Microbot Medical Inc. (NASDAQ: MBOT): A breakout Stock on Improving Fundamentals
A 300% plus spike after underperforming in more than two years has caught even the most bullish investors by surprise. Microbot Medical Inc. (NASDAQ: MBOT) is the stock that is taking the medical device sector by storm, after a stellar start to a new year.
Microbot Price Analysis
After feeling the full force of short sellers in the past two years, the stock might as well have turned bullish. High turnover in traded shares, in the market, attests to growing investors’ confidence in the stock. The rally has come on investors reacting to improving fundamentals that have once again affirmed the company’s growth metrics.
Fuelling the upward momentum is a confirmation that the company has validated the effectiveness of its self-cleaning shunt (SCS) in an in-vitro laboratory study. The company’s balance sheet receiving a boost of $3 million is another development that continues to excite the market fuelling the upward momentum.
Recent price action activity indicates the stock has turned bullish as bulls remain in firm control. After the recent spike, the stock appears to be on its way to the $14 a share handle, which happens to be the immediate resistance level.
A breach of the resistance level should open the door for bulls to continue pushing the stock higher, probably to the sub $20 a share level. On the downside, sell-offs would experience strong support at the $7 a share level below which, short sellers could regain control and continue pushing the stock lower.
Why Microbot Medical Is Exploding
Microbot’s resurgence stems from renewed investor interest in the stock. Investor sentiments has inched a notch higher in recent days on the company touting the operational effectiveness of its self-cleansing shunt for the treatment of hydrocephalus.
Hydrocephalous is a type of brain condition whereby excess cerebral spinal fluid in the brain results in damage to brain tissue.
“We believe the performance of the SCS during this and previous studies gives us greater confidence to explore additional medical applications for the device in conditions where occlusion occurs, such as in the Traumatic Brain Injury (TBI) space,” Microbot Medical CEO HarelGadot said in a statement.
The announcement of encouraging results on the self-cleaning shunt has already caught the attention of institutional investors, further strengthening the stock’s sentiments in the market. The medical device company has since entered into a definitive agreement with an institutional investor for the purchase of 455,323 of the company’s common stock.
The company expects gross proceeds of $3 million from the transaction. Net proceeds from the transaction should go towards the development of the SCS device. In addition, the company has also entered into other definitive agreements for the purchase of an additional 250,000 shares of common stock at $10 a share. Microbot Medical expects gross proceeds of about $2.5 million from the transaction.
Microbot Medical is enjoying the best run in almost two weeks. The fact that the recent surge has come at the backdrop of improving fundamentals underlines the fact that 2019 could be a breakout year for the stock.