We recently compiled a list of the 10 Best Performing Stocks in 2024. In this article, we are going to take a look at where Summit Therapeutics Inc. (NASDAQ:SMMT) stands against the other great-performing stocks.
Dow Breaks Record
The Dow Jones Industrial Average has recently made headlines by closing above the 42,000 mark for the first time, a significant milestone that reflects a surge in investor confidence following a substantial interest rate cut by the Fed. This momentous achievement occurred on September 19, when the Dow jumped over 500 points, closing at 42,063.36. This rise was part of a broader trend in the stock market, with major indices experiencing overall gains throughout the week, largely fueled by optimism surrounding the Fed’s decision to lower interest rates by 0.5%.
On September 21, Edward Yardeni, president of Yardeni Research, while acknowledging that the market tends to keep rising, also discussed the warning signs of a melt-up, in the context of the markets’ response to the September rate cut on CNBC’s ‘Closing Bell’. He doubted the necessity of such a large rate cut, suggesting that the economy is currently growing at about 3% year-over-year and could potentially grow even faster. Yardeni noted that while productivity gains are expected to be more pronounced shortly, he would have preferred to see the market stabilize for a while instead of continuing its upward trajectory.
Yardeni provided his forecast for the market’s potential growth. In his base case scenario, he predicted that the Dow could reach 5,800 possibly by next week. However, he also entertained an alternative scenario where the market might exceed 6,000 before experiencing a correction. Still, he does not foresee a bear market as a recession is unlikely.
While discussing investment strategies, Yardeni highlighted that with small-cap and mid-cap stocks showing signs of improvement in valuations, there is an indication that investors should consider diversifying their portfolios beyond large-cap stocks. However, concerns remain regarding mid-cap earnings, which have not shown significant growth recently. Lower interest rates might eventually provide some uplift to these earnings.
Chicago Fed President Austan Goolsbee has indicated that many more rate cuts may be necessary over the next year due to signs of weakness in the manufacturing sector. CNBC’s Rick Santelli, who was reporting on September 23, noted that while manufacturing has faced challenges, there are indications it might be recovering slightly, as evidenced by a recent production increase of 0.8%.
He referenced comments from Treasury Secretary Janet Yellen, who stated that the economy is experiencing strong growth and robust consumer spending, which he believed contradicted the concerns raised by Goolsbee. Santelli pointed out that the Dow Jones Industrial Average is currently at all-time highs, suggesting that market sentiment remains positive despite underlying economic weaknesses.
Further discussing the economic landscape, he remarked on the currency markets, noting that the US dollar has fallen to its lowest level since March 2022. In contrast, the euro has reached its strongest level since April 2022. This shift in currency dynamics reflects broader economic trends, with Santelli suggesting that Germany’s economic situation appears significantly weakened compared to its previous state.
On the topic of interest rates, Santelli reported that since Tuesday’s market close and following the Fed’s easing on Wednesday, two-year note yields have decreased by 3 basis points, while ten-year note yields have increased by ~9 basis points. He emphasized the importance of monitoring these changes closely as they could indicate shifting investor sentiment regarding future economic conditions.
While Santelli’s discussion underscores a complex economic environment where mixed signals from various sectors create uncertainty, the Dow continues to hover around its record highs and investor sentiment remains cautiously optimistic. Market participants are closely monitoring economic indicators and Fed policies to capture future trends. In this context, we’re here with a list of the 10 best-performing stocks in 2024.
Methodology
We used stock screeners to look for companies trading over $10 billion. We then selected the top 10 stocks with the best year-to-date performance and that were also the most popular among elite hedge funds. The stocks are ranked in ascending order of their year-to-date performance.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A laboratory employee in a sterile environment inspecting a microscope focused on a Clostridioides difficile infection sample.
Summit Therapeutics Inc. (NASDAQ:SMMT)
Year-to-Date Performance as of September 23: 722.61%
Market Cap as of September 23: $15.35 billion
Number of Hedge Fund Holders: 17
Summit Therapeutics Inc. (NASDAQ:SMMT) is a biopharmaceutical oncology company focused on the discovery, development, and commercialization of patient, physician, caregiver, and societal-friendly medicinal therapies intended to improve quality of life and increase the potential duration of life, with a mission to address unmet medical needs in rare genetic diseases.
Over the past few months, Summit Therapeutics Inc. (NASDAQ:SMMT) has made significant progress in raising awareness of ivonescimab and its mission to develop innovative treatments for serious oncology needs. Its partner Akeso conducted two successful Phase 3 clinical trials, HARMONi-A and HARMONi-2, for ivonescimab in non-small cell lung cancer, yielding positive data.
The company announced a 5-year strategic collaboration with MD Anderson to accelerate ivonescimab’s development, complementing its ongoing collaboration with Akeso, which continues to generate positive patient data in lung cancer and other solid tumors.
Over 1,800 patients worldwide have been treated with ivonescimab in clinical studies conducted by Summit and Akeso. There are currently 20 ongoing clinical trials evaluating ivonescimab globally. While the current Phase 3 programs focus on non-small cell lung cancer, seven trials are exploring its potential in other solid tumors.
The partnership with Akeso has been instrumental in advancing ivonescimab’s development. Since the collaboration began in early 2023, the company has successfully enrolled patients in HARMONi and HARMONi-3 clinical trials and secured presentations at several medical conferences.
The R&D expenses remained relatively stable in Q2 2024, with GAAP spending at $30.8 million. Acquired IP R&D expenses increased to $15 million in Q2 due to a licensing agreement amendment. G&A expenses rose to $14 million (GAAP) in Q2. Overall, non-GAAP operating expenses remained consistent at $33.7 million.
The company repurchased $250 million of its 2028 senior secured notes, raised $350 million in equity capital, and received $200 million in unsolicited capital. These actions have improved the company’s financial outlook and extended its cash runway.
Overall SMMT ranks 1st on our list of the best performing stocks in 2024. While we acknowledge the potential of SMMT as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SMMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
