Are Analysts Right About These Penny Stocks?
Whether you’re day trading or investing in penny stocks, everyone wants an edge. Some go to extreme lengths to stay 1 step ahead of the retail market. Whether it’s pouring through pages of filings or actually taking a trip to a company’s headquarters, the ways people look to “gain alpha” are endless. But if looking for the next plane ticket to Silicon Valley is a little over the top for you, other traders take a less intense approach. They will get familiar with industry research groups. These firms typically take up the heavy lifting when it comes to getting boots on the ground, so to speak.
Since their names are on the line, the top tier analyst firms will do their homework in finding the not-so-obvious information about companies in order to provide valuable data for their clients. While this isn’t always the case, traders and investors alike will take analyst ratings into consideration. While I don’t think it should be the only thing you look at, understanding what analysts see in certain companies may be helpful.
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In the stock market today, you may not think that penny stocks can gain interest from firms. But as you’ll read here, everyone from HSBC and Morgan Stanley, to Oppenheimer and H.C. Wainwright have given their forecast on penny stocks. Something to keep in mind is that analysts give their forecast and typically don’t adjust it for a while.
So even if certain penny stocks are rated a buy and others are rated a sell, situationally on any given day, that rating might not be accurate. This is why I say, don’t take ratings as the only reason you trade or avoid certain penny stocks. With this understanding, do you agree with analysts about these 5 penny stocks?
Penny Stocks To Buy [according to HSBC]: Ambev SA
If there’s been one sector that has catapulted during the 4th quarter it’s been consumer staples. News of a potential COVID vaccine paired with follow up information that doses would soon become available have helped give traditional consumer goods stocks a boost. Ambev SA (ABEV Stock Report) in particular has greatly benefited from this upbeat sentiment over the last 45 days. In fact, from November 2 up through this week ABEV stock has climbed nearly 40% so far.
What’s more, is that on Monday, analysts from HSBC upgraded their rating on the company. The bank moved ABEV from Hold to Buy, which, ironically, is in stark difference to Morgan Stanley’s actions last week. The firm actually downgraded the stock to Underweight from Equalweight. Whichever side of the coin you choose, it’s important to understand that Ambev may have begun seeing a stronger trend thanks to strength in the Brazilian and South American markets.
Ambev is the largest brewer in Latin America. It’s also the Brazilian arm of AB InBev (BUD Stock Report). If there’s one thing we know it’s that people drink because of any occasion. Happy, sad, celebrations, etc. you’re likely to see a beer in someone’s hand. Furthermore, the idea behind “reopening stocks” or “epicenter stocks” benefiting greatly from an economic turnaround has begun resonating with traders this month. Will ABEV be on your list of penny stocks to watch?
Penny Stocks To Buy [according to Cantor Fitzgerald]: Evogene Ltd.
Evogene Ltd. (EVGN Stock Report) is another one of the penny stocks we’ve discussed for some time now. Shares of EVGN stock have climbed from around 2.50 in mid-November to recent highs of $4.39 this month. A strong operating outlook revealed in its last quarterly update coupled with a bullish stance from analysts recently have helped spark this latest jump.
Last week, Cantor Fitzgerald slapped a $9 price target on the penny stock and initiated coverage with an Overweight rating on the stock. Evogene has a few different operating businesses including Biomica, Lavie Bio, Ag Plenus, and Canonic. Most recently, Canonic announced that it received approval from the Israeli Medical Cannabis Agency for the propagation of medical cannabis seedlings. This allows Canonic to move forward with the execution of its commercialization plan aiming to release its first product in Israel in 2022.
While this is a bit far off, the company’s other operating arms are something to keep an eye on. For instance, Biomica’s BMC128 has begun large-scale production following the successful completion of the initial R&D stage of drug product development and manufacturing. BMC128 is designated to treat certain cancer tumors.
“We are currently in discussions with a number of leading medical centers in Israel regarding conducting this proof-of-concept study, pilot study in 2021,” said Elran Haber, CEO of Biomica on Evogene’s November investor call.
Penny Stocks To Buy [according to H.C. Wainwright]: Jaguar Health Inc.
