Risk and reward often travel hand in hand, making the stock market both lucrative and dangerous. Among the best representatives of this axiom are pennies, these shares at a price of $ 5 or less. With this low price comes the potential for extreme profits, as even a gradual small price increase will lead to a high profit margin.
JPMorgan’s director of small and medium-sized equity strategy, Eduardo Lecubari, sees both the opportunities and the dangers in the current market environment – and the great potential of small-cap stocks that have a place to operate.
“1Q could be rocky after the strong gains since November and the fact that ratings are at the top of all time. However, the long-term outlook is encouraging due to the far more powerful fundamental tailwinds. Such a positive background is likely to prompt investors to pursue these few stocks, which are still offering a big upward recovery as they seem to have started making since the beginning of the year. For this reason, we would encourage investors to build their portfolios now and look at things in case of any phase of consolidation that may come in the first quarter, “wrote Lecubari.
Considering the risk, we used the TipRanks database to find compelling pennies with valuable labels. The platform pointed us to two “Strong Purchase”
AcelRx Pharmaceuticals (ACRX)
In recent years, opioids have made headlines for the wrong reasons. These powerful pain medications also cause dangerous addiction, a factor that led to the opioid epidemic in the United States. AcelRx is a pharmaceutical company dedicated to creating safer treatments for acute pain, developing synthetic opioid drugs for sublingual (sublingual) dosing.
The company’s main product, Sufentanil, was approved by the FDA under the name Dsuvia in 2018 and by the EU as Dzuveo in the same year. A second Sufentanil sublingual system, called Zalviso, is also approved for use by the EU and is in phase 3 in the United States.
In its latest earnings report, the company showed $ 1.4 million on top, driven by $ 1.3 million in product sales. Sales figures have grown steadily by 433% and total revenue has grown by 133% on an annual basis.
Against this background, several Street members believe that the $ 1.40 share price of ACRX looks like a theft.
Cantor analyst Brandon Folks is optimistic about Dsuvia’s prospects as an alternative to current opioid treatment and believes the potential will increase the company’s stock.
“With the launch of Dsuvia, we believe that the focus of investors can now shift to launch indicators and peak product sales potential. As ACRX launches a real alternative to IV opioids, we expect investors to start evaluating the value of the product. We believe that Dsuvia offers progress in delivering adequate pain treatment by eliminating the need for invasive and time-consuming intravenous adjustment in the emergency department, as well as outpatient or postoperative treatment. “Despite the start-up of hospital launches, we expect Dsuvia’s entry to increase revenue above current Street estimates, which in turn could lead to an increase in stocks from current levels,” Falked said.
In line with his bullish stance, Folks is valuing ACRX a Buy, and his $ 9 target suggests room for stunning potential to increase 552% over the next 12 months. (To watch the Folkes recording, Press here)
If we turn to the rest of the street, 3 purchases and no arrests or sales have been published in the last three months. Therefore, ACRX has a strong consensus rating. Based on the average price target of $ 7, stocks could jump 407% next year. (See ACRX stock analysis for TipRanks)
NuCana is a biopharmaceutical company focused on new cancer treatments. The company’s goal is to provide effective treatment for bile, breast, colon, ovarian and pancreatic cancers – while avoiding the complications and side effects of current chemotherapy. NuCana uses a phosphoramidate chemical technology called ProTide to create a class of drugs that will overcome the limitations of existing nucleotide analogues behind many chemotherapeutic drugs. NuCana’s ProTides have already been used in Gilead Sovaldi’s antiviral drug.
Last May, NuCana announced the relaunch of its Phase III study on Acelarin, the most distant drug candidate, as a treatment for bile duct cancer. The study covered more than 800 patients in 6 countries and is currently ongoing. In November, the company published data described as “encouraging” from a Phase Ib study of the same drug.
While Acelarin is the leading drug product, NuCana has two other perspectives under development. NUC-3373 is in a phase I trial as a treatment for solid tumors and colorectal cancer, and NUC-7738 is the second time of investigation for applications for advanced solid tumors. Of these three, colorectal examination is the most advanced.
Writing from Truist, 5-star analyst Robin Karnauskas sees the pipeline as a key to NuCana’s investment potential.
“We believe that investors have ignored the fact that NCNA is a platform company that we believe is validated as defined by the production of clinical products. We like that he brought 3 products to the clinic, including one new drug and two improved chemicals. Our data suggests that the platform works and can produce better chemicals […] While investors are mostly focused on acelarin, we believe that investors should also focus on NUC-3373, another core of our platform-based thesis, which has data expected in 1H2021, ”said Karnauskas.
To that end, Karnauskas set a price price of $ 22 for NCNA, assuming the stock has room for growth of 384%, along with a buy rating. (To watch the recording of Karnauskas, Press here)
Overall, NCNA’s strong buy rating is unanimous and is based on 4 recent reviews. The shares have an average price price of 17.33 dollars, which implies a 270% increase over one year compared to the current trading price of 4.69 dollars. (See NCNA stock analysis for TipRanks)
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Rebuttal: The views expressed in this article are those of the analysts provided. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.