Buy Cerus Corp. (CERS) Ahead of, and After, Earnings Report

By Joe Duarte • May 3, 2016

This is a special situation for a stock that remains a long term holding in our Breakthrough Tech portfolio.

Cerus Corp. is expected to report earnings on May 3^rd, 2016. after the stock market close. Estimates are for an earnings loss of 16 cents per share and $8.29 million in revenues. A review of the last four earnings reports shows that the stock is nearly 24% higher within six weeks of the release of earnings. If this pattern holds up the stock may move as high as $8 per share from above. It’s important to note that the shares may dip in price after the report, so a good strategy is to buy a few shares ahead of the report and to buy the rest of the position if the stock dips.

What may make this stock move in the next few days is its connection to the Zika virus. Reuters reported on 4/29/16 that Puerto Rico registered its first Zika related death in February. Cerus makes the Intercept system for the neutralization of parasites and viruses in platelets and plasma. The company has been steadily increasing its market share and is expecting the FDA’s decision on the use of the Intercept system for use in red blood cells. If the FDA approves Intercept for use on red blood cells, the stock is likely to move significantly higher given the growth potential for the company’s earnings and revenues.

Disclosure: I own shares in CERS.

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Tysonstom

05/05/16 ‐ 8:04am ET May 5, 2016 at 8:04am ET

It lost 17 cents rather than the 16 expected and the stock dropped 5.5%. What do you recommend now?

Joe Duarte

05/05/16 ‐ 1:03pm ET May 5, 2016 at 1:03pm ET

No change in recommendation. The stock seems to be reacting as it often does after earnings. As I stated in the recent Alert, the odds are good for a possible rise in price to near $8 if the pattern holds up.

C. Fisher

10/27/16 ‐ 3:17pm ET October 27, 2016 at 3:17pm ET

Can you comment on CERS before earnings? It seems to be sinking. Nothing I see has changed. One recent sell but lots of background buys and strong buys. (Reuters) I recently read on a post that some stocks may be subject to Hi Freq Trading milking logarithims. Is that a real thing? Using big money to drop the stock or increase it and take advantage before the tide turns

10/27/16 ‐ 10:44pm ET October 27, 2016 at 10:44pm ET

Re: CERS. This company has a sound product, the INTERCEPT system for blood decontamination, that is being deployed, in my opinion, too slowly. And the FDA is dragging its feet to approve it for red blood cells. I don’t expect any spectacular earnings. I also think that the stock is getting caught in the election fear as are other health care stocks. It would be a shame if investors gave up on it. But it could happen in this environment. I own shares in CERS and don’t plan to sell them for now. I. like you, have not found any specific reason for the selling. My biggest concern is that it’s taking too long to get INTERCEPT approved for red blood cells. High Frequency Trading is bad for many stocks. CERS may be one of them too. Joe Duarte

10/28/16 ‐ 8:23am ET October 28, 2016 at 8:23am ET

Thank you.

03/10/17 ‐ 12:13pm ET March 10, 2017 at 12:13pm ET

Can you update cers?

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