What We’re Watching In Cancer Diagnostics
One of our August trades is back on our radar ahead of earnings. The company makes blood tests that can help doctors choose a cancer treatment and check for signs that cancer has returned. These tests look for fragments of tumor DNA that circulate in the blood.
The business grows as more doctors order the tests and as doctors use them with more patients. We’ll look at how quickly test volumes are growing, how that’s translating into revenue, and whether management raises its outlook again.
Why We’re Taking A Second Look
Our Market Watchers X list first put the company on our radar in August. On Tuesday it also made our Top Names. Portfolio Armor’s system uses historical returns and signals from the options market to estimate potential return over the next six months. The Top Names are the ten securities that rank highest after we account for hedging costs.
Across the 175 completed six-month periods we’ve tracked since December 2022, our Top Names averaged 18.06% unhedged, versus 9.87% for SPY.
When two of our sources of alpha align, a name can warrant a second look and a second trade. We’re keeping our longer-dated August position and adding a short-term trade around the upcoming earnings report. The order and our exit plan are below.
Today’s Top Names Trade
Theme: Blood-based cancer diagnostics.
RSI: 53; Chartmill Technical Rating: 8; Setup Rating: 7; Fundamental Rating: 3.
