CLOVIS ONCOLOGY INC. - Stocks Rebounded on Stimulus Hope - 02/03/2021 (GMT)

STATE OF THE MARKETS
Stocks rebounded on stimulus hope. US equities rebounded on optimism over new stimulus spending to revive the world’s largest economy after being plagued by the corona pandemic. The US senate took steps to allow Democrats to pass Biden’s package without Republican support, which boosted optimism and saw some return of Treasury demands around $95 billions. The 10Y benchmark yielded higher to close around 1.10% compared to 1.08% on Monday. Crude continued its upward trajectory, closed above $54.75/bl as reports showed that OPEC+ countries are curbing output as per voluntary commitment, which helped support price as producers are trying cope with the flagging demand.

Markets optimism sent gold as low as $1,829.46/oz before settled around $1,837.35/oz as markets closed.
In the FX space, the Greenback took the helm of demand in the medium and long term accounts as it retreated in the short-term. The higher interest bearing Kiwi and Loonie, returned to demand, while Aussie remain suppressed despite the RBA decision to keep rate unchanged. There is a growing sentiments in the finance community that the worst is yet to come.

OUR PICK – Clovis Oncology (CLVS, Nasdaq)
CLVS is 50% undervalued and onto the final push.  CLVS might not be the favorite stock but valuation using discounted cash flow (DCF) showed that this company is 53.5% undervalued. That make this stock fairly valued around $17.55/share. Though not paying dividend currently, its earning is increasing 7.6% and far better than the industry that is losing 10.3% last year. The risk with this stock is, it’s having far more debt that it’s asset, so it’s have no book value or negative equity value. In other words, in the event the company goes under, then be ready to lose all of your money. The irony is, as of Q3, 2020, institutions have increased their holdings from 9.40% to 36.84% which what drove the price higher. At this point, from technical point of view, we are looking at the final push to the upside as bidders outsized offers at the $8.00 mark.


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