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Why Zomedica Stock Is Zooming Higher Today

By Keith Speights – Aug 26, 2021 at 12:02PM

Key Points

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Investors appear to be bullish about the stock after a major investment bank disclosed earlier this week that it had bought shares of Zomedica.

What happened

Shares of Zomedica (ZOM -2.56%) were zooming 16.7% higher as of 11:40 a.m. EDT on Thursday after soaring as much as 37.9% earlier in the session. There wasn't any news from the company, though.

Instead, today's big gain appears to be a continuation of momentum from earlier this week following a filing Morgan Stanley (MS -0.26%) made with the U.S. Securities and Exchange Commission. That SEC filing revealed that Morgan Stanley had invested more than $1.6 million in Zomedica stock.

A veterinarian examining a dog.

Image source: Getty Images.

So what

It's good news that a major investment bank thinks highly enough of Zomedica that it's buying the animal healthcare stock. However, some context might be helpful. Morgan Stanley bought a little under 2 million shares. That's barely 0.2% of Zomedica's outstanding shares. 

Buying Zomedica just because Morgan Stanley did isn't a prudent move. On the other hand, investing because the business fundamentals could improve significantly in the future can be a good reason to buy a stock.

In this case, there are reasons to think that Zomedica's business could pick up relatively soon. The big question for investors, though, is whether sales will increase enough to justify the company's market cap of close to $500 million.

Now what

Zomedica expects that its fT4 assay for veterinarians to diagnose potential thyroid problems in animals will be available this fall. The company hopes its ACTH assay for testing animals' cortisol levels will be on the market by the end of the year. The rollouts of these assays could boost sales for Zomedica's Truforma diagnostic instruments.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Zomedica Pharmaceuticals Corp. Stock Quote
Zomedica Pharmaceuticals Corp.
ZOM
$0.19 (-2.56%) $0.01
Morgan Stanley Stock Quote
Morgan Stanley
MS
$87.28 (-0.26%) $0.23

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