[Editor's Note: "Sell Moderna (MRNA) Stock as Covid-19 Catalyst Inflates Valuation" was originally published April 2, 2020. It is regularly updated to include the most relevant information.]Source: Shutterstock Is the party over for Moderna (NASDAQ:MRNA)? MRNA stock soared in May as the company's novel coronavirus prospects looked bright. But now, with investors selling off vaccine plays, the days of this being a "hot stock" may be coming to an end.Granted, this doesn't mean "game over" for their prospective mRNA-1273 vaccine. Already entering phase 2 clinical trials, they could have a vaccine available for use by the end of the year.InvestorPlace – Stock Market News, Stock Advice & Trading TipsPerceived "first mover advantage" is one thing Moderna has going for it. Another is social proof, courtesy of the U.S. government. With a former exec leading the White House's vaccine efforts, it seems Moderna has yet another edge.Yet, as investors have either cashed out, or lost love, for Moderna, shares have taken a hit. Just a few weeks ago, the stock was parabolic, hitting prices as high as $87 per share. * 10 M&A Deals I'd Love to See Happen in the Second Half of 2020 Now? Things aren't so hot anymore. Shares now trade around $60 per share. But, could today's pullback be a buying opportunity?Not so fast! Moderna shares still trade at a rich valuation. Investors continue to price in much of the potential gains from not one, but two vaccines (more below). In short, shares could tumble further if both efforts wind up being fruitless. I know, it's fun to speculate on biotech stocks. Especially when it ties into a newsworthy event. But, as Moderna stock trends lower, it may be too late to ride the coronavirus vaccine wave. Coronavirus Vaccine and MRNA StockWhat a difference a few weeks makes. On May 18, news of positive preliminary findings put Moderna shares into hyper-drive. But, vaccine experts went through the details. According to them, the recent news revealed little about the vaccine candidate's effectiveness.It all went downhill from there. As the company raised equity, insiders sold shares, and other concerns mounted, Moderna's stock price fell back to earth.But, don't take this pullback as being an invitation to buy. Considering so much has been priced into shares, investors still face big potential losses if things don't pan out.So, with this catalyst a bit of a gamble, are there other factors at play with Moderna's stock? Yes. As InvestorPlace's Luke Lango discussed March 5, there's huge potential for the company's prospective vaccine for CMV, or congenital cytomegalovirus.Creating a vaccine for this major cause of birth defects may be an even greater catalyst for Moderna. Based on Lango's analysis, if all goes right, the company could generate billions in pre-tax profits if it receives Food and Drug Administration (FDA) approval.But this catalyst was already reflected in the stock price of MRNA. Before coronavirus sent shares higher. The company's market capitalization now stands at around $23.3 billion. In short, the company needs its prospective CMV vaccine to go without a hitch. Any bump in the road could send shares cratering.So would dashed hopes of mRNA-1273 becoming the first Covid-19 vaccine. Considering investors have priced in both catalysts, it's tough to justify a buy. Other Vaccine Stocks Could Offer Better ValueThe recent run-up in Moderna stock means shares trade at a rich valuation. The company's enterprise value/sales (EV/Sales) ratio currently stands at 422.7. That's a lot more reasonable than another coronavirus vaccine play, Inovio (NASDAQ:INO). That company's shares trade at a EV/Sales ratio of 688.8.But, if you're looking for a pure coronavirus vaccine play, there are other opportunities selling at lower (yet still frothy) valuations. Take, for example, iBio (NYSEMKT:IBIO), which currently trades at a EV/Sales ratio of 158.5. Granted, this name may be more of a gamble. But, a binary play like iBio may be a better than a more diversified one like Moderna.Moderna shares would bounce back if their vaccine shows success. But the potential rise in its stock price, percentage-wise, likely isn't as great as you'd see with an iBio or an Inovio.You could take that as a positive. A less binary play, downside for Moderna could be lower given their other catalysts. But that's hardly a great reason to buy, as the share price remains inflated due to past coronavirus speculation. Sell Moderna Stock as Shares Go ParabolicDon't buy Moderna because you think it'll strike gold with a coronavirus vaccine. Other vaccine contenders could offer a more promising risk/return proposition.Moderna stock does bring a lot more to the table. Their CMV vaccine catalyst could really move the needle if it pays off. But, this doesn't make shares a low-risk opportunity. If that vaccine fails to deliver, much of the stock's rich valuation would evaporate overnight.Whether you bought stock in MRNA for the CMV or the coronavirus catalyst, it's clearly time to sell. With shares treading water around $60 per share, cashing out today could be the best call.Thomas Niel, contributor to InvestorPlace, has been writing single-stock analysis since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 25 Stocks You Should Sell Immediately * 1 Under-the-Radar 5G Stock to Buy Now * This Stock Picker's Latest Video Just Went Viral * The 1 Stock All Retirees Must Own The post The Party Is Over for Moderna Stock Holders appeared first on InvestorPlace.
