Harmony Biosciences Holdings, Inc.

HRMY Details

Decent Rise in Net Product Revenue in Q3FY20: Harmony Biosciences Holdings, Inc. (NASDAQ: HRMY) is a pharmaceutical company focused on developing and commercializing novel treatment options for people living with rare, neurological diseases. The company was established in October 2017 is currently headquartered in Plymouth Meeting, PA. As on 11 December 2020, the company’s market capitalization stood at ~$2.37 billion.

Key Investment Rationale:

• The company has received approval from the US FDA for WAKIX®, treatment of people with excessive daytime sleepiness (EDS) or cataplexy associated with narcolepsy.
• In August 2020, the company completed an upsized IPO of 6,151,162 shares of common stock at a public offering price of $24.00 per share, raising around $147.6 million in gross proceeds.
• During Q3FY20, the company’s net income grew to $1.9 million, compared to the net loss of $31.9 million in pcp, mainly driven by the rise in net product revenue.
• With its robust cash position of $221.7 million (as at 30 September 2020), the company seems well placed to continue its current clinical programs and to pursue the acquisition of additional assets.

Net Product Revenue (Source: Company Reports)

Outlook: The company sees significant growth potential in the adult narcolepsy market as there is a need for more effective treatment options, new MOAs, and more convenient dosing. With its FDA approved WAKIX® product, the company seems well placed to treat patient with excessive daytime sleepiness (EDS) or cataplexy associated with narcolepsy. 

SWOT Analysis:

Stock Recommendation: Over the last one month, the stock of HRMY has corrected by 5.59%. On the technical analysis front, the stock has a support level of ~$40.29 and resistance of ~$47.65. For Q3FY20, the company’s current ratio stood at 7.87x, higher than the current ratio of 3.33x, demonstrating that the company is well equipped to pay its short-term obligations. Considering the company’s decent performance in Q3FY20, robust cash balance, commercial opportunity from WAKIX®, expected growth in the adult narcolepsy market, we give a “Speculative Buy” recommendation for the stock at the closing price of $41.77, down by 2.59% on 11 December 2020.

HRMY Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Niu Technologies

NIU Details

Robust Sales Growth in China: Niu Technologies (NASDAQ: NIU) is engaged in offering smart urban mobility solutions. The company is also engaged in designing, manufacturing, and selling smart e-scooters. As on 11 December 2020, the market capitalization of the company stood at ~$2.18 billion.

Key Investment Rationale:

• NIU recently entered into a strategic alliance with Aurora Mobile Limited to help its customers to improve operational and service productivity, thereby offering an optimal user experience for their customers.
• In 3QFY20, NIU witnessed robust sales growth in China. Its China sales volume skyrocketed 70% on pcp, owing to new products unveiled earlier this year and retail network growth.
• Revenues in 3QFY20 grew 36.7% year over year. Markedly, the number of e-scooters traded in the international markets went up 83.9% on pcp, in October this year.

3QFY20 Key Highlights (Source: Company Reports)

Outlook: For 4QFY20, the company expects revenues to be in the ambit RMB 565 million to RMB 615 million, depicting a rise of 5% to 15%.

SWOT Analysis:

Stock Recommendation: As per NASDAQ, the stock of NIU is trading above the average of its 52-weeks’ trading range. The stock of CLNE gave a return of 53.3% in the past three months. On a technical front, the stock has a support level of ~$26.95 and a resistance level of ~$30.38. Considering, the strong sales growth in China, higher E-scooter sales revenues from international markets, strategic alliance, cost optimization efforts, and increase in top-line in 3QFY20, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $29.16, down by 2.97% on 11 December 2020.

NIU Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Inseego Corp.

INSG Details

Decent Performance in Q3FY20: Inseego Corp. (NASDAQ: INSG) is a leader in 5G and intelligent IoT device-to-cloud solutions. The company provides innovative mobile broadband and fixed wireless access solutions to service providers, enterprises, and government entities worldwide. As on 11 December 2020, the company’s market capitalization stood at ~$1.36 billion.

Key Investment Rationale:

• With the recent launch of its industry-leading 5G MiFi® M2000 mobile hotspot, the company is expanding its global footprint in Japan.
• INSG is expanding its relationship with T-Mobile, as Inseego 5G MiFi® M2000 is now available at T-Mobile as its first 5G mobile hotspot.
• The company’s MiFi® 8000 4G LTE mobile hotspot is now available for AT&T enterprise users.
• During Q3FY20, the company’s revenue grew by 44% year-over-year to $90.2 million. Over the quarter, the company achieved positive free cash flow and reported adjusted EBITDA of $7.4 million.

