Investing action plan for Cytokinetics Incorporated (CYTK) And Sunrun Inc. (RUN)

Cytokinetics Incorporated (NASDAQ: CYTK) shares are 129.31% up in the year-to-date (YTD) period and have moved 2.92% or $0.69 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +204.13% lower. Comparatively, the stock is -16.68% down YTD and 16.41% over the trailing 3-month period. If we look at the shorter duration, its week performance is 0.37% and 7.32% over the month.

Analyst Recommendations

On May 05, 2020, Mizuho recommended the CYTK stock is a Buy, while earlier, Raymond James had Initiated the stock as a Strong Buy on July 10, 2020. 8 analysts offering the recommendations for the stock have a consensus rating of 1.90 to suggest that the CYTK stock is a “Strong Buy. 0 of the 8 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 8 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $24.33 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $40.25. The forecasts give the Cytokinetics Incorporated stock a price target range of $59.00 on the higher side while at least one analyst think the stock could plunge to a low of $31.00. The two limits represent an upside potential of 58.76% or 21.52%.

Earnings Forecast

Analysts estimate the earnings to decrease -19.30% in the current quarter to -$0.56, down from the -$0.5 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$2.3, down -28.20% from -$2.11 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.62 and -$0.15. Wall Street estimates earnings per share to be at an average of -$1.99 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 51 over the last 12 months, while SEC filings reveal that there have been 65 insider sales over the same period. Insiders have purchases 863,895 shares while those sold by company executives and officers stand at 1,432,283. The last 3 months have seen insiders trade a total of 181,638 and 182,237 in purchases and sales respectively.

Jaw Ching, a SVP Finance & CFO at the company, sold 25,000 shares worth $0.63 million at $25.00 per share on Aug 21. The SVP – Legal & General Counsel had earlier sold another 10,000 CYTK shares valued at $0.25 million on Aug 21. The shares were sold at $25.00 per share. Blum Robert I (President & CEO) sold 5,000 shares at $23.48 per share on Aug 18 for a total of $0.12 million while Malik Fady Ibraham, (EVP Research & Development) sold 599 shares on Aug 13 for $13088.0 with each share fetching $21.85.

Sunrun Inc. (NASDAQ:RUN), on the other hand, is trading around $55.51 with a market cap of $6.42B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $50.61 and spell out a less modest performance – a -9.68% return. Some analysts are even forecasting $0.21 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

RUN’s operating margin was negative on the trailing 12 months basis, remaining steady at -30.00%, while the operating expenses over the recent quarter were at $50.72 million. This represented a 72.02% of the company’s total revenues which amounted $181.29 million. With this in place, we can see that the company’s diluted EPS declined -$1.12 on the year-over-year period, shrinking to -$0.90 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 $6.01 billion from $5.94 billion over the previous quarter. The cash flow from operating activities totaled -$152.25 million, significantly lower than the -$56.62 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$516.67 million.

Insider activity

Insiders have transacted a total of 80 times at Sunrun Inc. over the last 6 months, with insider purchases undertaken 31 times and accounting for 1,220,390 shares. Insider sales totaled 1,070,153 shares over the same period, with these deals completed in 49 transactions. Looking at these numbers, we realize that net purchases over that period are -18.0 shares. Insiders now hold a total of 6.61M shares after the latest sales, with 2.50% net shares purchased.

Major holders

Insiders own 4.40% of the company shares, while shares held by institutions stand at 96.20% with a share float percentage of 116.76M. Investors are also buoyed by the number of investors in a company, with Sunrun Inc. having a total of 306 institutions that hold shares in the company. The top two institutional holders are Tiger Global Management, LLC with over 29.77 million shares worth more than $587.13 million. As of Jun 29, 2020, Tiger Global Management, LLC held 24.17% of shares outstanding.

The other major institutional holder is Blackrock Inc., with the investment firm holding over 17.19 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $338.9 million and represent 13.95% of shares outstanding.