The International Monetary Fund (“IMF”) came out with some grim news this morning, slashing economic forecasts again, and warning that the massive amounts of debt and deteriorating public finances are going to have a much larger effect than initially thought. The IMF now thinks that global GDP will fall 4.9%, as opposed to the 3% fall predicted in April of this year. In addition, they lowered their rebound call for 2021, thinking that the recovery will show growth of 5.4% in 2021 versus 5.8%, projected in April. The US, specifically, is expected to show an 8% drop in GDP for 2020, much worse than the 5.9% expected back in April. Markets (finally) pulled back on the news, but valuations are still extremely rich. If you’re looking for some hedges for your portfolio or are looking to shift against the market, our deep learning algorithms and Artificial Intelligence (“AI”) technology has several Top Shorts for you today.
Agenus Inc (AGEN)
First on the list is Agenus Inc., a small cap American biotechnology company, mainly targeting immuno-oncology treatments. Our AI systems have identified factor scores of F in Technical, C in Momentum Volatility, and D in Quality Value for the stock that has gained 2.72% for the year. Of course, the longer-term downtrend is firmly intact for the stock, as it looks to make the next leg lower. As for the financials, revenue did grow by 98.83% over the last three fiscal years and was $150M, growing from $42.9M three years ago. Operating income, though, was negative $(64.3)M in the last fiscal year, better than the $(107)M three years ago but still not positive. EPS was also a miss with a loss of $(0.8) in the last fiscal year, compared to $(1.23) three years ago. Forward 12M revenue is expected to grow by 31.12%. Use the recent spike higher in the stock price to get short the company.
Amyris Inc (AMRS)
Next on the Top Short list is Amyris Inc., an industrial biotechnology company engaged in the engineering, manufacturing, and sales of products in a variety of consumer and industrial markets, which includes cosmetics, flavors and fragrances, solvents and cleaners, among many others. Our deep learning algorithms have identified factor scores of D in Technical, F in Momentum Volatility, and F in Quality Value for the stock that has gained 38.11% for the year. Don’t buy the hype, according to our AI. Revenue grew by 9.63% in the last fiscal year to $152.6M, and grew by 31.01% over the last three fiscal years from $127.7M. Operating income grew by 14.54% in the last fiscal year but was still massively negative at $(121.7)M, which is much worse than the $(56.1)M loss three years ago. EPS grew by 9.88% in the last fiscal year but was still a negative $(2.67), but did improve and grew by 61.18% over the last three fiscal years from $(6.26). Forward 12M revenue is expected to grow by 13.2%.
Inspired Entertainment (INSE)
Following those small cap companies in the Top Short list is Inspired Entertainment, a gaming technology company based in the US. They develop Virtual Sports and Server-Based Gaming systems with associated terminals and digital content, but our AI systems have identified factor scores of F in Technical, F in Growth, D in Momentum Volatility, and C in Quality Value. The stock has lost 57.42% for the year already, but the next leg looks likely to go lower. Revenue grew by 12.13% in the last fiscal year to $153.4M and grew by 40.41% over the last three fiscal years from $122.5M. EPS grew by 17.16% over the last three fiscal years, but was negative $(1.69) in the last fiscal year, comparing to $(2.2) three years ago. Operating income has been trending worse, coming in at $(2.2)M in the last fiscal year compared to $1.8M three years ago.
Opgen Inc (OPGN)
Opgen Inc is another Top Short today with factor scores of C in Technical, F in Momentum Volatility, and D in Quality Value. The company operates in the precision medicine space, harnessing the power of molecular diagnostics and information to help combat infectious diseases. However, the market has not been kind to the stock long-term. Year-to-date, however, there has been an opportunity given to short sellers as the stock has gained 72.07%. Operating income grew by 2.21% in the last fiscal year but was negative $(10.97)M, which was a growth of 29.72% over the last three fiscal years from $(15.27)M. EPS grew by 51.3% but was a loss of $(7.7) in the last fiscal year, which represents a growth of 98.09% over the last three fiscal years from $(195.96). Revenue was $3.5M in the last fiscal year compared to $3.21M three years ago. ROE was negative (327.4%) in the last year, better than the (675%) three years ago, but starting from a pretty terrible level. Forward 12M revenue is expected to grow by 36.77%.
RTI Surgical Holdings Inc (RTIX)
Our final Top Short today is RTI Surgical Holdings Inc., a medical devices company that designs, develops, manufactures, and distributes biologic and metal and synthetic implants. However, our AI systems have identified factor scores of F in Technical, D in Momentum Volatility, and C in Quality Value, thinking the trend lower will continue. The financials are worth paying attention to, with revenue at $308.4M in the last fiscal year, compared to $280.3M three years ago. Operating income was a negative $(0.2)M in the last fiscal year, much worse than three years ago when it registered $14.7M. EPS was negative $(2.91) in the last fiscal year compared to $0.05 three years ago. ROE was not any better, coming in at (121.4%) in the last year compared to 2.9% three years ago.