Earnings are often dangerous for traders, so I rarely if ever buy a stock just ahead of its report. But once the numbers are out and you know how investors reacted, things can get interesting.
A good example of this is Repligen (NASDAQ:RGEN), a niche biotech company that reported this week and moved nearly 7% higher as a result. The company beat on the top and bottom line and raised full-year guidance for earnings and revenue. Adjusted earnings per share came in at $0.15 versus the estimate of $0.13. Revenue was $30.6 million versus $29.6 million estimate. Guidance for full-year 2017 was lifted to a range of $0.55 to $0.60 per share, with the midpoint above the current $0.56 estimate. The longer-term outlook is positive as well.
Technically, RGEN looked great even before its big move after earnings:
As you can see, RGEN is above all major support levels – its moving averages and price support in the low $30s – and the rallies have been on above-average volume. Also note that RSI (Relative Strength Index) is currently neutral, so it’s not flashing overbought, and the long- and short-term trends are bullish. (I recorded a video analysis of REGN’s chart, which you can watch here.)
REGN’s fundamentals and technicals are strong, and then I need to see a theme or catalyst to complete our NexGen investing criteria, what I often call the intangibles. Repligen passes there as well. The company is focused on biologics, which happens to be one of the fastest growing areas in pharmaceutical research. More specifically, REGN is focused on monoclonal antibodies (mAbs), proteins and vaccines. Consider that six of the top 10 selling pharmaceutical products are mAbs, and you don’t have to have a biology or medical degree to know the company is well positioned.
Analyzing REGN post-earnings, the stock has all the makings of a next-generation winner and is a buy on any weakness – for short- or long-term profits.
Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of FUTR Stocks and the ETF Bulletin. Matt is currently in the midst of an exciting launch centered around his trademark three-prong investing approach that targets the mega-trends old Wall Street is missing out on. His next-gen investing strategy is delivering enormous profits in stocks and ETFs. Click here for more information on his latest venture.