[NASDAQ: SAGE]: Yesterday was a huge day for Sage Therapeutics Inc. (SAGE). This stock closed the day with gains of over 44%. Volumes were high too, with 3 million shares changing hands within the day. This followed news that the company’s drug for Postpartum depression was a success and that it had met all endpoints of a 3rd phase trial. As per the company, patients treated with this drug had shown signs of positive progress, an indicator that the drug was working. The company also announced that it will be providing key milestones with regards to this drug in the next 12- 18 months.
From an investor standpoint, this is a big deal and makes this stock one of the hottest stocks to hold in 2019. That’s because once this drug hits the market, it could add a significant amount to the company’s bottom line. That’s because postpartum depression affects so many new mothers all across the world. If this drug is indeed the answer to PPD, then there would be a boom in sales worldwide. As such, this company is likely to report massive earnings growth all through 2019. Since revenues are part of what constitutes a critical aspect to the value of a stock, investors are likely to keep putting money into Sage, hence driving up its value all through the year.
To add to its potential for revenue growth and its impact on this company’s stock, this stock is trading at a massive discount at the moment. Sage is down by 40.03% in the past 12-months. This means that it is trading at a massive discount when its latest announcement is factored into its price. On the basis of its highly undervalued price, investors are likely to keep piling into Sage for the next 12-months. This buying pressure could see the value of Sage rise exponentially all through the year.
Another factor that makes Sage therapeutics a high potential buy is its high beta. This stock has a very high beta value of 3.29. While this makes it extremely risky in a bear market, it also makes it a very lucrative stock to hold in a bull market. At the moment, bulls seem to be regaining control of the market. This bullish sentiment is backed by a now dovish Fed chairman and signs of strength in the U.S economy. With such fundamentals backing the market, 2019 could be a good year for the stock markets. By extension, this means that high beta stocks like Sage could perform exceptionally well, relative to the rest of the market. Besides, even if the interest rates regime were to turn hawkish, Sage is unlikely to be affected. This company has a current ratio of 19.07. This is an indicator that it its books are so good, that it can pay its debts many times over, and still remain stable. This gives this stock an element of safety, and in a market that is increasingly bullish, it could be a big winner in 2019.