Regeneron Brings in the Big Money

And the drugmaker’s stock could lift even more due to its popular eczema medication and a healthy pipeline of new treatments. But another likely reason is Big Money lifting the stock.

Big Money Likes Regeneron

So, what’s Big Money? Said simply, that’s when a stock goes up in price alongside chunky volumes. It’s indicative of institutions betting on the shares.

Smart money managers are always looking for the next hot stock. And Regeneron has many fundamental qualities that are attractive.

This sets up well for the stock going forward. But how the shares have been trading points to more upside. As I’ll show you, the Big Money has been consistent in the shares.

You see, fund managers are always looking to bet on the next outlier stocks…the best in class. They spend countless hours sizing up companies, reading reports, speaking to analysts…you name it. When they find a company firing on all cylinders, they pounce in a big way.

That’s why I’ve learned how critical it is to gauge Big Money demand for shares. To show you what I mean, have a look at all the Big Money signals REGN has made the last year.

The last few months have seen Big Money activity too. Each green bar signals big trading volumes as the stock ramped in price:

Source: www.mapsignals.com

In the last year, the stock attracted 30 Big Money buy signals. Generally speaking, recent green bars could mean more upside is ahead.

Now, let’s check out technical action grabbing my attention:

Outperformance is important for leading stocks.

Regeneron Fundamental Analysis

Next, it’s a good idea to check under the hood. Meaning, I want to make sure the fundamental story is strong too. As you can see, Regeneron has been growing sales and earnings at double-digit rates. Take a look:

  • 3-year sales growth rate (+38.1%)
  • 3-year EPS growth rate (+62.7%)

Source: FactSet

Marrying great fundamentals with technically superior stocks is a winning recipe over the long-term.

In fact, REGN has been a top-rated stock at my research firm, MAPsignals, for years. That means the stock has buy pressure, strong technicals, and growing fundamentals. We have a ranking process that showcases stocks like this on a weekly basis.

REGN has a lot of qualities that are attracting Big Money. It’s made the Top 20 report 49 times since 2012, with its first appearance on 10/02/2012…and gaining 334.3% since. The blue bars below show when Regeneron was a top pick:

Source: www.mapsignals.com

It’s been a top stock in the health care sector according to the MAPsignals process. I wouldn’t be surprised if REGN makes additional appearances in the years to come. Let’s tie this all together.

Regeneron Price Prediction

The Regeneron rally could have further to go. Big Money buying in the shares is signaling to take notice. Shares could be positioned for further upside. Given the historical gains in share price and strong fundamentals, this stock could be worth a spot in a diversified portfolio.

Disclosure: the author holds no positions in REGN at the time of publication.

Learn more about the MAPsignals process here.

Contact

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Brace Yourself For Another Wild Month In Stock Markets

For the year, the Dow is down -6%, the S&P 500 is down just over -9%, and the Nasdaq has lost -14.7%. The previous record-holder is January 2009, an ugly moment for the economy, when the stock market fell -8.6%. In addition, the VIX – aka the CBOE Volatility Index – has actually dropped back to around 31 after topping 37 earlier this week, its highest point since November 2020.

Keep in mind, the index isn’t registering anywhere close to levels reached during other periods of “extreme” volatility. For example, the index, which is measured between zero and 100, hit its highest point of almost 83 during the financial crisis in 2008. Its most extreme point during the pandemic was around 66 in March 2020. So, by comparison, this week’s volatility has been rather mild.

Federal Reserve

Some insiders equate the wild swings in stock prices to investors, particularly “big money,” trying to establish a new baseline for stock valuations minus the Fed’s easy money policies that have driven a massive amount of cash into markets since the pandemic began in 2020.

At its height, the Fed was pumping as much as +$120 billion per month into the system via its asset purchase program, ballooning its balance sheet to now nearly $9 trillion.

At the same time, the Fed has held its benchmark rate at near-zero and, before that, hadn’t even attempted to raise rates since 2018, and then only briefly. The last full-cycle of rate hikes was 2015. What’s more, investors haven’t really had to factor for inflation since the early 90s and it hasn’t been this high since the 80s.