Jaguar Health Inc. (JAGX Stock Report) has seen a strong surge from the end of November and into early December. We’ve watched, first-hand, JAGX stock move from $0.2145 last Monday to highs of $0.4386 this week. The initial jump was sparked by the announcement of Jaguar’s plan to develop and commercialize its crofelemer treatment for an indication of prophylaxis and/or symptomatic relief of inflammatory diarrhea. Initially, it will be studied in a ‘long-hauler’ COVID-19 recovery patient population in Europe.
“Enteropathy, an inflammatory chronic syndrome typically affecting long-term HIV/AIDS survivors, brings on chronic diarrhea. We believe this situation is analogous to what we’re seeing right now in COVID-19 recovery patients who are suffering from long-term diarrhea or other gastrointestinal disfunctions.”
Lisa Conte , Jaguar’s president and CEO
This became a main driver for traders to grab onto. What’s more is that the company’s subsidiary, Napo Pharmaceuticals, Inc. along with Jaguar jointly entered into a fifth amendment to the accounts receivable purchase agreement with Oasis Capital, LLC, from May, 2020. Oasis agreed to purchase additional accounts receivable of the company related to the sales of the company’s Mytesi® drug product to Cardinal Health for the period of October 13, 2020 through December 2, 2020. The Sixth Tranche Accounts Receivable has a gross value of $3,810,587.04, representing customer billings over a 51-day period.
As far as analysts are concerned, H.C. Wainwright has a Buy rating on the stock with a $3 price target. That’s roughly 626% higher than the current market price.
Penny Stocks To Buy [according to Oppenheimer]: Cellectar Biosciences Inc.
Cellectar Biosciences Inc. (CLRB Stock Report) has been given an Outperform rating from Oppenheimer along with a $5 price target. This suggests a CLRB stock forecast of over 120% compared to current levels. Whether or not the penny stock will reach that level is yet to be seen. However, the past few weeks have shown a clearly bullish stance from traders. Since the start of the month, CLRB stock has climbed from around $1.26 to highs of $2.47. Furthermore, the penny stock began the week trading around $2.30.
This was another one of the biotech penny stocks we discussed over the weekend. The reason being was that the company has an upcoming presentation at the International Symposium on Pediatric Neuro-Oncology annual meeting. What’s more, is that Cellectar could have fourth-quarter milestones to be aware of as well. So if CLRB stock is on your list, you might want to keep the following in mind.
The company held an FDA Type B guidance meeting to define a registrational pathway for its adult hematology-oncology indications. It plans the initiation of a pivotal study for its lead indication this quarter. “Our recent FDA guidance meeting was most encouraging and we look forward to providing greater details in the near-term,” said James Caruso, president, and CEO of Cellectar, in its Q3 business update. Considering the recent uptick in trading activity, will CLRB stock be on your watch list before the new year?
Penny Stocks To Buy [according to Goldman Sachs]: Southwestern Energy Company
Southwestern Energy Company (SWN Stock Report) is one of the increasingly popular energy penny stocks to watch recently. It’s also one we discussed among small-cap stocks up big last week. A lot of the more recent attention aside from Southwestern’s involvement in the energy industry has stemmed from its acquisition of Montage Resources Corp. last month.
This acquisition hopefully adds a great deal of output capacity to Southwestern Energy Corp. For Q4 2020, the company explained that it should in total be able to produce around 251 billion cubic feet equivalent (Bcfe). This number is in comparison to around 225 Bcfe without the acquisition of Montage.
While a lot of its potential likely rests on what the broader industry does, it’s worth noting that analysts have been shifting a bit recently. For starters, Goldman Sachs has a Buy rating on the stock. Though it doesn’t currently have a price target, we can look to Morgan Stanley’s recent $3.25 price target increase in November. The firm boosted its target from $3 to $3.25.
Something to keep in mind especially heading into colder months is the price of natural gas. Additionally, some experts point to a potentially bright outlook for the industry as President Elect Joe Biden could actually help growth. Since renewable deployment on a massive scale takes time, some see natural gas as “the bridge fuel”. So, in this light, we could see attention shift not only toward energy but toward natural gas stocks as well.