Amarin (NASDAQ: AMRN) is one of the most talked about stocks in the BioTech space today. After a top analyst upgraded the stock last week, it climbed astronomically in end of week trading. However, the story seems to be a bit different this week, and people are starting to wonder why. So, today we’ll briefly discuss the analyst upgrade that led to the incredible increase in the value of Amarin (NASDAQ: AMRN) stocks toward the end of last week, take a look at the declines we’ve seen so far this week, and discuss whether or not Amarin (NASDAQ: AMRN) is headed for long term growth.
HC Wainwright Upgrades Amarin (NASDAQ: AMRN) Stocks To Buy!
On Thursday, a well respected analyst from HC Wainwright upgraded Amarin (NASDAQ: AMRN) stocks from a “Neutral” rating to a “Buy” rating. Upon the upgrade, the analyst increased the stock’s target price to $10; showing that he expects to see exponential growth from the stock over the long term. As a result, the value of shares of Amarin (NASDAQ: AMRN) started to skyrocket; gaining more than 20% per day on both Thursday and Friday.
Amarin (NASDAQ: AMRN) Stocks Started To Decline This Week
Unfortunately, the momentum just couldn’t be maintained. As soon as markets opened Monday, Amarin (NASDAQ: AMRN) stocks started to fall. Unfortunately, that fall has continued into trading today. After starting the day off yesterday at well over $3.20 per share, the stock fell dramatically in morning trading with slow downtrends throughout the day. By the end of the day, Amarin (NASDAQ: AMRN) stocks fell to $2.85 per share.
Today, we’ve seen much of the same in the price of Amarin (NASDAQ: AMRN) stocks. Throughout morning trading, the stock continued the strong downtrends. However, around 11:20 (when the stock was trading at $2.31 per share), things started to pick up. While much of the loss has been recovered, it doesn’t look like the stock is going to make it to the green today. Currently (2:58), Amarin (NASDAQ: AMRN) is trading for $2.49 per share after a loss of 12.63% so far today.
Why Are Amarin (NASDAQ: AMRN) Stocks Falling?
While looking at more than 10% losses on the value of a share two days in a row can be a bit hard to take, the movement is actually pretty natural. It’s all the result of investor excitement. When good news comes out about an asset, investors tend to pump money into the asset, hoping to bank on gains. However, when the gains start to roll in, it’s not uncommon for investors to put more and more money into the stock as they become more and more excited about the money they’re making. As a result, we tend to see dramatic uptrends like we saw with Amarin (NASDAQ: AMRN) stocks last week.
However, fast paced upward growth generally doesn’t last forever. At some point, investors start to realize that the value of a stock is growing too fast, and pull out to protect their investments. This is when the correction happens. While upward growth is warranted with Amarin (NASDAQ: AMRN), 20% growth per day is a bit too much! So, the market seems to be correcting the unwarranted excessive growth. Again, this is completely healthy for the stock.
Where Will Amarin (NASDAQ: AMRN) Stocks Go Long Term
To be honest, I think we’ve seen the brunt of the drop. Amarin (NASDAQ: AMRN) stocks have started to make a recover in end of day trading today and will most likely continue that recovery throughout the week. The bottom line is that the company is a great stock, and I agree with the target price of $10…it’s just not healthy to go from here to there over the course of two weeks; and with trends like we saw last week, that’s what would have happened.
What Do You Think?
Do you think Amarin (NASDAQ: AMRN) stocks are a good long term investment choice? Let us know in the comments below!