Vir Biotechnology, Inc.

VIR Details

New Research Demonstrates Enhanced Monoclonal Antibodies for Protective Adaptive Immunity: Vir Biotechnology, Inc. (NYSE: VIR) is a clinical-stage immunology company, which is engaged in the development of therapeutic products to treat and prevent serious infectious diseases. As on 20 October 2020, the market capitalization of the company stood at ~$4.50 billion. The company has recently published pre-clinical research in an influenza animal model, which highlights a new mechanism for enhancing the efficacy of monoclonal antibodies to treat viral infection and induce a protective response. The research states that the selective engagement of an activating Fc receptor on dendritic cells by antiviral monoclonal antibodies induced protective CD8+ T cell adaptive responses.

Vir Biotechnology and GSK Announce Global Expansion to Phase 3 of COMET-ICE Study: The company has announced the global expansion of Phase 3 of the COMET-ICE with GlaxoSmithKline plc to evaluate VIR-7831 for the early treatment of COVID-19. VIR-7831 is likely to have the potential to neutralize the virus, kill infected cells, provide a high barrier to resistance, and achieve high concentrations in the lungs. The results for the primary endpoint are expected in the first quarter of 2021, with current estimates at January 2021.

Quarterly Financial Highlights: During the quarter ended 30 June 2020, the company reported an increase in revenue to $67.0 million but reported a net loss of US$31.2 million. As of June 30, 2020, the company had ~US$552.4 million in cash.

Quarterly Financial Performance (Source: Company Reports)

Stock Recommendation: The company is focused on executing its pipeline priorities, starting two new hepatitis B trials, and preparing to start new influenza A and HIV trials. As per NASDAQ, the stock of VIR is inclined towards its 52-weeks’ low level of US$11.65. The stock of VIR gave a negative return of 31.9% in the past three months and a return of 8.3% in the last one month. On a technical front, the stock of VIR has a support level of ~US$32.8 and a resistance level of ~US$44.2. Considering the current trading levels, returns in the past one month, and its clinical based performance, we recommend a ‘Buy’ rating on the stock at the closing price of US$35.46, down by 3.09% on 20 October 2020.

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

Sea Limited

SE Details

Growth Opportunities in Fintech: Sea Limited (NYSE: SE) is a leading global consumer internet company, founded in Singapore in 2009. As on 20 October 2020, the market capitalization of the company stood at ~$81.38 billion. The company is witnessing a structural shift to digitalization across markets and is seeing strong user growth across its platforms. It seems well-positioned to capture the accelerated growth opportunities created by the rapid expansion of the digital economy.

Q2FY20 Financial Highlights: During the second quarter of FY20, the company reported a YoY growth of 93.4% in revenue to US$1,287.2 million and YoY growth of 106.1% in gross profit to US$200.8 million. In the same time span, the company reported an adjusted EBITDA of US$7.7 million as compared to an EBITDA loss of US$11.0 million in the second quarter of 2019. During the quarter, the active users of digital entertainment reached 499.8 million, reflecting an increase of 61.0% on the pcp.

Quarterly Financial Performance (Source: Company Reports)

Stock Recommendation: The company has deployed its capital in an effective manner and retains fundamental strength, which will allow it to fund rapid growth through cash generated from operations. As per NASDAQ, the stock of SE is trading close to its 52-weeks’ high level and thus retains limited potential for further growth. The stock of SE gave a return of 44.53% in the past three months and a return of 13.09% in the past one month. On a technical front, the stock of SE has a support level of ~$154.93 and a resistance level of ~$177.45. On a TTM basis, the stock of SE is trading at an EV/Sales multiple of 17.5x, higher than the industry average (Software & IT Services) of 8.2x, and thus seems overvalued. Considering the current trading levels, TTM valuation, and the softer market conditions, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the closing price of US$166.87, up by 2.47% on 20 October 2020.

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

Invesco Mortgage Capital Inc

IVR Details

Portfolio Update: Invesco Mortgage Capital Inc (NYSE: IVR) is a real estate investment trust that focuses on investing, financing, and managing residential and commercial mortgage-backed securities and mortgage loans. As on 20 October 2020, the market capitalization of the company stood at ~US$506.03 million. The company has resumed investing in Agency residential mortgage-backed securities in July 2020 and reported a total investment portfolio of approximately US$6.0 billion, which consists of 91% Agency RMBS and 9% commercial credit investments.

Q3FY20 Update: During Q3FY20, the company repaid the remaining balance of its US$740 million secured loans and reported repurchase agreement borrowings of US$5.2 billion. These collateralized by Agency RMBS. At the end of the quarter, the company reported a cash balance of US$408 million and estimated book value per share in the range of US$3.29 to US$3.39, up from US$3.17 as of June 30, 2020. The Board declared a cash dividend of US$0.05 per share, which will be paid on 27 October 2020. In Q2FY20, the company had repaid borrowings of $6.9 billion. For Q2FY20, the company had reported net loss attributable to common stockholders of US$299.9 million.

Q2FY20 Results (Source: Company Reports)

Stock Recommendation: As per NYSE, the stock of IVR is trading at attractive levels, close to its 52-weeks’ low levels of US$1.82 but retains limited potential for further growth. The stock of IVR gave a return of 12.33% in the past six months but a negative return of 15.96% in the last one month. On a technical front, the stock of IVR has a support level of ~US$2.08 and a resistance level of ~US$3.95. Considering the current trading levels, softer market conditions, key investment risks and volatile returns, we give an ‘Avoid’ rating on the stock at the closing price of US$2.79, up by 1.45% on 20 October 2020.

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

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