For Immediate Release
Chicago, IL – June 21, 2013 – Zacks Equity Research highlights SodaStream (SODA-Free Report) as the Bull of the Day and Statoil (STO-Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on the Nektar Therapeutics (NKTR-Free Report), Johnson & Johnson (JNJ-Free Report) and Pfizer Inc. (PFE-Free Report).
Here is a synopsis of all five stocks:
Although markets have tumbled in the aftermath of the latest FOMC meeting, some sectors have managed to hold up rather well anyways. This is particularly true in the consumer market, as spending remains elevated, and growth levels are high in a number of key corners of the sector.
In particular, smaller companies that have a U.S. focus remain well-positioned for the weeks and months ahead. That is because the global markets continue to crumble in the face of a strong dollar, while the American market continues to look relatively favorable in comparison.
One such company that is a great example of this trend and is looking good for the summer months is SodaStream (SODA-Free Report). The firm continues to grow at a robust pace, and it finds itself in a very strong corner of the stock market as well.
SodaStream has burst onto the scene as an alternative for consumers in the carbonated beverage market. SODA’s main product allows consumers to make their own carbonated beverages at home with a variety of different flavors.
This idea has really caught on lately, as sales for SODA continue to surge. In fact, current EPS growth rates come in above 20% for the current year, and are quickly approaching 30% for the next year as well. The impressive growth rate helps to keep the PEG below one, suggesting that even with a PE approaching 28, SODA is a decent value.
The latest FOMC meeting has had a huge impact on a number of securities around the globe. In particular, companies in the commodity world have been hit extremely hard, as a stronger dollar has dulled the appeal of natural resource producers.
The statement by Bernanke also helped to continue the slide in foreign and dividend paying stocks as well. After all, with rising rates, many are reevaluating their exposure to high dividend payers, while foreign securities are losing their appeal as investors look for safe havens.
While many firms are impacted by at least one of these trends, one firm that is being impacting by all three at once is Statoil (STO-Free Report). As a result, the company could be facing some truly impressive headwinds and may be a strong avoid for now.
In addition to the macroeconomic headwinds, the Norwegian oil producer is facing a host of company specific problems too. Earnings are expected to contract by 12.6% for the current year period, while the next five years look to have earnings slide by -2.3%. This helps to give the company a PEG ratio of -3.46, so don’t be fooled by the firm’s low PE of eight.
This poor growth track record is also partially due to the analyst disdain for the company and the ability of STO to increase earnings in the future. In fact, two estimates have gone down in the past two months, while the full year consensus has slumped from $3.01/share to the current consensus at $2.74/share in the past 90 days.
Nektar's Pain Drug Impresses
Nektar Therapeutics (NKTR-Free Report) recently announced encouraging top-line results from its human abuse liability (HAL) study on NKTR-181. NKTR-181 is being developed for the treatment of moderate-to-severe chronic pain. The news impacted the share price of Nektar positively.
Nektar enrolled 42 recreational drug abusers for the randomized, double-blind, placebo- and active-controlled study. The study measured the “drug-liking” scores on a bi-polar visual analogue scale (:VAS) under each treatment group of NKTR-181 (100 mg, 200 mg and 400 mg), placebo and the widely abused painkiller, oxycodone (40 mg). Nektar mentioned in its conference call that the study was designed as per the US Food and Drug Administration (:FDA)’s recent draft guidance. The company stated that the drug is designed to enter the patient’s bloodstream at a slow pace thereby reducing euphoric feelings that can lead to abuse.
Results from the study showed that "drug liking" and "feeling high" scores were similar in patients treated with NKTR-181 when compared to patients under placebo. The study further revealed that patients under NKTR-181 showed statistically significant lower "drug liking" scores along with reduced "feeling high" scores in comparison to patients treated with oxycodone. The company expects to complete the study soon with results expected this summer.
Data from the study further showed that the sleepiness score was less in all doses of NKTR-181 compared to that of oxycodone.
Nektar is currently evaluating NKTR-181 in a phase II study for the treatment of chronic pain. The company enrolled around 200 opioid naïve patients, suffering from osteoarthritis of the knee. The patients will be randomized to receive either NKTR-181 or placebo.
We remind investors that NKTR-181 currently enjoys fast track designation in the US for the treatment of moderate-to-severe chronic pain. Nektar mentioned in its conference call that there are more than 100 million patients suffering from chronic pain in the US. The management at Nektar believes that the candidate can be a leading product in the opioid market for chronic pain which is worth $12 billion. However, we remind investors that the market for chronic pain currently has big companies like Johnson & Johnson (JNJ-Free Report) and Pfizer Inc. (PFE-Free Report).
Nektar, a biopharmaceutical company, presently carries a Zacks Rank #4 (Sell).
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