Q3FY20 Results (Source: Company Reports)

Outlook: Looking ahead, the company is focused on advancing its 5G hardware offerings and integrating them with its cloud-based management platform, which will provide recurring revenue streams attached to Inseego products. The company is committed to diversify and expand its global customer base while building performance-leading products.

SWOT Analysis:

Stock Recommendation: Over the last one month, the stock of INSG has provided a return of 47.58%. On the technical analysis front, the stock has a support level of ~$9.65 and resistance of ~$14.50. During Q3FY20, the company delivered historically high volumes of LTE products to meet the demand for remote work and connectivity. Looking ahead, the company expects continued positive market traction with the Ctrack Clarity SMB-focused application. Considering the company’s decent performance in Q3FY20, debt-free balance sheet, recent launch of its industry-leading 5G MiFi® M2000 mobile hotspot, and expanding global customer base, we give a “speculative Buy” recommendation for the stock at the closing price of $13.755, up by 12.19% on 11 December 2020, owing to the news related to its expanding presence in Japan.

INSG Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Clean Energy Fuels Corp.

CLNE Details 

Reported Higher Station Construction Sales in Q3FY20: Clean Energy Fuels Corp. (NASDAQ: CLNE) is one of the top providers of the cleanest fuel for the transportation market in North America. As on 11 December 2020, the market capitalization of the company stood at ~$868.4 million.

Key Investment Rationale:

• Through its sales of Redeem™ renewable natural gas (RNG), the company will be able to meet the continued demand for ultra-low carbon fuel from organic waste across key business segments.
• The company rides on its renewable natural gas business, which strongly contributed to CLNE’s operating results, benefitting the customers’ carbon reduction goals.
• Investment in RNG facilities is immense and CLNE plays a vital role in making this renewable fuel into fuel tanks. The company reported higher station construction sales of $8.8 million in 3QFY20, up from $6.4 million in pcp.

3QFY20 Key Highlights (Source: Company Reports)

Outlook: The company expects to report GAAP net loss of ~$11.0 million for 2020 and adjusted EBITDA for 2020 is likely to be ~$45.0 million. This was mainly due to the continuing effects of COVID-19 which impacted the airports, public transit, and government fleet customer markets. 

SWOT Analysis:

Stock Recommendation: As per NASDAQ, the stock of CLNE is trading close to its 52-weeks’ high level of $5.25. The stock of CLNE gave a return of 74.5% in the past three months and a return of 54.8% in the last one month. On a technical front, the stock of CLNE has a support level of ~$4.26 and a resistance level of ~$5.01. On a TTM basis, the stock is trading at an EV/Sales multiple of 2.8x, slightly lower than the industry median (Oil & Gas) of 2.9x. Considering the current trading levels, acceleration in demand for renewable gas, quarterly performance, and key investment risks, we recommend a ‘Hold’ rating on the stock at the current market price of $4.38, down by 3.31% on 11 December 2020.

CLNE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Newage Inc.

NBEV Details

Improving Cash Balance via New Debt Facility: Newage Inc. (NASDAQ: NBEV) is a Colorado-based social selling and distribution company that builds brands across three primary platforms including health and wellness, healthy appearance, and nutritional performance. As on 11 December 2020, the company’s market capitalization stood at ~$351.12 million.

Key Investment Rationale:

• The company recently completed the merger with ARIIX. NBEV expects to capture approximately $20 million in additional annualized EBITDA in the first 18 months and revenue synergies.
• The company recently announced that it will close a new debt facility for a total of $30 million, increasing its unrestricted cash balance to more than $50 million.
• The funds from the new debt facility will be used to pay off a balance with East West Bank, fulfil its cash payment obligation under the ARIIX transaction, and use strategically to fund operating activities designed to ramp up the company’s global organic revenue growth.

Combined Revenue YTD September 2020 (Source: Company Reports) 

Outlook: With the completion of the merger with ARIIX and the expected improved cash generation of the combined company augmented with the new credit facility, the company seems well placed to meet its organic operating needs throughout 2021. 

SWOT Analysis:

Stock Recommendation: Over the last three months, the stock has provided a return of 62.98%. On the technical analyses front, the stock has a support level of ~$2.28 and resistance of ~$3.5. Over the past six months, the company has captured more than $10 million in headcount related savings. Moving forward, the company expects significant further benefits across all its identified synergy workstreams. On a TTM basis, the stock is trading at a price to book multiple of 3.4x, lower than the industry average of 16.1x, demonstrating that the stock is undervalued. Considering the improved cash generation from the new credit facility, expected benefits from the ARIIX merger, decent outlook, and TTM valuation, we give a “Speculative Buy” recommendation for the stock at the closing price of $2.95, down by 6.65% on 11 December 2020.

