Sometimes when markets crash they expose the stocks with really strong relative strength. That was the case on Friday when the biotech sector fell -5% and the Nasdaq -4% but Exact Sciences actually gained 45 cents. Posting gains in a weak market suggests they will post bigger gains in a bullish market.
NEW BULLISH Plays
EXAS - Exact Sciences - Company Profile
Exact Sciences Corporation, a molecular diagnostics company, focuses on developing products for the early detection and prevention of various cancers. The company develops the Cologuard, a non-invasive stool-based DNA screening test for the early detection of colorectal cancer and pre-cancer. Its Cologuard test includes a protein marker to detect blood in the stool, utilizing an antibody-based fecal immunochemical test. The company has a collaboration, license, and purchase agreement with Genzyme Corporation, as well as with MAYO Foundation for Medical Education and Research for developing tests to detect lung, pancreatic, and esophageal cancers.
Shares of EXAS fell from $18.50 to $7 in October after the U.S. Preventative Services Task Force, an independent panel of health care experts, issued preliminary screening test recommendations that did not include Cologuard as a recommended product. The draft listed Cologuard as an "alternative" screening test. Exact Sciences protested strongly about the classification.
On June 14th, the same task force issued its final cancer screening recommendations and clarified the inclusion of Cologuard. The information was accidentally leaked and the panel had to release the report earlier than the planned June 21st date. With the final recommendation for Cologuard the company has begun advertising strongly and sales should increase. Cologuard is now an A-rated preventative service under the Affordable Care Act.
Earnings July 26th.
Shares have broken out of their 9-month consolidation base and could close the gap back to $18 in the coming weeks.
Buy EXAS shares, currently $11.54, stop loss $9.45.
No options recommended. The August $13 call is $.85.
NEW BEARISH Plays
No New Bearish Plays