Bottom line, whatever the new “normal” ends up looking like, it will be dramatically different from the pre-pandemic investing landscape. I’ve heard several large stock traders saying it seems to be the return of Alpha instead of the race to levered Beta. I hear others on Wall Street referencing it to a bit of league recreational youth baseball team where everybody now gets an award simply for participation, but then kids run into a rude awakening when performance really starts to matter.

It feels like we are there in the stock market; every business that was coming into the market was simply being rewarded with participation points, now people are starting to keep a real scorebook and counting the strikeouts and runs scored.

Economy still roars

The good news is that the U.S. economy continues to roar. Historically, a combination of moderate inflation and moderate interest rates has led to some of the biggest boom times for U.S. Last week, the Commerce Department said Q4 Gross Domestic Product (GDP) grew at an annualized rate of +6.9%, stronger than Q3’s +2.3% and well above Wall Street expectations of around +5.7% growth.

Consumer spending climbed at a +3.3% annual pace led by a +4.7% increase in services spending. But the real stand out was private investment which rocketed +32% higher, boosted by a surge in business inventories as companies stocked up to meet higher customer demand. Rising inventories, in fact, contributed nearly +5% to Q4 GDP growth.

On the one hand, the inventory build is positive because it indicates an easing of supply chain dislocations that should in turn help with inflation pressures. On the other hand, many economists note that the big boost from retailer and wholesaler restocking is not likely to be repeated.

Companies will also likely start to unwind at least some of that inventory in the quarters ahead, which could drag overall 2022 GDP, especially if consumer spending also drops off. And investors are more closely tracking consumer behavior as inflation continues to rise.

With consumer spending accounting for about 70% of the U.S. economy, any signs that belts are tightening or moods are getting overly pessimistic will likely set off some alarm bells.

Data to watch

Turning to next week, it will be another busy one for both key economic data as well as earnings. The main economic data highlight will be the January Employment Situation on Friday. Other key data includes ISM Manufacturing, Construction Spending, and the JOLTS report on Tuesday; ADP’s private payrolls report on Wednesday; Productivity & Costs, Factory Orders, and the ISM Non-Manufacturing Index on Thursday.

Earnings wise, results are due from NXP Semiconductor and Trane on Monday; Advanced Micro Devices, Alphabet, Amgen, Chubb, Electronic Arts, Exxon, General Motors, Gilead Sciences, Match Group, PayPal, Sirius XM, Starbucks, and UPS on Tuesday; AbbVie, Aflac, Allstate, Boston Scientific, CNH, Corteva, D.R. Horton, Ferrari, Humana, Johnson Controls, Meta (Facebook), MetLife, Novartis, Novo Nordisk, Qualcomm, Siemens, Thermo Fisher, TMobile, and Waste Management on Wednesday; Activision Blizzard, Amazon, Biogen, Carlyle Group, Check Point, Cigna, Clorox, ConocoPhillips, Deckers Outdoors, Eli Lilly, Estee Lauder, Ford, Hanesbrands, Hershey, Honeywell, Ingredion, Merck, Pinterest, Quest Diagnostics, Royal Dutch Shell, Snap, SnapOn, Wynn Resorts, and Xylem on Thursday; and BristolMyersSquibb, CBOE, Phillips 66, Regeneron, and Sanofi on Friday.

Bottom line, brace for another huge week of extreme volatility.

Best ETFs For June 2021

A portfolio of outlier stocks can become chock full of monster gains for years to come, if chosen wisely.

But wouldn’t it be great if there was already a collection of outliers we could buy without even having to think about it?

Well maybe there is a way to do just that… through outlier ETFs.

So, here I’m going to give you the best ETFs that big money is getting involved in this month.

First thing’s first: to find them, I looked at all the ETFs making Big Money signals. I did that by heading over to MAPsignals.com and then looked at the Big Money ETF Buys and Sells chart. I looked at days with the biggest buying, circled here:

Once I had all the ETFs, I wanted to know which were the best potential opportunities. ETFs are baskets of stocks. And because MAPsignals scores over 6,000 stocks every day, as long as I know which stocks make up the ETFs, I can rank them all.

Here are the 5 best ETFs with scores: The Composite score, Technical score, and Fundamental score. These were computed by accounting for each components stock’s score and its associated weighting in the ETF. (keep in mind that weightings will change from time to time)

Below we see each ETF, their recent Big Money activity, and their scores. XLF, ITB, and XLC are top ranked ETFs. That makes sense because financials, home builders, and communications stocks have been leading the market much of this year so far.

