Are Analysts Right About These Penny Stocks?
Penny stocks are well-known for their volatile nature. The definition of these cheap shares refers to those trading under $5. So even a 50 cent move can be a meaningful gain or loss. For this reason, traders have flocked in droves to find the next round of penny stocks to buy. Does this mean all penny stocks aren’t worth investing in? Not necessarily, but it can be tricky to navigate these volatile waters in search of a viable company to grow beyond the $5 threshold.
This week especially, things have been increasingly volatile in the market. Stress stemming from inflationary fears, a flip-flopping dollar, and even interest rate jitters are hitting markets. Daily, we’ve seen broader markets in more of a whipsaw trend than anything else. This can make it very difficult to find lasting opportunities.
Obviously, when you’re talking about day trading, that’s one thing. But for those who aren’t able to spend dedicated time all day in front of a trading platform, this can be a difficult market to jump right into. For this reason, doing your research, understanding trading basics, and knowing how to manage risk are all very important. It’s also worth noting what the analyst community is saying. Are they bullish, bearish, cautious, etc.? This doesn’t mean to rely on analyst expectations solely. However, it isn’t a bad thing to fold their research into your own due diligence process.
Penny Stocks To Watch In May 2021
Despite the recent jolt of volatility in the market, analysts have remained optimistic on small-caps, in particular. Earlier this year, Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC’s “Trading Nation” that “You have amazing operational leverage on the small-cap size because those companies that survived now have a chance to really rebound with much leaner staff, and therefore much better profit margins.”
With this as the backdrop, we’re going to take a look at a few penny stocks that’ve captivated analysts recently.
- GT Biopharma Inc. (NASDAQ: GTBP)
- McEwen Mining (NYSE: MUX)
- Express Inc. (NYSE: EXPR)
- Mustang Bio (NASDAQ: MBIO)
- Bionanno Genomics Inc. (NASDAQ: BNGO)
Penny Stocks To Watch #1: GT Biopharma Inc. (NASDAQ: GTBP)
Something you will notice about this list of penny stocks is a few names that have left the penny stock range. Regardless, they are companies that we’ve continued following from the lowest sub-$5 levels. GT Biopharma is one of these companies. Not only has it catapulted in 2021, but it has also made a move in transitioning from the OTC to the NASDAQ. This has now put the company in front of the millions of Robinhood traders who only have access to NYSE and NASDAQ-listed companies.
The company has been in a bright spotlight as far as analysts are concerned. This year, Roth Capital put a Buy rating on the company along with a $25 price target. Then, this month B. Riley reiterated its Buy rating and affirmed its $21 price target.
B. Riley analysts Justin Walsh and Mayank Mamtani explained that “The longer you look, the better it gets” (click here for the full analyst report). Their main focus of the analysts was on the company’s GTB-3550 TriKE™ treatment platform. Right now, it’s being evaluated in a Phase 1/2 trial in patients with higher-risk myelodysplastic syndrome and acute myeloid leukemia. The analysts explained that they “believe that the future and clinical development pathway for GTB-3550 will be clearer by the end of the summer, with multiple potential outcomes providing opportunities for investors to benefit.”
You’ve also got Roth’s Tony Butler coming out with updated information this week (click here for full update). In his latest note, Butler explained that “We are particularly interested in what the recommended phase II trial might be.” Furthermore, the $25 price target is derived from a risk-adjusted net present value analysis of the utility of
GTB-3550 in acute myeloid leukemia and myelodysplastic syndrome in the U.S. and Europe (2024/26 launch, approx. $1.5-2 bn peak sales, 40-55% POS).
This week, the company reported its first-quarter results and, more importantly, gave a key business update. Anthony J. Cataldo, GT Biopharma’s Chairman and Chief Executive Officer explained, “Both from efficacy and safety perspectives, our GTB-3350 TriKE™ program appears to be delivering the TriKE’s unique therapeutic potential, which has been well-tolerated in all of our patients. Our differentiated approach stimulating NK cell activity reinforces our rationale to proceed with additional programs in solid tumor and hematologic cancers.”
With advanced phase trials underway, bullish analyst sentiment, and additional product candidates, GT Biopharma has remained on the list of (former) penny stocks to watch this month.
2. McEwen Mining (NYSE: MUX)
When it comes to putting together your watchlist, you’ve also got to consider certain market trends. This includes reading between the lines of major news stories. In this case, mining stocks have become a focus for traders. Considering the “safe-haven” nature of names in this sector, you can quickly see how the market’s volatility can play out favorably for this niche.
McEwen Mining has benefited from growing interest in mining stocks. This month, the company reported strong exploration results from its Stock West project in Ontario, Canada. This is part of a 2-year, $20 million exploration and delineation program at the Fox Complex. McEwen also gave a progress update on its $5 million drilling program at the Gold Bar mine property near Eureka, Nevada. New results derived from the program support the company’s confidence in the resource model driving operational improvement. According to McEwen, the new drill results from the San Jose Property in Argentina may have meaningful implications for ongoing exploration.
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Executive Vice President (Exploration) Stephen McGibbon commented on the results in a press release last week, saying, “The recent drilling results from Stock West are less than 1/3 of a mile (500 m) from our Fox Complex mill and are a great example of the near-term growth opportunities that will augment the Company’s strategic decision-making over the next two years.”
