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The market indices ended the day mixed as oil prices fell.
The market indices ended the day mixed.
The S&P 500 and the DOW Jones indices both took a dip into the red by the end of the day, with the NASDAQ beginning the week with some gains. This tough start to the week is partly due to oil prices slipping more than 2% over the course of the day. This was evident by the West Texas Intermediate price. In addition to oil prices, the COVID delta variant continues to trouble the world economy and investors sentiment is impacted by it.
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Golden Nugget Online Gaming (GNOG) stock surges 50% after announcing its purchase by DraftKings (DKNG).
On top of the winners list on Stock Card, Golden Nugget Online Gaming (GNOG) stock is up 50% today after announcing that it was being bought by DraftKings (DKNG).
It seems the Golden Nugget's acquisition is a good deal for DraftKings due to its 5 million users on its online gaming market, which includes online casinos and sports betting. Gambling, and more recently sports betting in the United States has been on the rise for years. The pandemic brought gambling revenue to its lowest since 2003, only reaching $30 billion. DraftKings will benefit from the resurgence of gambling as it expands its coverage and user base.
In Friday’s earnings report, DraftKings shared its 320% revenue growth since the second quarter last year. The company is live in 12 states that make up 25% of the country’s population. This still leaves plenty of room to grow, and as acquisitions and legislation proceed, DraftKings is positioned to expand.
Looking at the DraftKings Stock Card, what bothers me is its negative free cash flow which could be an indicator that the company is still trying to figure out how to make money with its core business. I'd like to keep monitoring DraftKings to see more stability in its operation.
But, DraftKings isn't the only game in town. Type in “gambling” in the search bar on Stock Card, or take a look at the themes and collections DraftKings belongs to, and the watchlist of 65 companies in the Gambling collection. Better yet, create a new filter, then just add gambling and “no cash concerns.” There you have 9 stocks on a neat and tidy list.
Axsome Therapeutics (AXSM) runs into setbacks with FDA approval, and stock plummets 45%.
I noticed a company I didn’t recognize on top of Stock Card’s losers list today. It's Axsome Therapeutics (AXSM). I got curious to see what could cause a stock to drop 45% in one day. It seems it's a pharma stock that announced regulatory setbacks with the FDA on its major depressive disorder drug. This made it clear for me why the stock dropped that much. Yet again the market is reacting to clinical trial news. So, is this a buying opportunity? Let's find out:
Axsome Therapeutics is a clinical-stage biopharmaceutical company. In today’s earnings report, the company announced that the FDA had halted the approval process of its major depressive disorder treatment AXS-05, because of deficiencies in the drug’s regulatory application. The CEO admitted that this could likely delay the eventual approval of the drug. Leading up to this, AXS-05 has been delivering great results in phase 2 trials.
Axsome share price has fallen quite a ways since its January high, losing nearly half of its value even before today's nosedive. This sudden drop in price is very characteristic of pharmaceutical companies that are in the clinical trial stages.
The most important question is whether it has enough cash to keep going. The company stated in today’s report that its cash reserves are enough to keep it afloat through the potential commercial launch of AXS-05 in MDD and AXS-07, or at least until 2024. The company also has other treatments in the pipeline.
Looking at the Stock Card, while investor sentiment may be very poor, the analyst consensus is to buy. The knee-jerk reaction that today’s setback brought seems to be a great opportunity to pick up some shares at a discount if you can tolerate volatility and possible additional delays in the drug's approval. You never know when a drug is approved, so this is indeed a risky bet.
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Stocks to Buy In August by Bow Tie Nation Portfolio
Folks, Stock Card partner Joseph Hogue from let's Talk Money channel has a new video and stock recommendations to buy in August. This month's portfolio review is quite cool because he has invited his community to come up with ideas. I quite enjoyed the video and got at least one good idea to add to my portfolio.
Watch Joseph's video and make sure to follow his Bow Tie Nation portfolio to get notified when he adds companies to the list.
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