IGV and ARKG, however, rank low on our list of ETFs. But there is opportunity here because the low scores are due to weak technicals. Big Money has been selling these ETFs, largely because they are heavily concentrated in growth stocks. But these stocks have excellent fundamentals: growing sales and earnings and big profits. These weak ETFs represent great potential bargains.

Let’s quickly look at the year-to-date performance of these 5 ETFs:

  • XLF +29.3%
  • ITB +29.2%
  • XLC +13.5%
  • IGV -4.0%
  • ARKG -18.1%

Now let’s quickly look at Big Money buying in the ETFs. Each chart below has many green bars which represents unusually large buying. The few red bars represent unusually large selling. What jumps out is the huge buying in all the ETFs.

Only with IGV and ARKG, there was recent selling too. But again, selling on ETFs and stocks with great fundamentals represents a value opportunity.

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

Here’s why I like these ETFs: they are highly concentrated with fundamentally superior stocks. Below we see a table of three stocks in each ETF. They are some of the highest weightings in each.

Notice their fundamental scores are very strong on a scale from 0-100. This means strong growing sales, earnings, and profits over one and three years. This is how MAPsignals boils down all its fundamental research into one elegant score.

Now with XLF, ITB, and XLC – we see the stocks also have strong technical scores. That means Big Money has been pouring into them, lifting them to new highs. They are buoyant with Big Money support. But in IGV and AKG, we see weak technical scores. This means Big Money has been exiting the stocks.

But before you get spooked, let’s keep the recent environment in mind: Growth has fallen out of favor while value and reopen stocks have become all the rage. But it’s essential to remember these growth companies create phenomenal products and services enhancing our lives. I don’t foresee that stopping in the future. The recent selling is temporary and thematic.

What really drives this home is looking at how long-term Big Money buying can lead to monstrous gains. Below are charts showing all the instances these stocks were Top stocks in our research since 2015: our weekly report of outliers. We don’t need to go into details on each chart.

I’d like you to notice a few things:

  • When Big Money buying pours in, stocks go up
  • Repeated outliers, especially for years often means outsized gains

Owning outlier stocks is the way I try to beat markets. Easy exposure to many stocks can be achieved by buying ETFs. But just like anything, you must be in the 1% if you want to be in the 1%.

We can find outlier ETFs by tracking the Big Money. But that alone isn’t enough: when we catalog the components and find outlier stocks underneath… that’s the winning recipe.

So, there you have it: the 5 best ETFs that Big Money has been trafficking in recently. Outlier ETFs hold outlier stocks. Finding them is the key to finding potentially outlier gains.

Now let’s look at what those look like:

Source: www.mapsignals.com, End of day data sourced from Tiingo.com

The Bottom Line

XLF, ITB, XLC, IGV, & ARKG represent top ETFs for June 2021. Financials, homebuilders, & Communications stocks have performed well lately, which should continue. Software and Genomics companies have reached interesting levels, too. Paying attention to the fundamental quality of ETF constituents is paramount.

To learn more about MAPsignals’ Big Money process please visit: www.mapsignals.com

Disclosure: the author holds long positions GOOGL, CRM, & REGN in managed accounts, but no positions in XLF, ITB, XLC, IGV, ARKG, BLK, SCHW, SPGI, DHI, LEN, LOW, FB, ATVI, ADBE, MSFT, TDOC, & VRTX at the time of publication.

Investment Research Disclaimer

Regeneron Pharmaceuticals Tops Profit Estimates; Stock Has Over 30% Upside Potential

Westchester County, New York-based biotechnology company, Regeneron reported better-than-expected profit in the fourth quarter, largely driven by a rebound in demand for its eye drug, sending its shares up over 3% on Friday.

Regeneron said its fourth-quarter 2020 revenues increased 30% to $2.42 billion and GAAP diluted EPS was $10.24 per share and non-GAAP diluted EPS was $9.53 per share. That was higher than the Wall Street consensus estimate of $8.23 per share.

Following this upbeat result, Regeneron shares, which surged over 28% in 2020, rose as much as 3.2% to $514.97 on Friday.

