Research Firm: "Buyer Beware" of This Biotech

Mattel expanded its licensing agreement with Warner Bros.

by Emma Duncan

Published on May 23, 2019 at 3:35 PM

U.S. markets are trading lower once again, bogged down by trade fears and disappointing manufacturing data. Three stocks worth watching this afternoon are sepsis specialist T2 Biosystems Inc (NASDAQ:TTOO), toymaker Mattel Inc (NASDAQ:MAT), and Sacramento-based agriculture name S&W Seed Company (NASDAQ:SANW). Below, we will dive into what is moving the shares of TTOO, MAT, and SANW.

Research Firm Waves Red Flags on T2 Biosystem

T2 Biosystems has taken a massive hit today, down 20% at $2.06, and fresh off a record low of $1.75. The fall comes just after Mako Research slammed the diagnostic machine manufacturer, calling it a "disaster in progress," and saying "buyer beware."

Mako listed false revenue numbers, a toxic credit agreement, and "unachievable" revenue guidance as the three largest red flags. TTOO has been on a downtrend since touching its two-year peak of $9.98 on June 15, mostly pressured by its declining 80-day moving average.

Meanwhile, short interest on TTOO surged 15.2% during the past two reporting periods, and now accounts for nearly 21% of the stock's total available float. At the security's average pace of trading, it would take shorts almost three weeks to buy back their bearish bets. These traders are sidelined today, though, with the stock on the short-sale restricted list.

Mattel Pops on DC License Extension News

Mattel today announced its licensing deal extension with Warner Bros., allowing the toymaker to continue selling DC products, and create new content for "DC Super Hero Girls." MAT is now up 1.4% at $11.07, a welcome feat for the stock, as it's still down 26% year-over-year. 

In the options pits, Mattel stock's Schaeffer's put/call volume ratio (SOIR) of 2.88 ranks in the 100th annual percentile. This means traders are unusually put-heavy among options expiring within three months.

S&W Seed Stock Eyes Best Day in Over a Year

S&W Seed stock is up 14% at $2.85, after the company inked a new alfalfa licensing deal with the agricultural sector of DowDuPont (DWDP), Corteva Agriscience. The deal includes a $45 million payment for SANW at the closing, and an additional payments totaling $25 million until February 2021. The stock has moved 55% higher year-to-date, and is eyeing its best day since November 2017.

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