Q2 STOCKS TO BUY

Call Traders Jump On Rallying Weed Stock

Traders can blame the FDA for AQST's losses

Jan 31, 2019 at 2:13 PM
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The Dow is trading lower today, failing to benefit from the strength out of the tech sector. Three names making big moves today are tobacco and weed concern Pyxus International Inc (NYSE:PYX), gene therapy stock MeiraGTx Holdings PLC (NASDAQ:MGTX), and pharma name Aquestive Therapeutics Inc (NASDAQ:AQST). Here's what's moving shares of PYX, MGTX, and AQST.

Options Traders Jump On CBD E-Liquid Launch

PYX stock is trading up 10.2% at $17.11, following news that its business partner Criticality is launching a line of CBD e-liquids called Korent. This marks a second straight daily rally from the security, which is nearing its 200-day moving average for the first time since a November bear gap.

Some traders may be betting on more upside, too, based on today's options activity. For instance, the February 20 call is the most popular contract, and all signs point to buy-to-open activity. This would express confidence that Pyxus International will be trading back above $20 in the coming weeks.

Janssen Deal Has MeiraGTx Stock Soaring

MGTX stock has jumped to the top of the Nasdaq today, trading up 29% at $12.31, after the company announced a collaboration with Johnson & Johnson's (JNJ) unit Janssen to develop gene therapy treatments for eye conditions. The price action has the shares on pace for their first close above the 50-day moving average since early December.

Only four brokerage firms are in coverage on MeiraGTx, and they all recommend buying it. Moreover, the average 12-month price target is up at $22.50, a more than 80% premium to today's price, and well into record-high territory for a stock that began trading publicly this past June around $15.

FDA Decision Sends to AQST to New Low

As for major losers today, AQST is facing some of the biggest declines, last seen down 9.9% at $6.44. The Food and Drug Administration (FDA) failed to approve the company's drug for Parkinson's patients to treat "off episodes." Though the regulators asked for additional information, they didn't request another clinical study. The news earlier sent Aquestive Therapeutics to an all-time low of $5.60, a price that can be compared to the equity's all-time high of $20.70 from back in mid-September.

Short sellers missed the drugmaker's sell-off, however. As it stands now, short interest represents less than 3% of the float. Analysts, meanwhile, have an average 12-month price target of $23.40 on the stock.
 

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