M12 BARRON’S September 30, 2019
Research Reports
HowAnalystsSizeUpCompanies
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Semtech• SMTC-Nasdaq
Overweight • Price $47.34 on Sept. 26
by PiperJaffray
At its hardware event, Amazon.com
[ticker: AMZN] announced the launch of its
Sidewalk network, which we believe is
based on [Semtech’s] LoRa [technology].
Sidewalk is Amazon’s new low-bandwidth
network that uses the 900 megahertz spec-
trum, roughly the same spectrum range as
LoRa. Given Sidewalk’s characteristics, we
are quite convinced that Sidewalk uses
LoRa technology.
Over the past several quarters, there
has been some worry about LoRa’s long-
term growth rate. However, with Sidewalk,
we believe that it takes LoRa to the next
level, with significant proliferation and
growth opportunities. Overall, with initial
products expected to launch next year, we
believe that Sidewalk can drive significant
LoRa growth over the next several years.
We reiterate our Overweight rating. We are
increasing our price target to $55 from $50.
Iovance Biotherapeutics
- IOVA-Nasdaq
Buy • Price $18.79 on Sept. 25
by H.C. Wainwright & Co.
An investor breakfast addressed the crucial
relevance of tumor infiltrating lymphocytes,
or TILs [cells that the immune system uses
to fight early-stage cancer]; [Iovance’s]
commercial prospects; and next steps.
Although the company is not commercial-
stage yet, we project that this should occur
in 2021. As for pricing, management feels
discussions are too early at this point; how-
ever, market research is ongoing, revisiting
launch forecasts, timing, and pricing.
[Iovance’s anticancer technology using]
TILs would probably fall in the same reim-
bursement bucket as CAR T [a rival treat-
ment], and Novartis [NVS] has already
done most of the work in prepping the mar-
ket. Economically, TILs and CAR T could
show the same pricing; however, the total
cost is different, with TILs offering de-
creased overall costs mainly due to 1) lack
of molecular engineering currently (for ex-
ample, no viral vector component), and 2)
lower hospitalization costs. Patients treated
with TILs should leave the hospital sooner.
Price target: $32.
Boston Beer• SAM-NYSE
Outperform • Price $349 on Sept. 25
by BMO Capital Markets
We are upgrading Boston Beer to Outper-
form and raising our target price to $410.
The company is one of the rare staples
growth investments that doesn’t require a
sizable multiple expansion to “work.”
Boston’s 2020 earnings per share could
approach $13 (20% above the current con-
sensus of $10.78) as Truly [hard seltzer] is
primed to capture strong consumer demand
and higher distribution/shelf space. Hard
seltzer, in our base-case scenario, could post
80% growth in 2020 and a 30% [compound
annual growth rate] over the next five
years.
The main pushback against Boston—its
high price/earnings multiple (2020E: 33
times)—can be turned on its head with a
better assessment of Boston’s earnings po-
tential. In fact, we believe that 2020 EPS
could approach $13 (even with sequentially
lower seltzer/Truly growth), which implies
that Boston is currently trading at an esti-
mated 2020 P/E of 26 to 27 times, highly at-
tractive, given its growth outlook.
Our $410 target price is based on a 32
times P/E, unchanged from Boston Beer’s
current estimated 2020 multiple and still
750 basis points [7.5 percentage points] be-
low its recent peak multiple.
Anika Therapeutics• ANIK-Nasdaq
Outperform • Price $52.92 on Sept. 24
by Barrington Research
Anika Therapeutics held an analyst and in-
vestor day last week near its headquarters
in Boston. Management presented its long-
term strategic vision and a five-year growth
plan that are both quite compelling. Some
highlights:
Anika clearly believes that its historical
expertise in utilizing hyaluronic acid, or
HA, in osteoarthritis pain-management
products, such as Orthovisc, Monovisc, and
Cingal, is only just the beginning.