NBEV Daily Technical Chart (Source: Source: Refinitiv, Thomson Reuters)

OrganiGram Holdings Inc.

OGI Details

Decent Revenue Growth in Q4FY20: OrganiGram Holdings Inc. (NASDAQ: OGI) is a leading Canadian licensed producer of high-quality medical and recreational cannabis. The company’s wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada. As on 11 December 2020, the company’s market capitalization stood at ~$317.96 million.

Investment Rationale:

• Since July 2020, the company has launched 40 new stock keeping units (SKU’s) including new high THC strains, and further value segment offerings.
• For Q4FY20, the company reported a 25% YoY growth in net revenue and 32% YoY growth in gross revenues. The company reported a net loss of $38.6 million in Q4FY20, higher than the net loss of $22.5 million in Q4FY19, largely due to a greater negative gross margin.
• Recently raised ~$69 million in gross proceeds from an underwritten public offering.

Quarterly Results (Source: Company Reports)

Outlook: On the back of an expanding addressable market, legalisation of cannabis products, an increase in the number of brick-and-mortar retail stores, the company expects the cannabis industry to grow further in the coming times. Looking ahead, the company is focused on launching new products and to reach its full potential and gain market share to drive meaningful sales growth.

SWOT Analysis:

Stock Recommendation: The company ended Q4FY20 with cash and short-term investments of $74.7 million. Over the last one month, the stock has provided a return of 11.38% and is currently inclined towards its 52-weeks low price of $1.01. On the technical analysis front, the stock has a support level of ~$1.037 and resistance of ~$2.12. Considering the company’s decent performance in Q4FY20, expected growth in the cannabis industry, and current trading level, we give a “Speculative Buy” recommendation for the stock at the closing price of $1.37, down by 1.44% as on 11 December 2020.

OGI Daily Technical Chart (Source: Source: Refinitiv, Thomson Reuters)

Ampio Pharmaceuticals, Inc.

AMPE Details

Signed Two Joint Research Agreements: Ampio Pharmaceuticals, Inc. (NYSEAMERICAN: AMPE) is engaged in developing proprietary drugs for metabolic disease, eye disease, kidney disease, inflammation, and CNS disease. As on 11 December 2020, the market capitalization of the company stood at ~$277.6 million.

Key Investment Rationale:

• Recently, the company inked two joint research agreements to discover new clinical indications for its immunomodulatory drug, Ampion™.
• The company stated that post the approval by the Safety Monitoring Committee (SMC), its AP-014 Phase I inhaled Ampion™ clinical study in COVID-19 patients is scheduled to full open enrolment.
• In 3QFY20, net loss decreased to $3.4 million, from a net loss of $7.2 million for the same period in 2019.

3QFY20 Key Highlights (Source: Company Reports)

Outlook: For 4QFY20, the company anticipates clinical trial as well as funded research and exploration expenditure to rise, owing to the AP-014 inhaled Ampion study.

SWOT Analysis:

Stock Recommendation: The stock gave a return of 80.9% in the past three months. On a technical front, the stock has a support level of ~$1.41 and a resistance level of ~$1.61. Considering the recent developments, optimistic outlook, strong liquidity position, continuous focus on cost control measures, higher investment to support its growth, we recommend a “Speculative Buy” rating on the stock at the current market price of $1.50, up by 23.97% on 11 December 2020, owing the update related to the signing of collaborative research agreements.

AMPE Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Neptune Wellness Solutions Inc.

NEPT Details 

Decent Growth in 2QFY21 Revenue: Neptune Wellness Solutions Inc. (NASDAQ: NEPT) is a diversified and fully integrated health and wellness company with a market capitalisation of ~$200.72 million as on 11 December 2020. The company is engaged in providing turnkey product development and supply chain solutions across numerous health and wellness verticals.

Key Investment Rationale:

• The company expects the B2C branded product revenue across flower and vapes to generate higher margins within a $2.1 billion market.
• The company has also secured its initial purchase orders of its own in-house built Cannabis brand Mood Ring™ products to the British Columbia Liquor Distribution Branch (BCLDB).
• The company’s Neptune Health and Wellness Innovation Inc. division has secured an aggregate of more than US$100 million in new delivery orders, from six different Neptune clients.
• In 2QFY21, the company reported total revenues of $28.68 million, up 155% quarter over quarter and 340% from the year-ago quarter.

