Risk and reward often go hand in hand, making the stock market profitable and dangerous. Some of the best examples of this axiom are the penny stocks, the stocks cost $ 5 or less. With the low price comes the potential for extreme profits, because even an increasing small price increase will be a high percentage of profit.
JPMorgan’s Head of Stock Strategy for Small and Medium Capital, Eduardo Lecubarri, sees both the opportunities and dangers in the current market environment – and the great potential of small-cap stocks that have room to maneuver.
‘1Q may be rocky following the strong gains since Nov and the fact that valuations are booming at all times. However, the year-long outlook is encouraging due to much stronger fundamental tailwinds. Such a positive backdrop will likely leave investors upside down the few stocks that are still making major gains, as it has apparently started doing YTD. It is for this reason that we will encourage investors to build their portfolios now and see things through in the event of a consolidation phase coming in the first quarter, ‘Lecubarri wrote.
Taking the risk into account, we used TipRanks’ database to find compelling penny stocks with cheap price tags. The platform led us in the direction of two tickers with ‘Strong Buy’ consensus ratings from the analyst community. Not to mention the significant upside potential is on the table. According to the analysts, there are at least 300% returns over the next 12 months, according to the analysts.
AcelRx Pharmaceutical Products (ACRX)
Opioids have been making headlines over the past few years and for all the wrong reasons. This powerful painkiller is also dangerously addictive – a factor that has led to the opioid epidemic in the US. AcelRx is a pharmaceutical company dedicated to the creation of safer treatments for acute pain, developing synthetic opioid drugs for sublingual (under the tongue) dosage.
The main product of the company, Sufentanil, was approved by the FDA under the name Dsuvia in 2018 and the same year by the EU as Dzuveo. A second sublingual Sufentanil system, under the name Zalviso, has also been approved for use by the EU and is currently in Phase 3 trial in the US.
In its most recent earnings report, the company showed $ 1.4 million at the top, driven by $ 1.3 million in product sales. The sales figure increased successively by 433%, and total revenue was 133% higher than a year-on-year.
Against this background, several members of the street believe that ACRX’s share price of $ 1.40 looks like a steal.
Office analyst Brandon Folkes is excited about Dsuvia’s prospects as an alternative to current opioid treatments, and he believes the potential will increase the company’s inventory.
“With the launch of Dsuvia, we believe that investor focus can now shift to launch statistics and the highest sales potential for the product. As ACRX launches a true alternative to IV opioids, we expect investors to begin appreciating the value of the product. We believe Dsuvia is making progress in delivering adequate pain management by eliminating the need for an invasive and time-consuming IV setup in the emergency, as well as an outpatient, or post-surgery. “Despite the start of the hospital taking time, we expect Dsuvia’s uptake will increase revenue above the current estimate of the street, which in turn could increase inventory higher than it is now,” Follked said. .
Consistent with its positive stance, Folkes ACRX is rating a buy, and its $ 9 price target implies room for an incredible upward potential of 552% over the next 12 months. (To see the record of Folkes, click here)
As for the rest of the street, 3 Buys and no Holds of Sells have been published over the past three months. Therefore, ACRX has a strong buy consensus rating. Based on the average price target of $ 7, shares could rise by 407% in the next year. (See ACRX stock analysis on TipRanks)
NuCana (NCNA)
NuCana is a biopharmaceutical company focusing on new cancer treatments. The company’s goal is to provide effective treatments for bile, breast, colorectal, ovarian and pancreatic cancers – while avoiding the complications and side effects of current chemotherapy treatments. NuCana uses a chemical technology called phosphoramidate, called ProTide, to create a class of drugs that will surpass the limitations of the existing nucleotide analogues behind many chemotherapy drugs. NuCana’s ProTides have already been used in Gilead’s antiviral drug Sovaldi.
In May last year, NuCana announced that its Phase III trial on Acelarin, the drug candidate furthest along the company’s pipeline, would be resumed as a treatment for bile duct cancer. The study covers more than 800 patients in 6 countries and is currently ongoing. In November, the company published data described as ‘encouraging’ from the Phase Ib study of the same drug.
While Acelarin is the leading drug in prospect, NuCana has two other prospects that are currently being developed. NUC-3373 is in phase I testing as a treatment for solid tumors and colorectal cancers, and NUC-7738 is a second route being investigated for applications to advanced solid tumors. Of these three, the colorectal study is the most advanced.
5-star analyst Robyn Karnauskas, written by Truist, considers the pipeline to be the key to NuCana’s investor potential.
“We believe that investors have overlooked the fact that NCNA is a platform company that we believe has been validated, as defined by the production of clinical products. We like that it brought 3 products to the clinic, including one new remedy and two improved chemo in the cornerstone. The data indicates that the platform works and can deliver better chemo […] Although investors are mostly focused on Acelarin, we believe that investors should also focus on NUC-3373, another core of our platform-based dissertation with data expected in 1H2021, “Karnauskas noted.
To this end, Karnauskas sets a price target of $ 22 on NCNA, indicating that the stock has room for 384% growth, coupled with a buy rating. (To see the record of Carnauskas, click here)
Overall, NCNA’s consensus rating on strong buy is unanimous and is based on 4 recent reviews. Shares have an average price target of $ 17.33, indicating an upward 270% one-year higher than the current trading price of $ 4.69. (See NCNA stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the analysts. The content is for informational purposes only. It is very important to do your own analysis before investing.