Bioceres: Small Cap With Conference Appearances After Earnings

It is conference season on Wall Street. Investors must pay close attention to corporate events that might impact the stocks they own. One Materials sector company, a small cap, features three potentially market-moving conferences/forums at which the firm’s management team is expected to speak. Often at these gatherings, fresh industry news and trends are presented along with key updates on individual companies.

The Materials sector is particularly interesting right now given a slew of macro headwinds impacting both domestic and foreign firms. Weather-related trends are also constantly in the news this summer. One Argentina-based Chemicals stock has been resilient in the face of so much uncertainty from interest rates to currencies to climate change.

According to CFRA Research, Bioceres Crop Solutions Corp. (NASDAQ:BIOX), together with its subsidiaries, provides crop productivity solutions. It operates through three segments: Seed and Integrated Products, Crop Protection, and Crop Nutrition. The $846 million market cap Argentina-based Chemicals company in the Materials sector has slightly negative GAAP earnings over the past 12 months and does not pay a dividend, according to The Wall Street Journal.

On valuation, earnings are seen as rising this year and next, according to CFRA’s forecast. Assuming $0.55 of EPS next year, the stock trades at a high 25-times forward earnings multiple. On a price-to-sales ratio basis, the value is not as high: just 2.3x. For context, according to Koyfin Charts, Bioceres’ price-to-sales ratio peaked near 3.0x in mid-2021 with a low of 0.8x in late 2019.

Bioceres: Earnings Outlook

BIOX: Historical Price-To-Sales Ratio Trend

Looking ahead, Wall Street Horizon’s data show three events that could influence BIOX shares over the coming two-plus months.

1. Credit Suisse 35th Annual Specialties & Basics Conference 2022: Sept 13-14
2. Lake Street Capital Markets 6th Annual Best Ideas Growth Conference 2022: Sept 14
3. S&P Global Crop Science Forum 2022: Nov. 10

There’s also a critical Q4 2022 earnings date before the open on Thursday of this week, with an earnings call immediately after results are released. Investors can listen live here.

Corporate Event Calendar: Earnings & Conferences Provide Volatility Catalysts

The Options Angle

Focusing on this week’s key stock-moving event: Q4 earnings. Option Research & Technology Services (ORATS) data show a consensus forecast of $0.16. The options market has priced in a 6.8% share price swing post-earnings using the nearest-expiring at-the-money straddle. Historically, BIOX has not moved very much after issuing quarterly results, so perhaps a short options play could make sense here. Take caution, though, as the company has a poor EPS beat rate history, per ORATS data.

BIOX: Earnings Improvement Expected, A 7% Post-Report Move Priced In

The Technical Take

BIOX has been a relative winner this year. A sideways trend is incredibly impressive amid a global bear market. Interestingly, both BIOX and the Global X MSCI Argentina ETF (ARGT) are almost flat on the year while the S&P 500 ETF (SPY) is down more than 17%, including dividends. So there’s relative strength in a niche you might have overlooked.

BIOX has important resistance in the $15.50 to $16.50 range while support rests in the $9.00 to $9.50 area. These are the key ranges off which to trade. If the stock can close above $16.50, that would trigger a bullish measured move price objective to about $23. I’d like to buy this more on the dip for a better risk/reward – perhaps around $11. But being long here is still fine based on the notable relative strength.

BIOX: Relative Strength With Defined Price Levels To Monitor

The Bottom Line

BIOX looks like a buy after earnings cross the wires. EPS is expected to turn into the black while Bioceres’ technical setup is strong. But a bad beat-rate history makes me cautious to recommend a buy right now. The options market has discounted about a 7% swing, so expect the stock to range from $12 to $14.50 in the coming days.