Sophisticated Investors Should Avoid: Navient Corporation (NAVI), Ra Medical Systems Inc. (RMED)

Navient Corporation (NASDAQ: NAVI) shares are -32.68% down in the year-to-date (YTD) period and have moved 5.38% or $0.47 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +126.29% lower. Comparatively, the stock is -40.58% down YTD and 23.79% over the trailing 3-month period. If we look at the shorter duration, its week performance is 6.47% and 12.52% over the month.

Analyst Recommendations

On March 17, 2020, Barclays recommended the NAVI stock is a Overweight, while earlier, Stephens had Upgrade the stock as a Overweight on April 09, 2020. 10 analysts offering the recommendations for the stock have a consensus rating of 2.10 to suggest that the NAVI stock is a “Moderate Buy. 0 of the 10 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 6 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $9.21 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $11.15. The forecasts give the Navient Corporation stock a price target range of $14.00 on the higher side while at least one analyst think the stock could plunge to a low of $8.00. The two limits represent an upside potential of 34.21% or -15.13%.

Earnings Forecast

Analysts estimate the earnings to increase 95.70% in the current quarter to $0.78, up from the $0.62 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $2.91, up 0.40% from $2.6 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.68 and $0.78. Wall Street estimates earnings per share to be at an average of $2.9 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 22 over the last 12 months, while SEC filings reveal that there have been 22 insider sales over the same period. Insiders have purchases 802,607 shares while those sold by company executives and officers stand at 262,572. The last 3 months have seen insiders trade a total of 56,000 and 0 in purchases and sales respectively.

REMONDI JOHN F, a Chief Executive Officer at the company, bought 50,000 shares worth $0.39 million at $7.82 per share on Jul 31. The Director had earlier bought another 6,000 NAVI shares valued at $52860.0 on Aug 13. The shares were bought at $8.81 per share. ARNOLD FREDERICK (Director) bought 6,500 shares at $6.66 per share on May 13 for a total of $43287.0 while UNGER LAURA S, (Director) bought 3,000 shares on May 06 for $21750.0 with each share fetching $7.25.

Ra Medical Systems Inc. (NYSE:RMED), on the other hand, is trading around $0.33 with a market cap of $22.02M and analyst research firms have a negative stance on its shares. Some analysts are even forecasting -$1 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the Ra Medical Systems Inc. (RMED) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

RMED’s operating expenses over the recent quarter were at $10.02 million. This represented a -1012.89% of the company’s total revenues which amounted $0.9 million. With this in place, we can see that the company’s diluted EPS declined -$0.43 on the year-over-year period, shrinking to -$1.16 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $40.69 million from $36.3 million over the previous quarter. Short term investments amounted to $0.0 while total current assets were at $33.78 million. The cash flow from operating activities totaled -$12.84 million, significantly higher than the -$15.75 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$12.89 million.

Insider activity

Insiders have transacted a total of 17 times at Ra Medical Systems Inc. over the last 6 months, with insider purchases undertaken 14 times and accounting for 340,000 shares. Insider sales totaled 130,800 shares over the same period, with these deals completed in 3 transactions. Looking at these numbers, we realize that net purchases over that period are 11.0 shares. Insiders now hold a total of 32.08M shares after the latest sales, with 0.70% net shares purchased.

Major holders

Insiders own 0.80% of the company shares, while shares held by institutions stand at 7.80% with a share float percentage of 58.71M. Investors are also buoyed by the number of investors in a company, with Ra Medical Systems Inc. having a total of 27 institutions that hold shares in the company. The top two institutional holders are Renaissance Technologies, LLC with over 0.87 million shares worth more than $0.43 million. As of Jun 29, 2020, Renaissance Technologies, LLC held 1.20% of shares outstanding.

The other major institutional holder is Alethea Capital Management, LLC, with the investment firm holding over 0.53 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $0.26 million and represent 0.73% of shares outstanding.