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Stock Deconstruction Is TELA Bio's share price a good investment? – CMC Markets

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TELA Bio’s [TELA] share price has been a clear beneficiary from increased interest in the biotech investment theme. Over the past 12 months, the biotech firm’s stock is up 80.75%, having traded in the $14 to $17 range for much of the last three months of 2020 (as of 26 March 2021’s close). 

However, 2021 has seen volatility in the stock, which could present a buying opportunity should TELA Bio and the overall biotech investment theme regain strength. To get a sense of the investment opportunity, we look at TELA Bio’s underlying fundamentals, recent fourth-quarter earnings and the wider market outlook.

80.75%

TELA Bio’s share price rise over the past 12 months

  

How is TELA’s Bio share price performing?

TELA Bio’s share price is largely unchanged after it posted fourth-quarter results on 24 March, closing 26 March at $14.55. In the five days before the results, TELA Bio’s share price slipped circa 8.6%, indicating that traders were pricing in an underwhelming performance this quarter.

Over the past month, the stock has dipped 8.6% (as of 26 March’s close), and 15.7% since hitting a year high of $17.26 on 11 March. For comparison, the wider S&P Biotechnology Select Industry (SPSIBI) is down 12.18% for the month, while the BioTech investment theme has dropped 2.37% according to our thematic ETF screener.

What happened in TELA Bio’s Q4 results?

TELA Bio reported a $0.54 loss per share in the fourth quarter. Wall Street had been expecting a $0.49 loss per share. In the past four quarters, the biotech firm has only once beaten analyst expectations. Despite the miss, this was better than the same period last year when TELA Bio posted a $1.22 loss per share. Revenue came in at $5.67m, up 17% from the $4.86m seen in the same period last year.

Full-year revenue was $18.2m, up 18% from the previous year, while TELA Bio’s net loss rose from $22.4m in 2019 to $28.8m in 2020.

“Despite the many challenges of COVID-19, we continue to see momentum in our business and were able to generate fourth quarter and 2020 revenue growth,” said Antony Koblish, co-founder, president and CEO of TELA Bio.  

$18.2million

TELA Bio’s full-year revenue – a 18% YoY rise

  

Why should investors care?

TELA Bio is a medical technology company that designs and makes tissue reinforcement materials. Its two products are TELA Bio OviTex and the OviTex PRS Reinforced Tissue Matrix, which reinforce materials in hernia repair, plastic and reconstructive surgery.

March saw positive results from its 12-month analysis of OviTex Reinforced Tissue Matrix for the treatment of ventral hernias.  The product is designed to be an alternative to permanent synthetic mesh, which, according to a TELA Bio presentation in February, has resulted in circa 15,000 lawsuits in the US. The February presentation also highlighted a $500m opportunity for OviTexPRS’s use in plastic and reconstructive surgery.

In the near-term, TELA Bio is focused on promoting adoption of OviTex and OviTex PRS products through a targeted sales approach. Overall, TELA Bio estimates its total addressable market is worth circa $2bn.

Is TELA Bio a good investment?

Simply Wall Street points out that TELA Bio had $30m of debt on its books as of September 2020. However, it also had $81.5m in cash, giving it a net cash balance of $51.1m. Overall, Simply Wall Street says TELA Bio “can boast $48.1m more liquid assets than total liabilities”.

“The excess liquidity suggests that TELA Bio is taking a careful approach to debt,” Simply Wall Street noted, adding, “simply put, the fact that TELA Bio has more cash than debt is arguably a good indication that it can manage its debt safely.”

For 2021, TELA Bio expects revenue to come in between $27m and $30m, which would see growth in the range of 48% to 65% year on year.

“The excess liquidity suggests that TELA Bio is taking a careful approach to debt, simply put, the fact that TELA Bio has more cash than debt is arguably a good indication that it can manage its debt safely” – Simply Wall Street

 

“Over the course of 2020, we focused on engaging our customers virtually, optimizing our product portfolio, and completing the 12-month analysis of our patients in our BRAVO study. As a result of these accomplishments and our strong financial position, we believe we are well-positioned to gain market share and accelerate revenue growth over the long term.” 

