Sorrento Therapeutics, Inc. (NASDAQ:SRNE) news for Friday includes SRNE it had received a proposal from a private equity fund interested in acquiring a majority or all of its outstanding shares, valuing the company at as much as $993 millio. SRNE reached at $4.76 price level during last trade its distance from 20 days simple moving average was 32.35%, and its distance from 50 days simple moving average was 71.30% while it has a distance of 69.04% from the 200 days simple moving average.
Shares of the company surged 67.74% to $5.72 before the bell, after the drugmaker said it was reviewing the non-binding proposal of up to $7 per Sorrento share.
The market capitalization of the company, which has one therapy, ZTlido, approved in the United States for relieving nerve pain following shingles infection, stood at about $483.8 million as of Thursday’s close.
The San Diego-based company did not disclose the name of the private equity fund and did not respond immediately to Reuters request for the name.
The proposal comes a few months after the cancer therapy developer rejected an unsolicited buyout proposal from two pharmaceutical companies which offered between $3 and $5 for each of Sorrento’s outstanding shares.
Sorrento added ZTlido as part of its 2016 acquisition of majority stake in privately held SCILEX Pharmaceuticals Inc.
Past 5 years growth of SRNE observed at -5.70%, and for the next five years the analysts that follow this company are expecting its growth at 37.00%. The average true range (ATR) is a measure of volatility introduced by Welles Wilder in his book, “New Concepts in Technical Trading Systems.” The true range indicator is the greatest of the following: current high less the current low, the absolute value of the current high less the previous close and the absolute value of the current low less the previous close. The average true range is a moving average, generally 14 days, of the true ranges.
Sorrento Therapeutics, Inc. has an average true range (ATR) of 0.38. Other technical indicators are worth considering in assessing the prospects for EQT. SRNE’s price to sales ratio for trailing twelve months was 27.09 and price to book ratio for most recent quarter was 13.60, whereas price to cash per share for the most recent quarter was 19.75. The Company’s price to free cash flow for trailing twelve months was N/A. Its quick ratio for most recent quarter was 0.60. Analysts mean recommendation for the stock was 2.00. This number is based on a 1 to 5 scale where 1 indicates a Strong Buy recommendation while 5 represents a Strong Sell.
Should You Go With High Insider Ownership?
Many value investors look for stocks with a high percent of insider ownership, under the theory that when management are shareholders, they will act in its own self interest, and create shareholder value in the long-term. This aligns the interests of shareholders with management, thus benefiting everyone. While this sounds great in theory, high insider ownership can actually lead to the opposite result, a management team that is unaccountable because they can keep their jobs under almost any circumstance.
Sorrento Therapeutics, Inc.‘s shares owned by insiders remained 34.80%, whereas shares owned by institutional owners are 17.40%.
Meanwhile, SRNE traded under umbrella of Healthcare sector, the stock was traded -26.77% ahead of its 52-week high and 242.45% beyond its 52-week low. So, both the price and 52-week high indicators would give you a clear-cut picture to evaluate the price direction.
As of this writing, Eden Shearer did not hold a position in any of the aforementioned securities.