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Med Tech Stock Pops on China News

China will add 154 new surgical robots over the next two years

Oct 31, 2018 at 2:06 PM
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A round of upbeat earnings and economic data has the U.S. stock market up big today, though it's still staring at a sizable October deficit. Among individual names making notable moves are da Vinci Surgical System parent Intuitive Surgical, Inc. (NASDAQ:ISRG), rare disease specialist Strongbridge Biopharma plc (NASDAQ:SBBP), and veterinary name Kindred Biosciences Inc (NASDAQ:KIN). Here's a quick look at what's moving shares of ISRG, SBBP, and KIN.

Analysts are Upbeat on Outperforming ISRG

Intuitive Surgical stock has shot up 6.6% to trade at $523.48, after China said it will add 154 new surgical robots by 2020. Today's pop has ISRG bouncing off its 200-day moving average, and paring its monthly deficit to 9.3%. The shares remain up 43% year-to-date, and are less than 10% off their Oct. 1 record high of $581.12.

As such, most analysts are bullish on ISRG, with 12 of 14 maintaining a "buy" or better rating on the medical technology stock. Plus, the average 12-month price target of $588.40 is a healthy 12.4% premium to current trading levels.

Novo Nordisk Will Buy 5.2M SBBP Shares at $7 Each

Strongbridge Biopharma shares have surged 51.9% today to trade at $6.24, after the company said it sold the U.S. and Canadian rights for its drug to test for adult growth hormone deficiency to Novo Nordisk (NVO) for $145 million. Additionally, NVO will buy 5.2 million SBBP shares for $7 apiece -- a nearly 73% premium to last night's close.

Despite these impressive gains, today's rally is stalling out near SBBP's 200-day moving average, a former layer of support that has contained the stock since late May. What's more, the shares are still down nearly 15% on the year.

Options traders are showing unusual interest in SBBP stock today, too. At last check, 345 puts and 168 calls have changed hands on the stock, compared to an average daily volume of 14 contracts. Plus, put volume is at a new 52-week peak, with potential sell-to-open activity detected at the November 5 put

Kindred Biosciences Stock Rallies Into Familiar Resistance

Late yesterday, Kindred Biosciences announced positive data for its canine atopic dermatitis treatment. A handful of bullish analysts have chimed in on KIN stock, too, with Cantor Fitzgerald boosting its price target to $25 from $20, and Euro Pacific Capital and Lake Street Capital reaffirming their "buy" ratings the equity.

In reaction, KIN shares are trading up 20.5% today at $14.83, pacing toward their highest close since Aug. 28. However, the $15 mark is maintaining its role as stiff resistance for the stock. In fact, since first toppling this level back in mid-August, KIN has only closed at or above here four times.

The equity is still up 56% year-to-date, though, and a number of short sellers could start covering. Short interest jumped 50% in the two most recent reporting periods to 520,000 shares -- the most since mid-June.
 
 

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