TELA Bio carries an average $20 analyst price target according to data from Yahoo Finance.  Of the four analysts offering price targets, the stock has two strong buy ratings and two buy ratings. 

Disclaimer Past performance is not a reliable indicator of future results.

CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.

CMC Markets does not endorse or offer opinion on the trading strategies used by the author. Their trading strategies do not guarantee any return and CMC Markets shall not be held responsible for any loss that you may incur, either directly or indirectly, arising from any investment based on any information contained herein.

*Tax treatment depends on individual circumstances and can change or may differ in a jurisdiction other than the UK.

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Nicholas Kyriacopoulos: How to invest properly in 2021 and beyond – mtltimes.ca

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Entrepreneurs like Nicholas Kyriacopoulos know the importance of how to invest during uncertain times, and it would be fair to say that the last year or so has had a few surprises for everyone following investment markets. While this change and volatility can be very profitable for those who make the right decisions, it also makes those right decisions harder to discern.

Nicholas Kyriacopoulos

The fundamentals of good investment have not changed, however, and will continue to help investors in the future:

Keep it simple

Keeping it simple is a good rule for many areas in life, and investment is definitely one of them.

How much time do you really want to spend managing your investment portfolio, and what kind of returns would make that commitment worth it to you?

If your investment portfolio takes careful attention and management to work, you need to be prepared to give it the time it needs. Keeping a simpler portfolio that doesn’t need as much attention paid to it can be a better option for people who have limited time to spend on their investment decisions.

That doesn’t mean you should necessarily take a ‘set it and forget it’ approach to investment, but absolutely consider the additional time commitment and stress of each potential investment and whether it is worth your time.

Diversify

Diversification improves reliability and reduces the risk of just about every investment portfolio. Your investments should always be varied enough that even when a few of your investments are in a slump, you will still have enough winners to make a minimum return.

Many entrepreneurs like Nicholas Kyriacopoulos from Toronto recommend holding a variety of asset types as well as stocks. For example, consider bonds and real estate as part of your overall portfolio; make sure you have stocks associated with several different industries.

Rebalance

According to Nicholas Kyriacopoulos, be open to the concept of rebalancing. As market conditions changes, look to shift your portfolio away from investments that with less promising prospects and up your investments in markets that look ready to rise. 

Nicholas Kyriacopoulos gives a simple example of rebalancing from the latter half of 2020. While oil prices were not looking great for most of the year, there were signs of incoming change. As a result, some investors sold oil assets over the summer and later purchase oil stocks. They then saw great returns when the stocks surged in November.

Asset allocation

As an experienced investor in Toronto, Nicholas Kyriacopoulos advises careful consideration of your current situation and future financial goals. For the most part, this is about the amount of risk you can take on and your ability to recover if an investment doesn’t go your way.

If you still have decades left to work and rebuild, you can afford to take more risks than if you are approaching retirement and are looking for holdings you can rely on for a long time.

Consider your long-term goals

Nicholas Kyriacopoulos observes that besides your current situation, you also need to think about long-term goals. Where do you want to be in five, ten, or twenty years, and what can you do along the way to ensure your investment takes you in the right direction? Setting goals and having plans is just as important in 2021 as it has always been.

Don’t ignore your instincts

As Nicholas Kyriacopoulos, investing does involve risk and it sometimes means going with what you feel deep in your gut. While your decisions should always be backed by data and analysis of the market, following your instincts make it easier to have confidence in your decisions.

Your instincts can come about as a result of noticing minor details others are not noticing. If the feeling is strong enough, take the risk.

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Investor Education Month Encouraging Investment Opportunities – 91.9 The Bend

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October is Investor Education Month, and the Financial and Consumer Services Commission (FCNB) is using the time to encourage New Brunswickers to think about investment opportunities.

