2 Penny “hard buy” stocks that could reach $ 10 (or more)
LLet’s take a moment to talk about opportunities, the stock price, and risk / reward considerations. These are some of the factors investors should consider when investing in penny stocks – and we haven’t even addressed the fundamental strength of the company or its business model.
Penny stocks – as the name suggests, they once traded for a dime a share, but nowadays they’re seen as stocks trading under $ 5 – are a tough niche in the market. Critics of the penny stock make valid points when defending their position. Sure, the price may look like a flight, but the fact that stocks are trading at such low levels could reflect overwhelming headwinds or weak fundamentals.
That being said, the fans offer a solid argument as well. Not only does the low price mean you are getting more stocks for your money, significant returns are on the table as well. Even a seemingly insignificant share price appreciation can lead to colossal percentage gains that other better-known or more expensive names are not as likely to generate.
The nature of these investments is somewhat of a dilemma. How are investors supposed to separate the penny stocks that are ready to take off on an upward trajectory from those that should stay in the dumps?
To facilitate the due diligence process, we used TipRanks Database focus only on penny stocks that have received bullish support from the analyst community. We found two that are backed by enough analysts to achieve a consensus “Strong Buy” rating. Not to mention that each offers huge upside potential, as some analysts see them going up to $ 10 or more.
Aptinyx, Inc. (APTX)
We’ll start with Aptinyx, a company in the biopharmaceutical industry. Aptinyx is working on treatments for disorders of the brain and nervous system, developing new synthetic small molecule drugs for commercialization. The company has a proprietary NMDA receptor modulator discovery platform, which enables a novel approach to targeted disorders.
Aptinyx’s research pipeline currently has three compounds in clinical stages, all in phase 2 trials. NYX-458 is a potential treatment for Parkinson’s disease and Lewy body dementia, two serious central nervous disorders of aging. . Preclinical and phase 1 studies have shown robust activity in rodent models and favorable safety tolerance in human patients; The phase 2 clinical trial will focus on patients with mild levels of cognitive impairment and dementia.
NYX-783, the second compound in the pipeline, is being investigated for its efficacy in the treatment of post-traumatic stress disorder. An exploratory phase 2 study showed positive results in reducing symptoms in just 4 weeks of treatment, and the FDA granted this drug a Fast Track designation.
Finally, NYX-2925, the main drug candidate in the pipeline, is being investigated as a treatment for two conditions: fibromyalgia and diabetic peripheral neuropathy (PND). These are both chronic and painful conditions, and NYX-2925 has been shown to reduce pain levels in patients when tested at an early stage. The DPN study, like NYX-783 above, has the FDA Fast Track designation.
Based on the potential of the company’s drug candidates and its stock price of $ 2.84, several Street members believe now is the time to jump into the action.
Among the bulls is Leerink Analyst Marc Goodman which sees a series of catalysts coming to boost the stock.
“The stock has been trending down over the past few months mainly due to the lack of short-term catalysts, but we believe investors will start to focus a lot more on the name as of 2:21 am ahead of multiple data points in 2022. We continue to have a positive view of Aptinyx’s focus on NMDA receptor modulators and its pipeline opportunities… Aptinyx has a strong drug discovery platform as well as a library of over 1,000 compounds identified, which should allow continued expansion of the pipeline and support long-term growth, ”said Goodman explained.
To that end, Goodman credits APTX with an outperformance (i.e. a buy) with a price target of $ 12. Investors could pocket gains of 324% if Goodman’s thesis goes as planned. (To look at Goodman’s track record, Click here)
It’s not often that analysts all agree on a stock, so when it does, take note. APTX’s consensus strong buy rating is based on a unanimous number of 7 purchases. On top of that, the average price target is $ 10.67, which suggests robust growth of around 277% from current levels. (See APTX stock analysis on TipRanks)
Axcella Health (AXLA)
The next penny stock we’re looking at, Axcella, is another biotech company. Axcella uses endogenous metabolic modulators (EMM) as a springboard to approach new treatments for complex diseases, including non-alcoholic steatohepatitis (NASH, or fatty liver disease), as well as overt hepatic encephalopathy (OHE). These are two serious liver conditions and can have cascading consequences throughout the body.
For both leads, Axcella has completed the first clinical studies and is starting phase 2 trials. AXA1125, the drug candidate under development to treat NASH, started the EMMPACt Phase 2b clinical trial in May of this year. The study will recruit a total of 270 patients and will stratify them according to the presence or absence of type 2 diabetes and a significant complicating factor.
Also in May, Axcella announced positive clinical data for AXA1665, the drug being investigated as a treatment for HEO. The data showed that two different doses of the drug were found to be safe and well tolerated, and showed positive results compared to placebo. Both AXA1665 and AXA1125 have had their IND application approved by the FDA.
AXLA’s strong pipeline has garnered substantial praise from Chardan’s analyst Keay nakae.
“We consider that Axcella’s main active ingredient, AXA1665, is likely to exceed the benefits provided by current standard therapies of lactulose and rifaximin in EO, due to its inherent safety / tolerability profile and its inherent safety / tolerability profile. ability to target more aspects of EO than simply blocking absorption of ammonia in the gut. Beyond AXA1665, we also anticipate the success of AXA1125 in NASH; the NASH market is full of potential therapies, but also represents a very large business opportunity which we believe will allow the success of several market entrants. We expect AXA1125 to thrive as a basic therapy due to its impressive safety / tolerability profile due to its mechanisms of action, with the potential to advance in pediatric NASH earlier than its competitors in because of this security profile, ”noted the analyst.
In keeping with his bullish approach, Nakae gives AXLA shares a buy rating and his price target of $ 10 suggests a potential rise of around 186% for the coming year. (To see Nakae’s record, Click here.)
Other analysts are on the same page. With 3 more buy reviews, the word on the street is that AXLA is a strong buy. The shares are priced at $ 3.50, and the average price target of $ 11.25 suggests it’s about 222% up ahead. (See the analysis of AXLA shares on TipRanks)
To find great ideas for penny stocks traded at attractive valuations, visit TipRanks’ Best stocks to buy, a recently launched tool that brings together all the information about TipRanks shares.
Warning: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.