Investing action plan for Tilray Inc. (TLRY) And AXT Inc. (AXTI)

Tilray Inc. (NASDAQ: TLRY) shares are -62.35% down in the year-to-date (YTD) period and have moved -3.87% or -$0.26 lower in the latest trading session. However, stock’s trailing 12-month performance remains nearly +165.43% lower. Comparatively, the stock is -71.90% down YTD and -36.01% over the trailing 3-month period. If we look at the shorter duration, its week performance is -2.57% and -13.19% over the month.

Analyst Recommendations

On April 16, 2020, Jefferies recommended the TLRY stock is a Underperform, while earlier, The Benchmark Company had Reiterated the stock as a Buy on May 12, 2020. 17 analysts offering the recommendations for the stock have a consensus rating of 3.10 to suggest that the TLRY stock is a “Hold. 1 of the 17 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 $6.45 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $8.58. The forecasts give the Tilray Inc. stock a price target range of $15.00 on the higher side while at least one analyst think the stock could plunge to a low of $6.00. The two limits represent an upside potential of 57.0% or -7.5%.

Earnings Forecast

Analysts estimate the earnings to decrease -140.70% in the current quarter to -$0.22, up from the -$0.36 reported in the same quarter a year ago. For the current year, earnings should grow to an average of -$2.62, up 33.40% from -$3.2 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between -$0.27 and -$0.12. Wall Street estimates earnings per share to be at an average of -$0.6 for the next year.

Insider Transactions Summary

According to SEC data, total insider shares purchases at the company stands at 48 over the last 12 months, while SEC filings reveal that there have been 31 insider sales over the same period. Insiders have purchases 4,392,704 shares while those sold by company executives and officers stand at 2,934,464. The last 3 months have seen insiders trade a total of 302,050 and 1,717,149 in purchases and sales respectively.

Auerbach Michael, a Director at the company, sold 75,526 shares worth $0.55 million at $7.27 per share on Aug 03. The Director had earlier sold another 5,000 TLRY shares valued at $36370.0 on Aug 03. The shares were sold at $7.27 per share. Auerbach Michael (Director) sold 279,608 shares at $7.28 per share on Aug 03 for a total of $2.03 million while Kennedy Brendan, (President and CEO) sold 116,668 shares on Jul 16 for $0.9 million with each share fetching $7.69.

AXT Inc. (NASDAQ:AXTI), on the other hand, is trading around $6.05 with a market cap of $249.38M and analyst research firms have a positive stance on its shares. Analysts predict that the stock will reach $8.03 and spell out a more modest performance – a 24.66% return. Some analysts are even forecasting $0.04 per share in earnings this year on a short term (1 year) basis.

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

Company balance sheet and cash flow

AXTI’s operating margin was negative on the trailing 12 months basis, remaining steady at -4.40%, while the operating expenses over the recent quarter were at $6.66 million. This represented a 69.93% of the company’s total revenues which amounted $22.13 million. With this in place, we can see that the company’s diluted EPS inclined $0.01 on the year-over-year period, growing to $0.04 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 $226.22 million from $222.64 million over the previous quarter. Short term investments amounted to $5.25 million while total current assets were at $110.73 million. The cash flow from operating activities totaled $1.98 million, significantly lower than the $5.95 million reported in the year-ago quarter. The company’s free cash flow for the quarter was -$4.48 million.

Insider activity

Insiders have transacted a total of 10 times at AXT Inc. over the last 6 months, with insider purchases undertaken 5 times and accounting for 151,636 shares. Insider sales totaled 41,800 shares over the same period, with these deals completed in 5 transactions. Looking at these numbers, we realize that net purchases over that period are 0.0 shares. Insiders now hold a total of 2.48M shares after the latest sales, with 5.00% net shares purchased.

Major holders

Insiders own 5.50% of the company shares, while shares held by institutions stand at 66.00% with a share float percentage of 38.51M. Investors are also buoyed by the number of investors in a company, with AXT Inc. having a total of 117 institutions that hold shares in the company. The top two institutional holders are Dimensional Fund Advisors LP with over 3.28 million shares worth more than $15.63 million. As of Jun 29, 2020, Dimensional Fund Advisors LP held 8.01% of shares outstanding.

The other major institutional holder is Blackrock Inc., with the investment firm holding over 2.72 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $12.95 million and represent 6.64% of shares outstanding.