Sierra Oncology, Inc. (NASDAQ:SRRA) Gets Upgrade From Wedbush Analyst

Sierra Oncology, Inc. (NASDAQ:SRRA)

Canadian-based Sierra Oncology, Inc. (NASDAQ:SRRA) is a clinical stage drug development company advancing targeted therapeutics for the treatment of cancer patients. The company’s hares exploded this morning on the back of the news that SRRA had been upgraded to “Outperform” by a Wedbush analyst. Shares closed yesterday at $1.41 but rose to $1.60 on the open – a gain of more than 12%. Volumes were over 10 times their daily average.

Normally a gain of $0.18 is not cause for eyebrow raising – even on a stock that is trading at less than $2. However consider that the Average TrueRange (ATR) of Sierra Oncology, Inc. (NASDAQ:SRRA) is a mere $0.06. SRRE volatilities are low when comparing against other biotechnology stocks between $1-$5. Of the 20 lowest volatility biotech stocks, Sierra Oncology, Inc. (NASDAQ:SRRA) has the 3rd highest average volumes.

On February 9, Sierra Oncology, Inc. (NASDAQ:SRRA) announced the pricing of an underwritten public offering of 19.5 million shares of its common stock at a price of $1.35 per share, with expected gross proceeds of $26.3 million. Sierra Oncology, Inc. (NASDAQ:SRRA) also granted the underwriters a 30-day option to purchase up to 2,925,000 additional shares of common stock at the public offering price, less underwriting discounts and commissions. When news of the impending dilution hit the market, shares dropped about $0.10.

Jeffries and Suntrust also follow Sierra Oncology, Inc. (NASDAQ:SRRA) – they each rate SRRA shares as a “Hold”. Sierra has no reported sales and reported an EPS loss of $31.47 for 2015.

I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.

About the author: Marc has a degree in economics and a MSc. in Finance. Over his 20 year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

2/22/2017
Ticker Symbol SRRA
Last Price a/o 10:44 AM EST  $                      1.54
Average Volume                    481,300
Market Cap (mlns)  $                    68.81
Sales (mlns) $0.00
Shares Outstanding (mlns) 48.8
Share Float (mlns) 48.8
Shortable Yes
Optionable No
Inside Ownership 0.20%
Short Float 3.93%
Short Interest Ratio 3.98
Quarterly Return -7.84%
YTD Return -5.37%
Year Return -79.89%