27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
vTv Therapeutics Inc (NASDAQ:VTVT) shares have outperformed Axovant Sciences Ltd (NASDAQ:AXON) shares by 63 percent since Chardan recommended owning the former over the latter in January 2016.
The Analyst
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Chardan analyst Gbola Amusa has a Neutral rating on Axovant and a $2 price target.
The Thesis
Chardan's premise behind its earlier recommendation of owning vTv Therapeutics over Axovant was based on the former having a Phase 3 asset – azeliragon - in Alzheimer's disease, Amusa said in a Thursday note. The analyst said azeliragon data was superior over Axovant's RVT-101 data.
Notwithstanding several parallels between azeliragon and RVT-101 programs, the analyst said a striking difference existed in the valuations of both companies at the time of his 2016 call. Compared to Axovant's $1.7 billion market-cap in Jan. 2016, vTv Therapeutics had a paltry valuation of C$200 million, the analyst noted.
With Chardan's bearish thesis on Axovant having played out following the failed pivotal late-stage MINDSET trial that evaluated the company's intepirdine in mild-to-moderate Alzhiemer's disease, the firm said valuations of Axovant ($168 million) and vTv Therapeutics ($156 million) have now converged.
Thus, the call to close out to pair trade.
Price Action
Over the past year, Axovant has lost about 90 percent compared to a more modest 20 percent drop by vTv Therapeutics.
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27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.