Morning Trade for April 22nd 2021

Stocks were flat in early trading after snapping a two day losing streak in the previous session.  The three major benchmarks each saw significant gains yesterday.  The S&P 500 and the Dow each advanced 0.93% while the Nasdaq gained 1.19%.  Small caps were particularly strong, with the Russell 2000 ending the day 2.35% higher for its best day since March 1. Let’s see if yesterday’s gains will stick.  

Companies tied to the economic reopening are leading the way these days.  Today’s trade alert highlights a firm that stands to benefit as more and more U.S. citizens receive the vaccine and the public picks up where they left off with pre-covid plans for non-emergency medical procedures.

NeoGenomics (NEO), an oncology testing and research laboratory, is still coming out from under the pressure of the pandemic, which led to the cancellation of legions of procedures.

But there’s been quite a lot of activity at the company, nevertheless, and analysts still see it as one of the better small-cap growth stocks to buy.

In February, the company said longtime Chairman and CEO Doug VanOort would step aside to become executive chairman in April.  He was succeeded by Mark Mallon, former CEO of Ironwood Pharmaceuticals (IRWD).  The following month, NeoGenomics announced a $65 million cash-and-stock deal for Trapelo Health, an IT firm focused on precision oncology. 

Although COVID-19 has been squeezing clinical volumes, analysts by and large remain fans of this small cap’s industry position. 

“We continue to find the company’s leading market share in clinical oncology testing and expanding presence in pharma services for oncology-based clients to be a very attractive combination,” writes William Blair equity analyst Brian Weinstein, who rates NEO at Outperform. 

Of the 12 analysts covering NEO tracked by S&P Global Market Intelligence, nine call it a Strong Buy, two say Buy and one says Hold. With an average target price of $63.20, analysts give NEO implied upside of about 25% in the next year or so. 

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