Are Analysts Bullish On Penny Stocks?
Penny stocks are riskier compared to blue-chip stocks. That’s inherently so, simply due to the facts of low prices, lower average liquidity, and higher speculation. Given that, however, traders look for penny stocks to buy every day. After Kodak woke up small caps last week, we’re seeing another big surge of interest in stocks under $5.
While a general consensus may place an assumption on penny stock companies having zero worth, that simply isn’t true. Now, are we talking about companies that can stand toe to toe with their large-cap peers? Probably not in most cases.
However, it isn’t unlikely for these emerging growth companies to build out a large enough footprint to either, eventually become direct-competition or develop into a prime takeover candidate. Analysts, in light of this thought, spend time investigating certain companies and begin placing ratings on them.
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Not all penny stocks are covered by analysts, however. There are also cases where there are infrequent updates to initial ratings. Some companies will see firms initiate coverage and that’s all you’ll hear from the firms for months or even years. On the other hand, some analysts issue buy and sell ratings along with price targets more frequently.
A lot of that has to do with the companies as well. In light of this, we’re taking a look at a list of penny stocks to buy according to analyst consensus. It’s up to you to decide if you agree enough with the firms to put stocks like these on your list this week.
Penny Stocks To Buy [according to analysts]: SELLAS Life Sciences Group Inc.
SELLAS Life Sciences Group Inc. (SLS Stock Forecast) had one of its highest share volume days on Friday. When the closing bell rang, more than 2.9 million shares had traded and SLS stock plugged in a high of $4.43. What appears to have been a catalyst behind the move was an update on financing. The company announced that it entered into securities purchase agreements with certain institutional and accredited investors to raise approximately $9.2 million. Financing deals can be tricky to sift through when it comes to penny stocks. Most of the time, companies will raise funds at a steeper discount to the current market.
SELLAS, however, announced this raise would be at a combined purchase price of $3.335 per share and accompanying warrant. If you look at the trading activity from Friday, it’s clear that SLS stock was trading well-below that figure when the news came out. It jumped from $3.06 to its high of $4.43 and pulled back to close around $3.56. With the closing expected to happen by this Tuesday, it will be interesting to see the market reaction.
According to the analyst consensus on the penny stock, the majority rate it a Buy. Ratings have been sporadic on the stock. The most recent came from Maxim Group. Aside from a Buy rating, Maxim also gave SLS a price target of $12. With a number of ongoing clinical trials for cancer immunotherapies, SLS has remained in focus during the 2nd and now 3rd quarters. Shares have climbed from around $1.50 to the $4.43 highs on Friday.
Penny Stocks To Buy [according to analysts]: CHF Solutions Inc.
CHF Solutions Inc. (CHFS Stock Forecast) has been on our watch lists since the end of February. At the time, the penny stock traded around $0.40. As of last week, CHFS stock reached a high of $0.97. This year, the company has been making progress with its ultrafiltration therapy. CHF’s Aquadex SmartFlow™ system is used for managing fluid overload in patients with renal and other diseases. When it comes to coronavirus, CHFS stock has become part of that “sector” in 2020.
Fluid overload has appeared to become an issue with critically ill children and adults. That includes patients hospitalized with COVID-19. Where the recent momentum seems to have stemmed from was the company’s July 30th update. CHF signed a distribution agreement with SysteMedic Ltd covering Israel and Palestine. This was the company’s second distribution partnership in the Middle East and brought its therapy availability to 16 countries outside the U.S. Something to consider heading into the week is that CHFS reports earnings.
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Its second-quarter 2020 financial results will be released on Tuesday, August 4 before the open. Could that pose some risks? Potentially, yes it could in the event that results miss and the company reports a questionable outlook. It could also experience the opposite if results and outlook are favorable. Considering the analyst consensus, it appears that firms have been bullish on the company and this round of earnings will be something to either prove them right or wrong in August.
Maxim Group is the most recent firm to issue a rating on CHFS stock. It gave it a Buy rating and price target of $1.50. Since February, CHFS has more than doubled while also crossing through major moving averages including its 50 and 200-Day. Those were previous levels of resistance.
Penny Stocks To Buy [according to analysts]: Lipocine Inc.
Lipocine Inc. (LPCN Stock Forecast) has been a force to reckon with since mid-March. The stock has jumped from a low of $0.301 to recent highs of $1.59 last week. Furthermore, on Friday, LPCN stock continued trading after hours and reached a post-market high of $1.69. This year we started following developments of Lipocine in late-February after some positive FDA news. The Agency indicated Lipocine’s approach to addressing the single remaining deficiency through the reanalysis of existing data in accordance with FDA feedback appeared to be a reasonable path forward.
The FDA requested that the information generated by the reanalysis be submitted as part of an NDA resubmission with a six-month Prescription Drug User Fee Act (PDUFA) clock. That PDUFA goal date is this month on August 28, 2020, so something to keep in mind. The NDA incorporates the reanalysis of existing data based on written feedback to address the single remaining deficiency discussed in the Post Action Meeting with the FDA. Lipocine previously missed 3 secondary endpoints on its TLANDO testosterone treatment, which sent the stock plummeting from over $2.80 to under $0.50 in late-2019.
Fast-forward to the second quarter of 2020 and the company has been working on advancing its pipeline further. In May Lipocine received RDA clearance for an investigational new drug application for a Phase 2 study of LPCN 1148. It’s a prodrug of bioidentical testosterone to treat liver cirrhosis. Furthermore, the company reported results of a preclinical study of its LPCN 1144 which demonstrated encouraging results according to the company.
The general consensus among analysts has LPCN stock as a Buy. H.C. Wainwright most recently issued its forecast. In addition to the rating, the firm also gave a price target of $3.
Penny Stocks To Buy [according to analysts]: Zosano Pharma Corporation
Zosano Pharma Corporation (ZSAN Stock Forecast) hasn’t had a dramatic jump compared to some of the other penny stocks on this list. However, over the last few months, ZSAN stock price has steadily recovered from 52-week lows in March. Shares hit a low of $0.405 after Zosano reported earnings and announced a few financing deals. In reference to the latter, this was what I was talking about earlier with SLS stock.
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ZSAN saw the opposite as prices slid following the news. Needless to say, the penny stock has been on the move higher ever since. ZSAN tested its 4-month highs again this past Friday. While it broke above Junes $1.12 mark during premarket trading on July 31 ($1.15), shares dipped back. to around $1 by the close.
The company has developed a transdermal microneedle patch system to deliver its formulations of existing drugs through the skin for the treatment of various indications. Last week, attention was on Zosano after traders began circulating a page on the company’s website. Specifically, the company posted that “Zosano is eager to rise to the challenge of responding to the COVID crisis by collaborating with vaccine developers to provide the first microneedle vaccine for at home application.”
Also, Zosano pointed out that, “Phase 1 clinical data for influenza vaccine showed that the microneedle coated tri-valent flu vaccine was comparable in immune response to the commercial IM injection.”
As far as analysts are concerned, there could be a bullishness to ZSAN stock. The general consensus has Zosano as a Buy. Most recently, H.C. Wainwright reiterated its Buy rating. It also gave ZSAN stock a price target of $4.
