by more than 37.26% this year alone. The shares recently went down by -12.82% or -$0.05 and now trades at $0.36. The shares of Blueprint Medicines Corporation (NASDAQ:BPMC), has jumped by 14.66% year to date as of 04/16/2018. The shares currently trade at $86.46 and have been able to report a change of -4.93% over the past one week.

The stock of Atossa Genetics Inc. and Blueprint Medicines Corporation were two of the most active stocks on Monday. Investors seem to be very interested in what happens to the stocks of these two companies but do investors favor one over the other? We will analyze the growth, profitability, risk, valuation, and insider trends of both companies and see which one investors prefer.

Profitability and Returns

Growth alone cannot be used to see if the company will be valuable. Shareholders will be the losers if a company invest in ventures that aren’t profitable enough to support upbeat growth. In order for us to accurately measure profitability and return, we will be using the EBITDA margin and Return on Investment (ROI), which balances the difference in capital structure. These figures suggest that ATOS ventures generate a higher ROI than that of BPMC.

Liquidity and Financial Risk

The ability of a company to meet up with its short-term obligations and be able to clear its longer-term debts is measured using Liquidity and leverage ratios. The current ratio for ATOS is 6.40 and that of BPMC is 16.00. This implies that it is easier for ATOS to cover its immediate obligations over the next 12 months than BPMC. The debt ratio of ATOS is 0.00 compared to 0.00 for BPMC. BPMC can be able to settle its long-term debts and thus is a lower financial risk than ATOS.

Valuation



ATOS currently trades at a P/B of 1.20, while BPMC trades at a P/B of 5.55, and a P/S of 180.53. This means that looking at the earnings, book values and sales basis, ATOS is the cheaper one. It is very obvious that earnings are the most important factors to investors, thus analysts are most likely to place their bet on the P/E.

Analyst Price Targets and Opinions

The mistake some people make is that they think a cheap stock has more value to it. In order to know the value of a stock, there is need to compare its current price to its likely trading price in the future. The price of ATOS is currently at a -82% to its one-year price target of 2.00. Looking at its rival pricing, BPMC is at a -11.32% relative to its price target of 97.50.

When looking at the investment recommendation on say a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell), ATOS is given a 2.00 while 1.60 placed for BPMC. This means that analysts are more bullish on the outlook for ATOS stocks.

Insider Activity and Investor Sentiment




Short interest or otherwise called the percentage of a stock’s tradable shares currently being shorted is another data that investors use to get a handle on sentiment. The short ratio for ATOS is 0.62 while that of BPMC is just 6.90. This means that analysts are more bullish on the forecast for ATOS stock.

Conclusion

The stock of Blueprint Medicines Corporation defeats that of Atossa Genetics Inc. when the two are compared, with BPMC taking 4 out of the total factors that were been considered. BPMC happens to be more profitable, generates a higher ROI, has higher cash flow per share, higher liquidity and has a lower financial risk. When looking at the stock valuation, BPMC is the cheaper one on an earnings, book value and sales basis. Finally, the sentiment signal for BPMC is better on when it is viewed on short interest.

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