Anika highlighted its early-stage efforts
to build a franchise with the recent (soft)
commercial launch of Tactoset, an HA-
enhanced injectable bone-repair product for
defects in the knee. In addition, the com-
pany discussed Hyalofast (a cartilage-repair
product that is 60% enrolled in a Phase 3
trial) as well as earlier-stage research being
done on a rotator-cuff-repair therapy prod-
uct. Anika highlighted anterior-cruciate-
ligament and biceps repair as potential new
avenues to explore. Lastly, Anika looks to
expand its HA platform into areas such as
hip and extremities (wrist, hand, foot, addi-
tional tendons, and ligaments).
One of Anika’s historical shortcomings
has been long and disturbing gaps in new
product introductions. Management stated
that a key internal goal over the next five
years is for new products to deliver at least
25% of overall revenue. We think the new
management team “gets it” when it comes
to the value creation that often stems from
effective new product development.
We are maintaining our Outperform
investment rating and increase our price
target to $58 from $49.
INSIDER TRANSACTIONS RATIO
0
10
20
30
40
50
60
O N D J F M A M J J A S
Ratio of Insiders Sales to Buys. Readings under 12:1 are Bullish. Those over 20:1 are Bearish.
The total top20 sales and buys are 302, 724 ,058 and 26, 027 ,854 respectively; Source: Thomson Reuters
Bearish
Bullish
Ratio = 12
INSIDER TRANSACTIONS: Recent Filings
Purchases
$ Val
Company/Symbol Insiders Shares (000's)Springworks Therapeutics SWTX 2 325,000 7,657
Kraft Heinz KHC 1 250,000 7,113Vbi Vaccines VBIV 1 10,000,000 5,000
Igm Biosciences IGMS 4 86,840 2,077Vtv Therapeutics VTVT 1 606,061 1,000Emmaus Life Sciences EMMA 1 158,783 523
Gamestop GME 4 91,268 456
PennsylvaniaREIT PEI 9 81,700 436Maxlinear MXL 1 11,250 250Stage Stores SSI 1 229,500 227Summit Financial SMMF 1 8,000 200L S Starrett SCX 7 32,329 198
Klx Energy Services KLXE 2 15,455 143Alerus Financial ALRS 2 5,951 125Destination Xl DXLG 3 90,006 125Dpw DPW 1 40,000 111Cannae CNNE 1 3,699 100
Protective Insurance PTVCB 1 6,100 100
Chewy CHWY 1 3,500 96Century Bancorp CNBKA 2 1,045 90Sales
$ Val
Company/Symbol Insiders Shares (000's)Facebook FB 1 240,494 43,913
Intuit INTU 1 133,333 36,032
Anaplan PLAN 4 631,103 32,912Integra Lifesciences IART 1 520,000 31,704Broadridge Financial Solutions BR 1 199,081 25,193Factset Research Systems FDS 1 75,000 21,215Smartsheet SMAR 3 352,500 14,448
Elastic Nv ESTC 2 149,000 13,830Netflix NFLX 1 43,372 11,562Funko FNKO 1 450,000 11,303Tcr2 Therapeutics TCRR 1 416,321 7,460Fidelity National Financial FNF 2 149,108 6,472
Rh RH 4 37,690 6,384
Stryker SYK 1 28,690 6,340Twilio TWLO 3 54,703 6,175General Dynamics GD 1 32,930 6,163
Nvidia NVDA 1 31,357 5,613Teleflex TFX 3 16,200 5,455
Hubspot HUBS 2 33,500 5,401Brady BRC 7 94,960 5,148Aninsiderisanyofficer,directororownerof10%ormoreofaclassofacompany'ssecurities.Inmostcases,aninsidermustreportanytradeto
theSECwithintwobusinessdays.ThetableshighlightcompaniesthatfiledwiththeSECthroughlastWednesday.Thetablesdonotinclude
pension-planoremployeestock-optionactivity,tradesbybeneficialownersof10%ormore,tradesunder$2pershareortradesunder100
shares.The"Purchases"columnincludesonlyopen-marketandprivatepurchases;the"Sales"columnincludesonlyopen-marketandprivatesales,
andexcludestradesprecededbyoptionexerciseinthe12monthspriortothereportedevent. Source:ThomsonReuters