Sophisticated Investors Should Avoid: Sorrento Therapeutics Inc. (SRNE), Avinger Inc. (AVGR)

Sorrento Therapeutics Inc. (NASDAQ: SRNE) shares are 136.98% up in the year-to-date (YTD) period and have moved -3.26% or -$0.27 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +416.77% lower. Comparatively, the stock is -58.69% down YTD and 67.92% over the trailing 3-month period. If we look at the shorter duration, its week performance is -1.35% and -10.20% over the month.

Analyst Recommendations

On May 26, 2020, Dawson James recommended the SRNE stock is a Buy, while earlier, H.C. Wainwright had Reiterated the stock as a Buy on July 31, 2020. 2 analysts offering the recommendations for the stock have a consensus rating of 2.00 to suggest that the SRNE stock is a “Moderate Buy. 0 of the 2 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 2 recommend buying, with 0 rating it as an Overweight.

The stock currently trades at $8.01. The forecasts give the Sorrento Therapeutics Inc. stock a price target range of $30.00 on the higher side while at least one analyst think the stock could plunge to a low of $21.00. The two limits represent an upside potential of 73.3% or 61.86%.

Earnings Forecast

Analysts estimate the earnings to decrease -63.60% in the current quarter to -$0.2, up from the -$0.5 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $4.96, up 6,412.00% from -$2.2 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.13 and $11.71. Wall Street estimates earnings per share to be at an average of $3.44 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 1 over the last 12 months, while SEC filings reveal that there have been 0 insider sales over the same period. Insiders have purchases 40,000 shares while those sold by company executives and officers stand at 0. The last 3 months have seen insiders trade a total of 0 and 0 in purchases and sales respectively.

The Director had earlier bought another 40,000 SRNE shares valued at $90896.0 on Mar 05. The shares were bought at $2.27 per share.

Avinger Inc. (NASDAQ:AVGR), on the other hand, is trading around $0.48 with a market cap of $38.97M and analyst research firms have a negative stance on its shares. Some analysts are even forecasting -$0.92 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

AVGR’s operating expenses over the recent quarter were at $4.06 million. This represented a -176.81% of the company’s total revenues which amounted $1.47 million. With this in place, we can see that the company’s diluted EPS declined -$0.18 on the year-over-year period, shrinking to -$0.87 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 $28.88 million from $22.8 million over the previous quarter. The cash flow from operating activities totaled -$8.39 million, significantly higher than the -$9.62 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$8.39 million.

Insider activity

Insiders have transacted a total of 12 times at Avinger Inc. over the last 6 months, with insider purchases undertaken 12 times and accounting for 32,871 shares. Insider sales totaled 0 shares over the same period, with these deals completed in 0 transactions. Looking at these numbers, we realize that net purchases over that period are 12.0 shares. Insiders now hold a total of 266.8k shares after the latest sales, with 16.50% net shares purchased.

Major holders

Insiders own 0.20% of the company shares, while shares held by institutions stand at 8.10% with a share float percentage of 54.25M. Investors are also buoyed by the number of investors in a company, with Avinger Inc. having a total of 24 institutions that hold shares in the company.