Karuna Story

<div class='circular--portrait' style='background:#800000;color: #F8F8FF;font-size:4em;'>KT</div>
KRTX -- USA Stock  

USD 77.10  1.66  2.20%

It looks like Dicerna Pharmaceuticals will continue to recover faster as its price went down 1.26% today to Karuna Therapeutics's 1.07%. As many baby boomers are still indifferent towards healthcare space, we will concentrate on both Karuna Therapeutics as well as Dicerna Pharmaceuticals. We are going to inspect some of the competitive aspects of both Karuna and Dicerna.
Published over a month ago
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Will Karuna Therapeutics (NASDAQ:KRTX) shadow Dicerna Pharmaceuticals price jump?
By analyzing existing basic indicators between Karuna Therapeutics and Dicerna, you can compare the effects of market volatilities on both companies' prices and check if they can diversify away market risk if combined in one of your portfolios. You can also utilize pair trading strategies for matching a long position in Dicerna with a short position in Karuna Therapeutics. Check out our pair correlation module for more information.

Let's begin by analyzing the assets. One of the ways to look at asset utilization of Karuna is to check how much profit was generated for every dollar of assets it reports. Karuna Therapeutics secures a negative usage of assets of -12.75 %, losing $0.13 for each dollar of assets held by the firm. Inadequate asset utilization conveys that the company is being less effective with each dollar of assets it secures. Strictly speaking, asset utilization of Karuna Therapeutics shows how discouraging it operates for each dollar spent on its assets.
Out of tens of thousands of stocks, funds, and ETFs that trade on global exchanges each represent an individual company which you can analyze using comparative analysis. To determine which one of the two companies, such as Karuna or Denali is a better fit for your portfolio, analyzing a few basic fundamental indicators is a good first step.

How important is Karuna Therapeutics's Liquidity

Karuna Therapeutics financial leverage refers to using borrowed capital as a funding source to finance Karuna Therapeutics ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Karuna Therapeutics financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Karuna Therapeutics's total debt and its cash.

What do experts say?

Stock analysis is a method for investors and traders to make buying and selling decisions. By studying and evaluating past and current data, investors and traders attempt to gain an edge in the markets by making informed decisions. It is good to see analyst projects for Karuna Therapeutics, but it might be worth checking our own buy vs. sell analysis

Correlation Between Karuna and Denali Therapeutics

In general, stock analysis is a method for investors and traders to make individual buying and selling decisions. Stock correlation analysis is also essential because it can help investors realize that they may not be as diversified as they think. Risk management strategies are usually required to make sure all portfolios are properly aligned against their risk tolerance level. You can consider holding Karuna Therapeutics together with similar or unrelated positions with a negative correlation. For example, you can also add Denali Therapeutics to your portfolio. If Denali Therapeutics is not perfectly correlated to Karuna Therapeutics it will diversify some of the market risks out of the positively correlated stocks in your portfolio. However, the disadvantage of this sort of hedging is that it can potentially affect your investment returns throughout market cycles. When Karuna Therapeutics for example, for example, performs excellent and delivers stable returns, the negatively correlated position you locked in as a hedge may drag your returns down. Please check pair correlation details between KRTX and DNLI for more information.

Note

Are you currently holding both Karuna Therapeutics and Denali Therapeutics in your portfolio? Please note if you are using this as a pair-trade strategy between Karuna Therapeutics and Denali Therapeutics, watch out for correlation discrepancy over time. Relying on the historical price correlations and assuming that it will not change may lead to short-term losses.

Exercise or conversion by Pande Atul of 5000 shares of Karuna Therapeutics subject to Rule 16b-3

Legal trades by Karuna Therapeutics insiders are very common, as founders, directors, or employees of any publicly traded firm often have stock or stock options. These trades are made public in the United States through the filing of Form 4 of the Securities and Exchange Commission. Below entry was recorded recently and is publicly available as an insider trade:
Karuna insider trading alert for exercise of option (right to buy) by Pande Atul, the corporate stakeholder, on 18th of September 2020. This event was filed by Karuna Therapeutics Inc with SEC on 2020-09-18. Statement of changes in beneficial ownership - SEC Form 4 [view details]   
Note, although insider trading is legal, in the United States, Canada, Australia, and Germany, for mandatory reporting purposes, corporate insiders are defined as a company's officers, directors, and any beneficial owners of more than 10% of a class of the company's equity securities.

Breaking it down a bit more

Cash and Equivalents Breakdown

Let me take a closer look at Karuna Therapeutics cash and equivalents. In accordance with the recently published financial statements, Karuna Therapeutics has 367.58 M in Cash and Equivalents. This is 55.22% lower than that of the Healthcare sector and 17.79% lower than that of the Biotechnology industry. The cash and equivalents for all United States stocks is 86.4% higher than that of Karuna Therapeutics. As for Dicerna Pharmaceuticals we see cash and equivalents of 669.21 M, which is 49.67% higher than that of the Biotechnology

Karuna367.58 Million
Sector447.12 Million
Dicerna669.21 Million
367.6 M
Karuna
447.1 M
Sector
669.2 M
Dicerna

Will Karuna price slide impact its balance sheet?

Potential upside is down to 6.93. It may suggest a possible volatility slide. Karuna Therapeutics shows above-average downside volatility for the selected time horizon. We advise investors to inspect Karuna Therapeutics further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Karuna Therapeutics future alpha.

Our Conclusion on Karuna Therapeutics

While some firms in the biotechnology industry are either recovering or due for a correction, Karuna Therapeutics may not be performing as strong as the other in terms of long-term growth potentials. The inconsistency in the assessment between current Karuna valuation and our trade advice on Karuna Therapeutics is due to the recent market swings and your selection of investing horizon. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Karuna Therapeutics.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Karuna Therapeutics. Please refer to our Terms of Use for any information regarding our disclosure principles.

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