Buzz Stocks: Cempra, Conatus Pharma, NVIDIA

Today's stocks to watch in the news include Cempra Inc (CEMP), Conatus Pharmaceuticals Inc (CNAT), and NVIDIA Corporation (NVDA)

by Alex Eppstein

Published on Jan 5, 2015 at 9:09 AM
Updated on Jul 1, 2020 at 5:03 PM

U.S. equities are pointed lower in pre-market trading, as energy continues to weigh on investor sentiment. In company news, today's stocks to watch include drugmakers Cempra Inc (NASDAQ:CEMP) and Conatus Pharmaceuticals Inc (NASDAQ:CNAT), as well as microchip designer NVIDIA Corporation (NASDAQ:NVDA).

  • CEMP is pointed 16% higher ahead of the bell, following promising drug-trial results. Specifically, the firm's antibiotic, solithromycin -- designed to fight pathogens that contribute to community-acquired bacterial pneumonia (CAPB) -- met the main goal of a late-stage trial. On the charts, Cempra Inc has been a long-term outperformer, rallying 74.5% year-over-year, and hitting a record high of $24.71 last week before settling at $22.89. Not surprisingly, the brokerage bunch is solidly behind the shares, with 100% of covering analysts handing out "strong buy" recommendations. In fact, both Baird and Cowen and Company lifted their price targets this morning -- to $32 and $35, respectively -- while underscoring "outperform" ratings.

  • Sector peer CNAT announced it will release top-line results from three clinical trials on Thursday evening. A conference call will be held after the market closes, with company officials planning to touch on the development and commercialization of three liver disease treatments. As a result of this news, Conatus Pharmaceuticals Inc is up 34% in electronic trading. This strong price action is more of the same for a stock that has rallied nearly 31% year-over-year, and has outperformed the broader S&P 500 Index (SPX) by close to 21 percentage points during the last two months. As such, option traders have been upping the bullish ante on CNAT. The equity's 10-day International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) call/put volume ratio checks in at 15.77 -- meaning speculators have bought to open nearly 16 calls for every put over the last two weeks. What's more, from a historical standpoint, buyers are paying a pretty penny to bet on CNAT's short-term trajectory, as the equity's Schaeffer's Volatility Index (SVI) of 157% registers in the 86th percentile of its annual range.

  • Finally, NVDA unveiled its Tegra X1 microprocessor at the Consumer Electronics Show (CES) over the weekend. The chip boasts a 256-core graphics processing unit (GPU) on top of an 8-core central processing unit (CPU), resulting in a teraflop of computing power and the potential to bring desktop-based games to mobile handhelds. Technically speaking, NVIDIA Corporation has surged 28.5% over the last 12 months, and -- at $20.13 -- is not far from its multi-year high of $21.25, touched last month. On the Street, however, there's plenty of pessimism being lobbed toward the shares. NVDA's 10-day ISE/CBOE/PHLX put/call volume ratio of 2.92 ranks in the 100th annual percentile (though some of this may be hedging activity), and 7.3% of the equity's float is sold short -- representing almost seven days' worth of pent-up buying power, at typical daily trading volumes. Should these skeptics capitulate in the face of NVDA's technical tenacity, it could result in tailwinds.

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