Is meme-trading losing its edge? It’s natural to wonder the viability of banking on coordinated market efforts via popular social media channels in the wake of Zomedica (NYSEAMERICAN:ZOM) stock.
Fundamentally, the veterinary testing and pharmaceutical specialist plays into strong underlying narratives. However, the latest sessions for ZOM stock have given believers little encouragement.
Following the end of the Oct. 11 session, ZOM stock found itself down 1.2% and down 6.4% over the trailing week. In the trailing month, shares slipped nearly 10%, while over the preceding half-year period, Zomedica hemorrhaged 55% of market value.
I’ve used the term Matryoshka doll of pain to describe such a scenario for similarly challenged stocks and it applies here as well. It was down another penny today, trading at an even 50 cents.
To be fair, though, ZOM stock is up more than 40% on a year-to-date basis, which I suppose is what gives current speculators hope. If it happened before, it could happen again.
While such a thesis didn’t pan out for several months, this time could be different. As our own Louis Navellier explained, Zomedica has implemented a major C-suite change:
According to the company, CEO Robert Cohen is retiring. Larry Heaton, who had already been appointed president effective Oct. 1, will succeed him.
It’s reasonable to say that Zomedica will continue to be in good hands. As an inventor on several U.S. patents, Heaton brings more than 35 years of executive leadership and operations experience from the medical device and biotechnology industries.
Throughout his lengthy career so far, Heaton has focused extensively on commercialization and business development in both large-cap and early-stage medical-device companies.
Navellier argued that he’s a good fit for Zomedica. But is that enough to shift the narrative for ZOM stock? Honestly, I’m not too sure.
If you’ve been watching the latest political rumblings — but I can’t blame you if you haven’t — you’ll know that the Republicans are in full attack mode. Why? The latest jobs report was not what Democrats were hoping for.
Per the Wall Street Journal, the “economy created 194,000 jobs in September, the smallest gain since December 2020 and down from 366,000 jobs added in August, the Labor Department said Friday. While the September payroll gains fell well short of economists’ expectations, job growth in August was bigger than previously estimated.”
The WSJ added that “Many workers gave up the job search and exited from the labor force last month, the data showed. The smaller pool of labor meant that despite the slowdown in hiring, the unemployment rate fell to 4.8% last month from 5.2% in August.”
A Closer Look at ZOM Stock
This isn’t just a problem for Democrats but for ZOM stock as well. Yes, you can cite data that millennials love their pets, but such information is more mysticism and exotification of millennials.
In reality, Americans of any age group and demographic love their four-legged family members. But that love only goes so far, as the Great Recession demonstrated here in the U.S.
And don’t just think it was an exclusively American problem.
Per a 2009 article from The Guardian, the U.K.’s Royal Society for the Prevention of Cruelty to Animals stated that it “dealt with 11,586 dumped animals last year, an average of more than 30 every day. And that figure represents just the pets illegally dumped, not those voluntarily taken to the RSPCA.”
Won’t the Economy Bounce Back?
Granted, the negative implication for ZOM stock depends on whether our economy bounces back or not. Certainly, with the Biden administration working on its infrastructure plan, the broader narrative can swing to the more optimistic end of the spectrum. But how likely is this scenario?
While the power of positive thinking is nice and all, I’m not sure hope can restore the damage to our labor force participation rate.
It’s one of the few metrics that should give everyone pause. At 61.6% as of the latest read (September), this metric hasn’t been this low since January 1977.
You know what that means? Substantively, we haven’t fully recovered from the last recession. So the real implication is that if the smelly stuff hits the fan again, the outcome could be even worse — which is a real sorry forecast for pets.
It’s great to be positive on ZOM stock and all. However, anybody who ventures in must do so with a firm grasp of the facts.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.