Investor Education Month is a national initiative aimed to provide Canadians with more investor information.

“(As well), to understand their investment decisions, implications of them, and their responsibilities in the decision-making process, and particularly now with new online ways to investing,” said Marissa Sollows, director of education and communications for FCNB.

Sollows mentioned, FCNB has noticed over the years New Brunswickers are becoming more comfortable with investing.

“And as it becomes more accessible to people, we are seeing more New Brunswickers starting to put money away for their future, so that’s positive.”

The majority of New Brunswickers are investing in mutual funds, which is the most common product that investors hold.

Meantime, FCNB has also discovered investing is gaining popularity in young people.

“It could be due to increased media, or an increased use of social media coverage that they’re being exposed to investing topics, and wanting to get in and try a little bit earlier … and there are new trends that are becoming more popular with younger investors like DIY investing and using different online tools and apps,” said Sollows.

Sollows encourages new investors to meet with a registered investment professional and added the future looks quite exciting but will also present some challenges.

Throughout the month, FCNB will provide investor guides, videos, and social media posts on how to be an informed investor.

At any time of year, New Brunswickers can turn to the commission’s website for unbiased investor and consumer tools and information.

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Bitcoin tops $60,000, nears record high, on growing U.S. ETF hopes

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Bitcoin hit $60,000 for the first time in six months on Friday, nearing its all-time high, as hopes grew that U.S. regulators would allow a futures-based exchange-traded fund (ETF), a move likely to open the path to wider investment in digital assets.

Cryptocurrency investors have been waiting for approval of the first U.S.  ETF for Bitcoin , with bets on such a move fuelling its recent rally.

The world’s biggest cryptocurrency rose 4.5% to its highest level since Apr. 17, and was last at $59,290. It has risen by more than half since Sept. 20 and closing in on its record high of $64,895 hit in April.

The U.S. Securities and Exchange Commission (SEC) is set to allow the first U.S. bitcoin futures ETF to begin trading next week, Bloomberg News reported on Thursday.

Such a move would open a new path for investors to gain exposure to the emerging asset, traders and analysts said.

“ETFs open up a raft of avenues for people to gain exposure, and there will be a swift move to these structures,” said Charles Hayter, CEO of data firm CryptoCompare, which tracks ETF products.

“It reduces the frictions for investors to gain exposure and gives traditional funds room to use the asset for diversification purposes.”

Bitcoin’s moves on Friday were spurred by a tweet from the SEC’s investor education office urging investors to weigh risks and benefits of investing in funds that holds bitcoin futures contracts, said Ben Caselin of Asia-based crypto exchange AAX.

 

Graphic: Bitcoin on the rise https://fingfx.thomsonreuters.com/gfx/mkt/movanjqkapa/bitcoin.PNG

 

Several fund managers, including the VanEck Bitcoin Trust, ProShares, Invesco, Valkyrie and Galaxy Digital Funds have applied to launch bitcoin ETFs in the United States.

Crypto ETFs have launched this year in Canada and Europe, growing in popularity amid surging interest in digital assets.

SEC Chair Gary Gensler has previously said the crypto market involves many tokens which may be unregistered securities and leaves prices open to manipulation and millions of investors vulnerable to risks.

Citing people familiar with the matter, the Bloomberg report said proposals by ProShares and Invesco, based on futures contracts, were filed under mutual fund rules that Gensler has said provide “significant investor protections”.

The SEC did not immediately respond to a request for comment on the report.

“It’s one of the final frontiers for mandate access,” said Joseph Edwards, head of research at crypto broker Enigma Securities.

“Plenty of Americans in particular have strings attached to how they deploy a lot of their wealth. It allows bitcoin to get in on the sorts of windfall that keep U.S. equities as consistently strong as they are.”

 

(Reporting by Tom Wilson in London and Alun John in Hong Kong, and Mrinmay Dey and Shubham Kalia in Bengaluru; editing by Alexander Smith and Jason Neely)

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