Three Reasons Why TransEnterix Is Poised To Jump Higher

By Unknown Monday, February 25, 2019
TransEnterix reports Q4 and FY 2018 earnings tomorrow morning. The company is nearing an inflection point, currently in the 5th quarter of its first capital sales cycle since the Senhance was FDA approved in October 2017. CEO Todd Pope has consistently guided a 4 - 6 quarter capital sales cycle for Senhance, so investors are looking for a material pickup in US sales in Q1 and Q2 of 2019.

TransEnterix pre-announced Q4 results in January, announcing the sale of five Senhance robots. Tomorrow's Q1 guidance during the conference call, and any guidance on U.S. sales in particular, is what should have the biggest impact on the stock price tomorrow, barring any surprise announcement (positive SurgiBot update, or a partnership akin to MDT/MZOR etc). Besides that, here are three reasons why I think TransEnterix will move higher.

1. TransEnterix moved up its earnings announcement by more than a week.

In 2016, 2017, and 2018, TransEnterix reported its Q4 and Fiscal year earnings during the first week of March, after the market close. This year, TransEnterix moved up its Q4 report by more than a week, and from after market close, to before market open. Studies have shown that when a company moves up its earnings report, specifically more than a week ahead of its traditional schedule, good news follows (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2480662&mod=article_inline).

2. The weekly MACD Histogram has just turned positive.

After ~5 months in negative territory, Trixie's weekly MACD histogram has turned positive, coinciding with a positive MACD convergence crossover. This can be a powerful signal that a big swing and momentum drive is imminent. Not only that, but since the beginning of this uptrend, which began with the lows in June 2017, the stock has continued to make higher highs and higher lows. A move past the previous $7 high would mark the continuation of this current 20 month uptrend.

3. The shorter term 30-minute chart confirms more upside ahead.

Higher highs and higher lows in both price and the MACD indicator are confirming the potential for more upside ahead. The daily RSI indicator below 70 also indicates that the stock is not considered overbought, another positive for a potential swing higher.

I am long shares and added $4 calls today as an earnings lotto play. Short term price objectives include the 200 week moving average ($3.57) and the 200 day moving average ($3.90). What do you think will move the stock higher, or lower? Leave your thoughts in the comment section below.
The Wall Street Fox

The Wall Street Fox utilizes fundamental and technical analysis to generate investment ideas. TWSF holds a MBA, and is currently preparing for the Chartered Market Technician (CMT) designation.

5 comments to ''Three Reasons Why TransEnterix Is Poised To Jump Higher"

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  1. There def is a positive market sentiment from retail. Todd Pope is conservative so when he says "rapid sales" my ears perk up.

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  2. The signs and signals today point to a lot of investor insecurity before the AM ER. I expect nothing bad, per se, but a nothing burger perhaps. And, of course, I hope for a stellar ER. Just prepared.

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