2 Strong Buy Penny Stocks That Could Generate Massive Returns
The long-term uptrend in the markets is marked; the S&P 500 is up 51% over the past 12 months, even after accounting for a few recent slips. For investors, this makes now a good time to look for low-cost market segments with high return potential. Or in other words, take the advice of the old days and buy low to sell high. Jefferies equity strategist Steven DeSanctis, in a recent note on the themes of small-cap markets, points out that this segment is attracting the attention of investors. “We are seeing interest in the size segment and we are learning that institutional investors are really interested in adding assets to the size segment. This makes sense to us, as small caps as a percentage of total exposure to the US stock market are still well below its 90 – a historic year as investors clamored for large caps, big growth and the FAANG names. . We estimate that more than $ 38 billion has been invested in small caps in the past five months, the largest influx since we started tracking data until 2006, or 4.6% of total assets. , close to a record level. We also estimate that about 45% of all flows go to passive investing, which drives performance, ”DeSanctis wrote. And that brings us to penny stocks, those low-priced stocks of less than $ 5 a share – are a high-stakes opportunity with benefits often approaching several hundred percent and a cost of entry low enough to mitigate the risk. associate. These stocks come at a low price for a reason, but for those that do, the rewards are huge. With that in mind, we used the TipRanks database to focus only on those penny stocks that 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 enormous upside potential. ADMA Biologics (ADMA) We will start with ADMA Biologics, an end-to-end biopharmaceutical company, which develops and markets blood plasma-derived products that can be used to treat infectious diseases – and more importantly, to help prevent such diseases. in the first place. ADMA, in 2020, saw the expansion of two products for the treatment of primary humoral immunodeficiency (PI). These products, Asceniv and Bivigam, are both derived from human blood plasma and deliver immunoglobulins to the patient by intravenous injection. In any business, success is measured in cash. ADMA achieved this goal by posting a 44% increase in total revenue in 2020, with revenue reaching $ 42.2 million. This is due to increased sales of the Company’s main intravenous immunoglobulin (IVIG) products. Going forward, ADMA recognizes the underlying fact of its products – that they are derived from human blood products and therefore depend on voluntary donations. The company currently has 7 operational plasma collection centers, with COVID safeguards in place, and plans to open two more this year. Longer-term expansion plans include opening 10 more centers by 2024. Right now for $ 1.55 each, street pros believe ADMA’s stock price is offering investors an attractive entry point. Among the bulls is Maxim’s 5-star analyst Jason McCarthy, who clearly sees the way forward for the company. “Management is executing its strategy and after a positive year, but impacted by COVID-19, ADMA is poised to make a breakthrough in 2021. Multiple initiatives are expected to lead to acceleration in revenues and margins. In particular, ASCENIV’s new J code and multiple manufacturing initiatives, including the new fill-finish machine and the expansion of BIVIGAM’s capacity to ~ 4400 L, are expected to drive sales and accelerate margins. at 2H21, “McCarthy said. The analyst added,” There is an assessment of Disconnection between the company’s plasma collection facilities + sales potential vs market capitalization, in our opinion. Grifols recently acquired 25 US-based plasma centers for ~ $ 370 million, valuing each center at ~ $ 15 million. ADMA has 7 centers in different stages of development / approval and plans to grow to 10 fully operational by 2024. The company is already on a run-rate of around $ 55 million, with accelerating sales and a potentially rate of around $ 250 million by 2024.. Management is running and we believe that the intrinsic value of plasma facilities and approved products should already exceed the market capitalization of the company. “In line with those expectations, McCarthy is awarding ADMA a Buy, and its price target of $ 6 indicates confidence in a solid 266% growth potential for the coming year. (To see McCarthy’s track record, click here ) It is clear from analyst consensus that McCarthy is not an outlier on this stock. ADMA has had 4 recent valuations, and all must buy, making the consensus note a strong unanimous buy. The average price target of 7 , $ 67 is even more bullish than McCarthy’s and suggests a one-year rise of 393%. (See ADMA market analysis on TipRanks) Catalyst Biosciences (CBIO) The next stock we’ll be looking at, Catalyst Biosciences, works in the biopharmaceutical industry, where it researches unmet needs in rare disorders of complement and coagulation systems.The company has a protease engineering platform and its hemostasis development program includes two p Advanced stage clinicalists. The supplement pipeline is still in preclinical development and includes four separate drug candidates. Catalyst took a major milestone in December last year, when the FDA granted Fast Track designation for the company’s most advanced pipeline product, marzeptacog alfa (activated) or MarzAA. The fast-track designation will give Catalyst more opportunities to work hand-in-hand with the FDA in the development of MarzAA and may involve priority review if it meets its goals in the studies. MarzAA is a new generation coagulation factor VIIa designed for the treatment of episodic bleeding in patients with hemophilia. He is currently entering a Phase 3 trial with plans to recruit 60 subjects. The company plans to send its final report to the Data and Security Oversight Committee in mid-2022. CBIO’s strong pipeline has earned it high praise from Piper Sandler analyst Tyler Van Buren. “In our opinion, the catalytic power of the company’s protease platform continues to be underestimated due to a lack of familiarity. For the first time in 2021, we look forward to data from the phase III trial of MarzAA, which may support a 2023 approval. Phase I / II in Glanzmann’s thrombasthenia (over 1,600 patients) and in d Other indications will also be in progress. For proteases targeting the complement of Catalyst, we anticipate that an observational trial will begin shortly in CFI deficiency, which should provide a bolus of patients to enroll in phase I for CB 4332 next year. There is also significant upside potential related to the expansion of CB 4332 into other indications, and the rest of the complementary franchise which includes CB2782-PEG, a new anti-C3 protease for dry AMD, and others. degrading C4b, ”Van Buren wrote. With the active development agenda in mind, the analyst summed up: “Ultimately, we… recommend that investors accumulate stocks ahead of the launch of upcoming studies and clinical readings throughout the year. . ” These bullish comments corroborate the analyst’s overweight (ie buy) rating on the stock. Its price target of $ 15 implies an increase of 229% for the next 12 months. (To see Van Buren’s track record, click here) What does the rest of the street think about the prospects for CBIO? It turns out other analysts agree with Van Buren. The stock has received 4 buys in the past three months compared to no takes or sells, making the consensus rating a strong buy. CBIO shares are currently trading at $ 4.69, and the average price target of $ 18.50 brings the upside potential to 296%. (See CBIO Stock Market Analysis on TipRanks) For great ideas for trading penny stocks at attractive valuations, visit TipRanks Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks . Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.