Should you buy today's biggest winner or biggest loser?

Investing in the FTSE 100
Investing in the FTSE 100

Clinical stage biopharmaceutical company Motif Bio(LSE: MTFB) has slumped by as much as 21% today after announcing the postponement of its proposed public offering of American Depositary Shares (ADSs) on the NASDAQ Global Market. However, the company intends to continue to engage with investors and will provide a further update to the market in due course.

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Motif Bio had intended to raise up to $60m from the move to fund its flagship drug iclaprim's phase III clinical trials. Although today's news doesn't necessarily mean that funding will be lacking for the potential new treatment, it has caused investor sentiment towards Motif Bio to come under severe pressure. However, with the company stating that today's move is a deferral, it could be a case of an overreaction by the market.

Still, Motif Bio is likely to remain highly volatile in the short run owing to doubts surrounding its near-term strategy. Therefore, it may be prudent for investors to watch, rather than buy, the company at the present time.

Certainly, it has significant long-term potential and the multi-drug-resistant bacteria space is set to be a major growth area as 'superbugs' are emerging at a faster pace than new antibiotics are being developed. And with Motif Bio having an experienced management team and a sound strategy to build its treatment pipeline, its shares could continue to rise over the long term following their 20% gain since the start of the year. However, until more clarity is forthcoming regarding its public offering, it may be a good idea to look elsewhere for healthcare investments.

Value for money

While Motif Bio is among today's major fallers, STM Group(LSE: STM) is among the biggest winners. STM's shares are up by as much as 16% following the release of an update that shows the cross-border financial services provider has seen its new business numbers increase by 28% in July.

This follows an adjustment to STM's pricing strategy for its core product, QROPS, with this being done to stimulate and drive new business growth for the benefit of future recurring revenue. And with new business applications in July representing the highest month of applications over the last year and a 75% uplift on the average number of applications of the first four months of the year, the pricing adjustment seems to be having its intended result.

Looking ahead, STM is forecast to increase its earnings by 23% in the current year and by a further 33% next year. This has the potential to act as a further positive catalyst on its share price and with STM trading on a price-to-earnings (P/E) ratio of just 8.2, it seems to offer good value for money for less risk-averse investors.

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Peter Stephens has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

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