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ValuEngine Forecast Model Short Pick Exact Sciences (EXAS, $EXAS) Provides 30% Gain

|Includes: EXACT Sciences Corporation (EXAS)
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November 3, 2010
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ValuEngine Forecast Model Short Pick Exact Sciences (EXAS, $EXAS) Provides 30% Gain

   The current big gainer for our ValuEngine Forecast 22 Market Neutral Strategy is EXACT SCIENCES (EXAS.)  Since our last rebalance on October 15th, EXACT SCIENCES--a short pick--has seen a share price decline of almost 30%.  Shares were down despite some good news for the company's colorectal screening test as well as the announcement that they received a grant from the US Federal Government to further support the research program.  The stock had shown strong momentum over the past 6 months and thus the model was quite astute in timing the short call.

  ValuEngine has issued a HOLD recommendation for EXACT SCIENCES for the longer term because the one-year forecast target price remains in positive territory.  However, it ranks near the bottom of our database in terms of composite score, fair value, p/e ratio, and the one year target price. 

  Based on the information we have gathered and our resulting research, we feel that EXACT SCIENCES has the probability to ROUGHLY MATCH average market performance for the next year. The company exhibits ATTRACTIVE momentum and 5-year annualized return, but UNATTRACTIVE expected EPS growth.

  As of Nov. 03, 2010, we believe that EXACT SCIENCES should be trading at $3.33. This makes EXACT SCIENCES 87.57% overvalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For EXACT SCIENCES, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of -$0.25, forecasted EPS for the next four quarters of -$0.48, and correlations to the 30- year Treasury bond yield of 3.93%.

  EXACT SCIENCES uses applied genomics to develop screening technologies for use in the detection of cancer. Certain of its technologies have been licensed to Laboratory Corporation of America Holdings for a stool-based DNA screening assay for colorectal cancer in the average-risk population.

Subscribers can check out the latest figures on EXACT SCIENCES from our models HERE.

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Market Indices Data
  Latest Change YTD
Dow Jones
11,207.20 18.47 7.47%
NASDAQ Composite
2,533.86 0.34 11.67%
Russell 2000
713.03 0.14 12.45%
S&P 500
1,195.05 1.48 7.17%

 

ValuEngine Market Overview
Summary of VE Stock Universe
Stocks Undervalued
52.23%
Stocks Overvalued
47.77%
Stocks Undervalued by 20%
24.9%
Stocks Overvalued by 20%
19.3%

 

ValuEngine Sector Overview
Sector Change MTD YTD Valuation Last 12-MReturn P/E Ratio
Basic Industries 1.20% 1.30% 26.11% 11.20% overvalued 50.29% 25.87
Energy 1.38% 1.45% 9.99% 11.14% overvalued 32.77% 26.12
Public Utilities 1.05% 1.08% 3.23% 4.73% overvalued 19.72% 20.24
Transportation 1.12% 1.17% 21.75% 3.20% overvalued 33.62% 19.96
Consumer Non-Durables 0.98% 1.08% 11.88% 0.83% overvalued 24.05% 17.20
Capital Goods 1.73% 1.84% 22.52% 0.19% overvalued 24.09% 21.82
Technology 0.96% 1.13% 23.81% 1.04% undervalued 33.59% 25.32
Consumer Services 1.42% 1.59% 16.85% 2.87% undervalued 22.66% 21.56
Finance 0.79% 0.86% 13.12% 3.86% undervalued 13.10% 18.05
Consumer Durables 1.55% 1.65% 17.43% 4.45% undervalued 35.53% 20.31
Health Care 1.06% 1.19% 23.58% 8.28% undervalued 13.02% 20.75

 

 
 
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