Investors Putting On Short Positions In DURECT Corporation (NASDAQ:DRRX) Stock

For the period that ended December 31, 2019, the short interest in DURECT Corporation (NASDAQ:DRRX) stock is on the up. The 30.83% rise could be an indication that investors and traders expect a drop in the share price, often as a result of a drop in the business’ fundamentals. The average brokerage opinion at 2.3 suggests acquiring these shares. Between December 13 and December 31, the total count of shorted shares totaled 4.12 million. That number was 971,478 more shares compared with the total of 3.15 million shares in the space of prior two weeks, which suggests more traders or funds are betting that the company stock will move down. The average daily volume for DRRX at the December 31st settlement surged to 1,685,091, versus 590,761 at the December 13th report. That led days to cover to move at 2.446385, a 54.13% decrease compared to the 5.333634 days to cover recorded at the prior short interest data release.

In the recent trading session, DURECT Corporation (NASDAQ:DRRX) shares lost -4.48% or -0.12 points to close at $2.56 with a thin trading volume of 1.032 million shares. It opened the trading session at $2.75, the shares rose to $2.7 and dropped to $2.4, the range by which the price of stock traded the whole session. The company now has a market cap of $515 million and currently has 192.04 million outstanding shares. DURECT Corporation (DRRX) stock has accumulated 41.8 percent of market value in 21 trading days.

DRRX stock’s trailing 3-year beta is 2, meaning there will be a greater rate of return, although posing a higher risk. The part of a firm’s profit given to each outstanding share of regular stock was -$0.14 share in the trailing 52 weeks. The stock’s value fallen -29.47 percent year to date (YTD) compared to a rise of 334.57 percent in 52 week’s period. The firm’s shares are still trading -35.18 percent below its 1-year high of $3.95 and 411.98 percent up from 52-week low of $0.50. The average consensus ranking on the company is 2.3, on a ranging where 5 is equal to a consensus sell rating. In other words, the mean analyst recommendations are ranking this stock as a sell.

DURECT Corporation (DRRX) is most likely going to rise 64.06 percent in the coming 12 months, as per price target approximations compiled by finviz. Nevertheless, they have set the price target at a $5.5 as 12-month high price target. This represents a whopping 114.84 percent increase from the current trading price of shares. The 52-week median price target given by the analysts is $5, which means a return possibility of 95.31 percent in comparison with the closing price of the stock of $2.56 in recent trading session. The lowest price set for the stock is $2.1 which is just above -17.97 percent from DRRX share’s price at the end of session.

Past records have indicated that shares in DURECT Corporation rose on 23 different earnings reaction days and we have yet to see whether this trend will play out and remain in place when the company reports upcoming earnings. Investors will get the next hint of DRRX’s Q4 earnings on February 25. Analysts are predicting revenue to climb 177.9 percent to $10.08M in the financial fourth quarter, while EPS will soar by about -60 percent to -$0.02 per share. In the last quarter, it’s earnings of -$0.04 per share came better than the -$0.05, adjusted, expected by Thomson Reuters consensus estimate. Revenue for the quarter was $3.63M, missing the $3.76M analysts had expected. Earnings are seen to rise by -523 percent this year, -27.3 percent in the coming year and the trend continues by 20 percent every year in the next 5 years.

Let’s take a glimpse at some insider activity at DURECT Corporation (NASDAQ:DRRX) and observe the pattern. The earliest insider trade happened on 06/20/2019. 21 APRIL FUND, L.P. gathered a total of 4 million shares of the firm at average share price of $0.52. The total amount for the purchase was set at $2.08 million. On completing this exchange, the 10% Owner account balance was 26.48 million shares. The stock grew 392.31 percent from that insider purchase. On 06/10/2019, SAXE JON S, Director, did a purchase of 25 thousand shares at a price of $0.55 per share. This increased 13.75 thousand shares to the insider’s fortune and the stock experienced a 365.45 percent rally in price since the news became public. This exchange saw 177.81 thousand shares get into the Director account.

On 05/24/2019, Director SAXE JON S recorded a purchase transaction valued at $18.9 thousand. The purchase at $0.63 a share has added 30 thousand shares into the insider’s portfolio position. Meanwhile, shares price witnessed 306.35 percent increase since the transaction reporting date. The company insider is left with 152.81 thousand shares remaining in the account. SAXE JON S, who works as Director at the company, performed a purchase of 40.4 thousand shares in a transaction worth $28.28 thousand. The acquisition recorded on 05/13/2019 was priced at $0.7 per share. The stock price soared 265.71 percent since the transaction. SAXE JON S currently holds a stake of 85.4 thousand in DRRX stock which is worth $218.62 thousand after the insider buying.

The stock is lingering around the initial support level of $2.5. After this, the following support is at the zone of $2.32. Up until the time the DRRX stock hit levels beyond the current one, bulls should have no alarm. In terms of its momentum, the stock’s RSI hit 49.52 on the daily chart, and this may be a cause for concern. In case the price goes below $2.32 level on closing basis, there may be more profit booking with the stock growing weaker. Still, getting to the $2.78 level may cause a pull-back move approaching $2.88 mark.

DURECT Corporation (DRRX) shares are trading at a P/E ratio of -19.2 times earnings posted in the trailing 12 months. The industry DRRX deals with has an average P/E of 32.03. Its P/B ratio is standing at 92.77X compared to the 7.25 industry average. It is additionally sporting a 15.73 on the Price-to-Sales ratio, compared to the industry’s P/S average of 0.95. DURECT Corporation has a 82.9% gross profit margin, with its operating margin around -98.1%.