As far as analysts are concerned, Roth Capital maintains a Buy on the stock. Furthermore, the firm gave McEwen a $2 target.
Penny Stocks To Watch #3: Express Inc. (NYSE: EXPR)
The focus as of late has been on the reopening trade. If you’re unfamiliar with this trend, it applies to companies that were some of the hardest hit during the pandemic. Another term used by analysts like Tom Lee of Fundstrat is “epicenter stocks.” While these companies may have gotten hurt the most, Lee and others say they could progress the quickest upon increased vaccine distribution and reopening efforts.
Analysts at Wedbush recently adjusted their price target on EXPR stock to $5 from $1.50. The thought process behind this 233% increase in target came as the firm saw “better than expected business” QTD. It was also one of the top Reddit penny stocks wrapped into the massive short squeezes originating from chatter on the social media platform in January.
Needless to say, Express is more than just a “stock,” and as more people get back to work, the attire choices have changed. People are tossing aside their stretch pants for dress slacks and their t-shirts for button-downs. Express has even launched an initiative it’s calling #ExpressReentry. The company is posting to social media sites like TikTok featuring outfits being worn by users participating in the “challenge.” In particular, these influencers will highlight what they’ll wear as they get back to work& back to their favorite activities.
4. Mustang Bio (NASDAQ: MBIO)
Another hot sector of the stock market this year is in healthcare and health-related stocks. Mustang Bio has gotten much more attention this week and it may have a lot to do with recent coverage initiated by analysts at BTIG Research. The firm started Mustang with a Buy rating as well as an $11 price target.
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This comes in tandem with news that Mustang began dosing its first patient in a phase 1 trial of its MB-101 for treating leptomeningeal brain tumors. The company is working with the City of Hope, a cancer research center, to conduct these trials. The primary endpoints being evaluated are toxicity and survival at three months. Secondary endpoints include overall survival, CAR T and endogenous T cell levels, cytokine levels and phenotype detection in peripheral blood, tumor cyst fluid, and cerebrospinal fluid.
MB-101 has already shown therapeutic potential when infused into the ventricular system. This includes delivering a complete response in a patient with leptomeningeal glioblastoma, according to Mustang. This was detailed in the New England Journal of Medicine.
5. BioNano Genomics Inc. (NASDAQ: BNGO)
Shares of BioNano Genomics have red hot this year. Toward the end of 2020, BNGO stock was trading under $1. But by mid-February, the penny stock had reached highs of $15.69. The move came as a mix of Reddit attention and company milestones fueled big momentum in the market. While shares have slid lower since reaching those highs, it remains on the list of former penny stocks to watch right now.
Analysts at firms including Roth Capital, Maxim Group, and Oppenheimer have begun following the company within the last few quarters. Oppenheimer was the most recent and currently has a Buy rating and $14 target on BioNano. In a note to investors, analyst Kevin DeGeeter said, “If a series of clinical validation studies scheduled for presentation in 2020 confirm Saphyr performs as well as microarrays with faster turnaround time, we believe [Bionano] will be positioned for acceleration in revenue growth in 2021 and peak cytogenetics revenue of $75 million to $100 million.”
Earlier this month, the company reported its latest round of operating results. These included a sales beat, but the company showed a 179% year-over-year increase in revenue. These were driven mainly by sales of consumables and growth in its Saphyr installed base. Saphyr is the company’s research use only platform for ultra-sensitive and ultra-specific structural variation detection. This allows researchers and clinicians to speed up the search for new diagnostics and therapeutic targets. It also offers ways to streamline the study of changes in chromosomes, also known as cytogenetics.
This quarter the company is working on accreditation of Saphyr based lab tests for ALL and FAHD in certain EU markets. Then it’s aiming for the commercial release of prenatal assays and expanding its offering of pediatric assays in Q3.
Penny Stocks & Analyst Ratings
Remember that we’re still talking about small-caps and penny stocks. Volatility can play a big role. In addition, most of these companies are still either in the early stages of development or, in the case of reopening stocks, rebuilding their industry footing. Aside from what analysts have to say, it’s important to understand the landscape when you look at any stocks that analysts are covering.
On any given day, the overall sentiment may or may not line up with what these Wall Street firms have to say. Essentially, no matter what they report, you are the one pulling the trigger and buying or deciding to avoid certain companies. So far, however, many of these companies have performed well in light of their related analyst sentiment.
Pursuant to an agreement between Midam Ventures LLC and GT Biopharma (GTBP) Midam has been paid $150,000 for a period from March 1, 2021, to April 1, 2021. This compensation is payment 1 of 12 as part of a 12-month agreement between Midam Ventures LLC & GT Biopharma (GTBP), for a period from March 1, 2021, to February 28, 2022. Midam Ventures LLC expects to be paid $150,000 per month for a total of 12 months by GT Biopharma (GTBP). Midam has been paid an additional $150,000 for a period from April 2, 2021, to May 1, 2021. This compensation is payment 2 of 12 as part of the Agreement. Midam has been paid an additional $150,000 for a period from May 2, 2021, to June 1, 2021. This compensation is payment 3 of 12 as part of the Agreement. We may buy or sell additional shares of GT Biopharma (GTBP) in the open market at any time, including before, during, or after the Website and Information, to provide public dissemination of favorable Information about GT Biopharma (GTBP).