2QFY20 Key Highlights (Source: Company Reports)

Outlook: The company remains on track to accelerate its global distribution network and anticipates consumer-packaged goods (CPG) distribution to be more than 70% of its revenues in 3QFY21. Further, the company expects its business segment to continue to generate robust growth, which in turn will aid the company to garner additional revenue from its purchase orders to come. 

SWOT Analysis:

Stock Recommendation: The stock made a 52-week low and high of $0.96 and $3.58 and is currently trading at the lower band of its 52-week trading range. The stock has corrected by 16.2% in the last one month. On a technical analysis front, the stock has a support level of ~$1.53 and a resistance level of ~$2.19. Considering the aforesaid facts, the company’s current trading levels, increasing top line in 2QFY21, decent outlook and key risks associated with the business, we recommend a “Speculative Buy” rating on the stock at the closing price of $1.55, down by 1.9% on 11 December 2020.

NEPT Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Equillium, Inc.

EQ Details

Advancing Core Trials: Equillium, Inc. (NASDAQ: EQ) is a biotechnology company, which is engaged in the development of products for autoimmune and inflammatory disorders. As on 11 December 2020, the market capitalization of the company stood at ~$120.18 million.

Key Investment Rationale:

• The company is well placed to advance its core trials including the Phase 1b EQUATE trial in acute graft-versus-host disease (aGVHD)
• In 3QFY20, the company reported a 100% response rate in cohort 3. Also, the company recorded an 80% overall response rate across all cohorts to date from the EQUATE Phase 1b study of itolizumab.
• Bolstered the balance sheet by raising a total of $53.0 million in net proceeds from financings in 3QFY20. This resulted in a cash balance of $90.5 million at the end of the quarter.

Cash Highlights (Source: Company Reports)

Outlook: The company is also on track to assess the rapidly changing clinical and commercial landscape linked to the pandemic and may consider other options to gauge itolizumab in COVID-19 patients. The company expects top-line data from the Phase 1b part of the EQUATE trial in aGVHD in 1HFY21.

SWOT Analysis:

Stock Recommendation: The stock of EQ is trading close to its 52-weeks’ low level of $2.2. The stock gave a return of 68.1% in the past six months. On a technical front, the stock has a support level of ~$4.02 and a resistance level of ~$6.39. Considering the recent developments, interim data from the phase 1b portion of its EQUATE, strong liquidity position, decent outlook, and current trading well along with key risks, we recommend a “Speculative Buy” rating on the stock at the current market price of $4.86, up by 2.1% on 11 December 2020.

EQ Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Oragenics Inc.

OGEN Details

Closing a $6 million Underwritten Public Offering: Oragenics Inc. (NYSEAMERICAN: OGEN) is a healthcare company focused on the creation of the TerraCoV2 immunization product candidate to combat the novel coronavirus pandemic. As on 11 December 2020, the company’s market capitalization stood at ~$34.15 million.

Investment Rationale: 

• The company recently announced the closing of a $6.0 million Underwritten Public Offering with proceeds expected to be used for funding the company’s pre-clinical development of its SARS-CoV-2 vaccine, Terra CoV-2 and lantibiotics program and for general corporate purposes.
• FDA broadly supports the company’s Pre-IND Development Program for its SARS-CoV-2 Vaccine.
• The recent acquisition of Noachis Terra provides access to NIH-created SARS-CoV-2 (COVID-19) Spike Protein Vaccine Technology.
• During the September 2020 quarter, the company spent $4.5 million on operating expenses, comprising $3.5 million spent on research and development and $1 million spent on general and administration. For the quarter, the company reported a total net loss of $4.5 million. As at 30 September 2020, the company had cash and cash equivalent of ~$10 million.

September 2020 Quarter Results (Source: Company Reports) 

Future Plans: The company recently confirmed that it plans to file IND Application by the end of the first quarter of 2021 and commence patient enrollment in Phase 1 clinical study early in the second quarter of 2021.

SWOT Analysis:

Stock Recommendation: As at 30 September 2020, the company had cash and cash equivalent of ~$10 million. The stock of OGEN has corrected by 34.85% in the last three months and is currently inclined towards its 52-weeks low price of $0.036, offering a decent opportunity for accumulation. On the technical analysis front, the stock has a support level of ~$0.367 and resistance of ~$0.75. Considering the company’s recently announced $6.0 million Underwritten Public Offering, and its recent plans to file IND Application and commence patient enrolment in Phase 1 clinical study, and current trading levels, we give a “Speculative Buy” recommendation for the stock at the closing price of $0.4417, down by 1.41% as on 11 December 2020. 

OGEN Daily Technical Chart (Source: Source: Refinitiv, Thomson Reuters

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