Sophisticated Investors Should Avoid: T2 Biosystems Inc. (TTOO), Vivint Solar Inc. (VSLR)

T2 Biosystems Inc. (NASDAQ: TTOO) shares are 32.48% up in the year-to-date (YTD) period and have moved 0.65% or $0.01 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +559.57% lower. Comparatively, the stock is -32.90% down YTD and 70.29% over the trailing 3-month period. If we look at the shorter duration, its week performance is 6.90% and -4.91% over the month.

Analyst Recommendations

On August 01, 2019, Alliance Global Partners recommended the TTOO stock is a Neutral, while earlier, Janney had Downgrade the stock as a Neutral on November 26, 2019. 3 analysts offering the recommendations for the stock have a consensus rating of 1.50 to suggest that the TTOO stock is a “Strong Buy. 0 of the 3 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 3 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $1.55. The forecasts give the T2 Biosystems Inc. stock a price target range of $4.00 on the higher side while at least one analyst think the stock could plunge to a low of $3.00. The two limits represent an upside potential of 61.25% or 48.33%.

Earnings Forecast

Analysts estimate the earnings to increase 40.00% in the current quarter to -$0.08, up from the -$0.31 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$0.43, up 126.80% from -$1.3 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.09 and -$0.07. Wall Street estimates earnings per share to be at an average of -$0.27 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 13 over the last 12 months, while SEC filings reveal that there have been 12 insider sales over the same period. Insiders have purchases 273,286 shares while those sold by company executives and officers stand at 129,505. The last 3 months have seen insiders trade a total of 0 and 0 in purchases and sales respectively.

Barclay Alec, a SVP, Operations at the company, sold 5,808 shares worth $4763.0 at $0.82 per share on Feb 24. The Chief Financial Officer had earlier sold another 4,166 TTOO shares valued at $3416.0 on Feb 24. The shares were sold at $0.82 per share. Gibbs Michael Terrence (General Counsel) sold 5,808 shares at $0.82 per share on Feb 24 for a total of $4763.0 while Lowery Thomas J., (Chief Scientific Officer) sold 5,808 shares on Feb 24 for $4763.0 with each share fetching $0.82.

Vivint Solar Inc. (NYSE:VSLR), on the other hand, is trading around $30.52 with a market cap of $3.60B and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $20.38 and spell out a less modest performance – a -49.75% return. Some analysts are even forecasting -$0.05 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

VSLR’s operating margin was negative on the trailing 12 months basis, remaining steady at -49.80%, while the operating expenses over the recent quarter were at $73.5 million. This represented a 30.92% of the company’s total revenues which amounted $106.39 million. With this in place, we can see that the company’s diluted EPS declined -$0.01 on the year-over-year period, shrinking to -$0.24 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 $3.11 billion from $2.86 billion over the previous quarter. The cash flow from operating activities totaled -$150.76 million, significantly lower than the -$141.08 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$153.69 million.

Insider activity

Insiders have transacted a total of 56 times at Vivint Solar Inc. over the last 6 months, with insider purchases undertaken 17 times and accounting for 299,675 shares. Insider sales totaled 12,626,195 shares over the same period, with these deals completed in 39 transactions. Looking at these numbers, we realize that net purchases over that period are -22.0 shares. Insiders now hold a total of 5.67M shares after the latest sales, with -68.30% net shares purchased.

Major holders

Insiders own 1.70% of the company shares, while shares held by institutions stand at 97.30% with a share float percentage of 120.68M. Investors are also buoyed by the number of investors in a company, with Vivint Solar Inc. having a total of 153 institutions that hold shares in the company. The top two institutional holders are Blackstone Group Inc. with over 69.62 million shares worth more than $689.23 million. As of Jun 29, 2020, Blackstone Group Inc. held 55.47% of shares outstanding.

The other major institutional holder is FMR, LLC, with the investment firm holding over 17.45 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $172.79 million and represent 13.91% of shares outstanding.