eyeQ: a stock to watch as bullish signal nears
Experts at eyeQ have used AI and their own smart machine to analyse macro conditions and generate actionable trading signals. Here’s what it makes of this well-known drug maker.
9th July 2024 10:31
by Huw Roberts from eyeQ
"Our signals are crafted through macro-valuation, trend analysis, and meticulous back-testing. This combination ensures a comprehensive evaluation of an asset's value, market conditions, and historical performance." eyeQ
- Discover: eyeQ analysis explained | eyeQ: our smart machine in action | Glossary
Moderna
Trading signal: long-term strategic model
Model value:$134.62
Fair Value Gap: -15.6% discount to model value
Model relevance: 70%
Data correct as at 9 July 2024. Please click glossary for explanation of terms.
A shot in the arm
Moderna Inc (NASDAQ:MRNA) is back in the headlines. Last week, the US government announced it will pay the biotech company $176 million to develop a mRNA pandemic flu vaccine. This comes amongst growing concerns about outbreaks of H5N1 bird flu. Thus far, there have been very few instances of transmission from livestock to humans, but authorities are sufficiently concerned that steps are being taken to get prepared.
Moderna’s mRNA vaccine technology was behind the Covid shots, and in 2021 the stock price nearly reached $500. More recently the stock has languished and is down 30% since the late May highs. Stock analysts will have a view on company fundamentals such as their pipeline of new vaccines.
But it is worth noting that macro is important too and conditions have started to improve. eyeQ model value has risen nearly 20% since mid-June and currently say the share price ‘should’ trade around $135.
The more friendly macro environment has not yet been recognised by the market. The stock sits 15.6% cheap on our smart machine – the cheapest levels since December. That level is just shy of the one standard deviation threshold we need to trigger a bullish signal. But we’re getting close. One to watch…
Source: eyeQ. Past performance is not a guide to future performance.
Useful terminology:
Model value
Where our smart machine calculates that any stock market index, single stock or exchange-traded fund (ETF) should be priced (the fair value) given the overall macroeconomic environment.
Model (macro) relevance
How confident we are in the model value. The higher the number the better! Above 65% means the macro environment is critical, so any valuation signals carry strong weight. Below 65%, we deem that something other than macro is driving the price.
Fair Value Gap (FVG)
The difference between our model value (fair value) and where the price currently is. A positive Fair Value Gap means the security is above the model value, which we refer to as “rich”. A negative FVG means that it's cheap. The bigger the FVG, the bigger the dislocation and therefore a better entry level for trades.
Long Term model
This model looks at share prices over the last 12 months, captures the company’s relationship with growth, inflation, currency shifts, central bank policy etc and calculates our key results - model value, model relevance, Fair Value Gap.
These third-party research articles are provided by eyeQ (Quant Insight). interactive investor does not make any representation as to the completeness, accuracy or timeliness of the information provided, nor do we accept any liability for any losses, costs, liabilities or expenses that may arise directly or indirectly from your use of, or reliance on, the information (except where we have acted negligently, fraudulently or in wilful default in relation to the production or distribution of the information).
The value of your investments may go down as well as up. You may not get back all the money that you invest.
Equity research is provided for information purposes only. Neither eyeQ (Quant Insight) nor interactive investor have considered your personal circumstances, and the information provided should not be considered a personal recommendation. If you are in any doubt as to the action you should take, please consult an authorised financial adviser.
Disclosure
We use a combination of fundamental and technical analysis in forming our view as to the valuation and prospects of an investment. Where relevant we have set out those particular matters we think are important in the above article, but further detail can be found here.
Please note that our article on this investment should not be considered to be a regular publication.
Details of all recommendations issued by ii during the previous 12-month period can be found here.
ii adheres to a strict code of conduct. Contributors may hold shares or have other interests in companies included in these portfolios, which could create a conflict of interests. Contributors intending to write about any financial instruments in which they have an interest are required to disclose such interest to ii and in the article itself. ii will at all times consider whether such interest impairs the objectivity of the recommendation.
In addition, individuals involved in the production of investment articles are subject to a personal account dealing restriction, which prevents them from placing a transaction in the specified instrument(s) for a period before and for five working days after such publication. This is to avoid personal interests conflicting with the interests of the recipients of those investment articles.