Analysts Have High Hopes For These Penny Stocks
When it comes to penny stocks, they’re a dime a dozen. There are thousands of stocks under $5 to choose from. The biggest thing traders focus on is how to make money with penny stocks quickly. That’s one of the top reasons for trading these cheap stocks in the first place. There are rare occasions where some will invest in penny stocks. But, for the most part, people are looking to make a quick flip.
Herein can present some issues for new traders. There’s always that “voice” in the back of their heads saying “maybe it goes a little higher”. I can tell you, first hand, the number of novice traders who got caught in KODK, SPI, and other fast-moving stocks this year. Believing the hype is a surefire way to hold the bag.
Now, as I said, there are occasions that investing in penny stocks pays off. But everything is situational. If there’s a penny stock gapping up big in the morning, there’s a higher chance it sells off at the open, initially, than continues higher. That isn’t to say all penny stocks gapping up premarket are bad. It just means that if you find stocks doing that, it might be wise to see how the market opens, first, then observe the trend after things open a bit.
At the end of the day, your strategy is your own. But it’s good to use all tools at your disposal to make an educated decision on which penny stocks to buy. This leads me to my topic in the article today. Analysts are good sources of information. Many times they will find details in a company that might’ve not been immediately clear to the average trader. For those looking at longer-term swing trades or even investing in penny stocks, this insight is useful. However, just because an analyst says “Buy” or “Sell”, it shouldn’t force your hand into following blindly. If anything, use their research as part of your overall DD (due diligence). With that, do you agree with analysts saying these are penny stocks to buy now?
Penny Stocks To Buy [according to analysts]: Aduro Biotech Inc.
Biotech penny stocks have taken center stage this year. With the growing interest in coronavirus penny stocks, it’s been one of the clearest ways traders benefited from the pandemic. However, this trend has evolved. Not only are we seeing traders look at COVID stocks, but now they’ve become exposed to the speculative nature of biotech stocks in general. We’ve seen a jump in companies focused on immunotherapy and oncology.
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Aduro Biotech Inc. (ADRO Stock Report) has been one of the penny stocks to watch since early January. The company was collaborating with Merck for the initiation of its phase trials of MK-5890 in lung cancer patients. Following milestones achieved under that collaboration earlier this year, ADRO stock jumped from under $1.50 to highs of over $4. Since then, shares have traded in a volatile trend between $2 and $3.50.
Fast-forward a few months and Aduro Biotech is in the middle of a major acquisition. The company announced a merger with Chinook Therapeutics in June gaining immediate access to Chinook’s kidney disease portfolio. The closing of this deal remains the focus of investors recently. It has also attracted growing interest from the analyst community.
Most recently, H.C. Wainwright reiterated its Buy rating. It also gave a $3.75 price target for the penny stock.
Penny Stocks To Buy [according to analysts]: CHF Solutions Inc.
Another one of the penny stocks we’ve followed for a while now is CHF Solutions Inc. (CHFS Stock Report). It has been on our watch lists since the end of February. However, CHFS stock has been more of a trade than anything else. Shares have sporadically jumped for a day or two at most. The trend has been a consolidation period to follow. Needless to say, CHFS stock trades millions of shares per day on average and remains a stock to watch for many.
The summer was a big period of bullishness for the company. From June to early August, CHFS stock surged. Much of the focus was on the company’s Aquadex SmartFlow products. Specifically is was the use of its product line for fluid management of patients with COVID-19. After a strong earnings report, the company announced a large financing round that ultimately became the catalyst for the recent sell-off that CHFS stock experienced in August.
Needless to say, things are perking up at the start of October. First, CHF recently provided testimony to the U.S. International Trade Commission concerning medical supplies treating COVID. Following this, the company announced its initiatives for the 24th Annual Scientific Meeting of the Heart Failure Society of America from September 30 to October 6, 2020. This week the company presents study data on its Aquadex Therapy. In light of this, the market has begun picking up.
What is the CHFS stock forecast according to analysts? The most recent rating comes from Maxim Group which gave a Buy rating and $1.50 price target earlier this year.
Penny Stocks To Buy [according to analysts]: Antares Pharma Inc.
Antares Pharma Inc. (ATRS Stock Report) is another one of the penny stocks stuck in a bit of a volatile sideways trend this year. Since bounce back from the March sell-off, ATRS stock is stuck in a range between $2.50 and $3.25. It’s also moving in lock-step with its 50-day moving average. October 1st saw one of the bigger, single-day spikes in ATRS stock price after the company’s latest update. This has become cause for some interest in the stock.
Antares announced an exclusive license agreement with Ferring Pharmaceuticals for the marketed product NOCDURNA® (desmopressin acetate). Ferring researches, develops, manufactures and markets biopharmaceuticals. NOCDURNA is indicated for the treatment of nocturia due to nocturnal polyuria in adults who awaken at least two times per night to urinate, in the United States. The launch is expected later this quarter.
“This license agreement for NOCDURNA immediately expands our urology portfolio, which already includes XYOSTED, the best-selling branded testosterone replacement product in the United States…Furthermore, we believe NOCDURNA supports our commercial strategy to enhance our growth through the expansion of our proprietary product portfolio,” said Robert F. Apple, President and Chief Executive Officer of Antares Pharma.
Where do analysts stand on ATRS stock? Raymond James is the most recent analyst giving a Buy rating on the stock as well as a price target of $6; 104% higher than Thursday’s morning high.
Penny Stocks To Buy [according to analysts]: Spectrum Pharmaceuticals
Spectrum Pharmaceuticals (SPPI Stock Report) has been in a strong and consistent uptrend for months. Since the market sold off in March, SPPI stock has managed to climb from lows of $1.74 to highs of $5.11 last month. After some consolidation over the last few weeks, SPPI stock is gaining ground in October. First, if you look at the penny stock’s chart, you’ll see that SPPI has traded along its 50-day moving average for months. There was also a Golden Cross formed in September. While this isn’t a guarantee of bullishness, it is considered a bullish technical pattern.
The company itself is in the oncology niche of biotech. This has gotten a lot more attention recently especially after Gilead’s $21 billion buyout of Immunomedics. Late last month, Spectrum presented results from a Phase 2 clinical trial evaluating its poziotinib in previously treated non-small lung cancer at the European Society for Medical Oncology Congress.
Results showed positive and the market digested that information favorably. This month could be another “high risk” situation presented later on. The company previously announced that the Biologics License Application for ROLONTIS® (eflapegrastim) for the treatment of chemotherapy-induced neutropenia was given a Prescription Drug User Fee Act (PDUFA) date of October 24, 2020 bu the FDA.
For now, analysts remain bullish on the stock. In fact, JMP Securities recently initiated coverage on SPPI stock with a Buy rating. It also gave a price target of $12, 189% higher than its opening price on October 1st. I think a lot could depend on how things go moving forward for the company. In any case, SPPI stock has started off October on a high note. Do you agree with JMP’s analyst?