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(Bloomberg) — OPEC+ agreed to a one-month extension of its record output cuts and adopted more stringent methods to ensure members don’t break their production pledges.The deal is a victory for Saudi Arabia and Russia, who spent a week cajoling Iraq, Nigeria and other laggards to fulfill their obligations. It’s a particular vindication for the kingdom’s Energy Minister Prince Abdulaziz bin Salman, who has consistently pushed fellow members to stop cheating on their quotas since his appointment last year.With the cartel’s video conference now under way, delegates said all nations have agreed to the new deal. The group will maintain its production cut of 9.7 million barrels a day to the end of July, instead of easing it to 7.7 million after this month as planned.In addition, the meeting’s draft communique states that any member that doesn’t implement 100% of its production cuts in May and June will make extra reductions from July to September to compensate for their failings.Oil has just posted a sixth weekly gain in London, more than doubling to $42.30 a barrel since April as traders anticipate tighter supplies as demand recovers from the coronavirus lockdowns. U.S. President Donald Trump on Friday hailed the cuts from the Organization of Petroleum Exporting Countries and its allies for saving the American energy industry.Daunting Challenge“Despite the progress achieved to date, we cannot afford to rest on our laurels,” Mohamed Arkab, Algeria’s energy minister and current OPEC president, said at the start of the meeting. “The challenge that we face remains daunting.”The group hopes to build on its success by pushing the market into a supply deficit next month, using a price structure called backwardation to start to chip away at the billion barrels of oil stockpiles that built up during the pandemic.Read: OPEC+ Tries Novel Strategy to Turn Oil Price Curve Upside DownThe cartel will meet again in the second half of June for another review of the oil market. Talks are scheduled on June 18 for the Joint Ministerial Monitoring Committee, which could recommend a further extension if it’s deemed necessary, pushing the deep production cuts into August, a delegate said. The panel will meet every month until December, according to the draft communique.Cutting production is always painful for oil-dependent states. Iraq in particular needs every penny because it’s still rebuilding its economy following decades of war, sanctions and Islamist insurgency.Iraq made less than half of its assigned cutbacks last month, so compensating fully would require it to slash production by a further 24% to about 3.28 million barrels a day, according to Bloomberg calculations. Accepting such terms could risk a backlash from Iraqi parliamentarians and rival political parties for bowing to foreign pressure.Read: Oil’s Fragile Peace Is Threatened by Iraq’s Desperate RealityThe traditional shirkers in OPEC+ have promised many times before to do better. Some analysts were skeptical that this occasion will be any different.“Everyone saves face with this agreement,” Jan Stuart, global energy economist at Cornerstone Macro LLC, said on Friday after a tentative deal was in place. “But it begs the question: What is the enforcement mechanism? I’m very curious to see how the organization is going to elicit greater compliance from the cheaters.”There’s also a risk that future OPEC+ curbs could be undermined by a return of Libyan oil. The civil war there halted more than 1 million barrels a day of production, helping OPEC+ rebalance the market, but a cease fire now opens the door for a gradual recovery of supply.For now at least, members of OPEC+ can enjoy the price gains resulting from their deal. The recovery has eased pressure on the budgets of oil-rich nations, while also reviving the fortunes of energy companies from Exxon Mobil Corp. to shale drillers such as Parsley Energy Inc.“The oil market is on its way to recovery. Supply has shifted dramatically already,” said Ann-Louise Hittle, oil analyst at consultant Wood Mackenzie Ltd. “At the same time, global demand is recovering with both May and June climbing from the low seen in April as the coronavirus-related shutdowns continue to ease.”(Updates with details of draft communique in third paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
DocuSign, Inc. (NASDAQ:DOCU) last week reported its latest first-quarter results, which makes it a good time for…