Executive Comments

“In 2021, in addition to our ongoing work on COVID-19, we expect further diversified growth driven by continued EYLEA momentum, expanded approvals and increased market penetration for Dupixent, and new launches for Libtayo in oncology. We anticipate U.S. regulatory action for Libtayo in both non-small cell lung cancer and basal cell carcinoma within the next month – and anticipate additional readouts later this year from across our oncology pipeline, including the bispecific platform,” said Leonard S. Schleifer, M.D., Ph.D., President and Chief Executive Officer of Regeneron.

Regeneron Stock Price Forecast

Fourteen analysts who offered stock ratings for Regeneron in the last three months forecast the average price in 12 months at $673.55 with a high forecast of $793.00 and a low forecast of $553.00.

The average price target represents a 32.63% increase from the last price of $507.86. From those 14 analysts, 11 rated “Buy”, three rated “Hold”, and none rate “Sell”, according to Tipranks.

Morgan Stanley gave a base target price of $553 with a high of $975 under a bull scenario and $407 under the worst-case scenario. The firm currently has an “Equal-weight” rating on the biotechnology company’s stock.

“We are Equal-weight Regeneron as we believe potential upside factors such as success from Libtayo in NSCLC and the early stage bi-specific pipeline, is offset by potential risks from international reference pricing and pressures to Eylea,” said Matthew Harrison, equity analyst at Morgan Stanley.

Several other analysts have also recently commented on the stock. Credit Suisse raised the price target to $758 from $736. Citigroup upped the price objective to $584 from $575. Benchmark upgraded stock’s rating to buy from hold and set $590 price target. BofA Global Research lowered price objective to $595 from $625. Bernstein cut price target to $600 from $700.

Check out FX Empire’s earnings calendar

Regeneron Nears Chart Support After Antibody Cocktail Approval

Regeneron Pharmaceuticals, Inc. (REGN) gained 0.94% Monday after The Food and Drug Administration (FDA) fast-tracked emergency authorization over the weekend of the biopharmaceutical company’s coronavirus dual monoclonal antibody treatment REGN-COV2.

The experimental therapy – given to President Trump when he contacted the deadly disease last month – works by binding antibodies to the coronavirus’ spike protein, limiting the ability of viruses to escape. In other words, the therapy attempts to speed up a patient’s immune system in preparation to fight the disease at its onset. Although the cocktail of drugs continues to undergo testing, the FDA said early results suggest the drug may reduce COVID-19-related hospitalization or emergency visits in patients at high risk for disease progression.

The development comes as the United States on Sunday reported 142,732 new infections and registered a record number of hospitalizations for the 13th consecutive day. “The emergency authorization of these monoclonal antibodies administered together offers health care providers another tool in combating the pandemic,” Patrizia Cavazzoni, M.D., acting director of the FDA’s Center for Drug Evaluation and Research, told the Wall Street Journal.

As of Nov. 24, 2020, Regeneron has a market capitalization of $55.87 billion and trades nearly 10% lower over the last month. However, the shares have returned 39.45% year to date (YTD). From a valuation standpoint, the company trades at a 41% discount to its five-year forward earnings multiple of around 22 times.

Wall Street View

Truist analyst Robyn Karnauskas raised the firm’s price target on Regeneron earlier this month to $770 from $750 while reiterating a ‘Buy’ rating. Karnauskas cited the company’s impressive Q3 Eylea and Dupi sales, as well as its pipeline execution ability during the pandemic, for the price upgrade. She also believes multiple potential approvals in 2021 will support further upside.

Sentiment elsewhere on the Street remains mostly bullish. The stock receives 13 ‘Buy’ ratings, 2 ‘Overweight’ ratings, and 11 ‘Hold’ ratings. Price targets range between $793 and $550, with the median 12-month target pegged at $675. This implies a healthy premium of 29% to Monday’s $523.61 close.

Technical Outlook and Trading Tactics

Since topping out at nearly $665 a share in mid-July, the price has traded mostly sideways to lower as investors waited for testing results of the company’s COVID-19 treatments. More recently, the stock slipped below the closely watched 200-day simple moving average (SMA) last week but found buying support yesterday near a four-month horizontal trendline.

Those who anticipate a reversal at these levels should target a move back to the 52-week/ATH at $664.64 while protecting capital with a stop-loss order placed beneath the November low at $509.34.

For a look at today’s earnings schedule, check out our earnings calendar.