Whether you’re a big fan of penny stocks or you’re trying to avoid them at all costs, there’s no denying the potential they have. There are very few things you can invest your money in and see quick & large returns. Thanks to the pandemic in 2020, the retail investor base has increased in size. We’re not just seeing a few new ‘mom and pop investors,’ we’re seeing millions of new traders looking to make money in the stock market.
But if you’re new to this world of cheap shares, you may have a few questions like what are penny stocks & how can I make money with them? Keeping it simple, these stocks represent shares of companies trading for less than $5; that’s it. Over the last year, the millions of new retail traders saw, first-hand, how big some of these “cheap stocks” can break out.
On the one hand, you’ve got companies like GameStop (NYSE: GME), which traded below $3 a year ago and ended up reaching highs of more than $480 this year. Then you’ve got other companies like Zomedica (NYSE: ZOM), which cost less than a dime per share late last year and rallied just a few dollars to highs of $2.91 this year. Does a $2.85 move actually matter?
When you’re talking about penny stocks under $0.10, it sure does. It matters about 47 times the initial investment. ZOM stock moved 4,750% within just a few months. Even with the higher risk that penny stocks have, finding the best ones to follow can pay off.What Kind Of Penny Stocks Should You Watch?
If you’re putting together a list of penny stocks to watch, you might want to take a closer look at certain sectors and market trends. One thing I’m sure you’ll find is that even if the broader S&P & Nasdaq are getting pummeled, there are usually at least a few biotech stocks climbing. That’s typical of the industry.
These companies are usually speculative in nature, especially when you’re talking about smaller companies. Since the entire business model hinges on advancing treatment into commercialization, everything leading up to that point, including earnings, comes second to things like trial data.
In fact, if you look at some of the top biotech penny stocks recently, while markets have sold off, many have weathered the storm well, thanks to key updates on trials. In fact, one example of this from Friday is CASI Pharmaceuticals (NASDAQ: CASI). While markets were selling off during the morning session, CASI shares were climbing. Speculation on the formal closing of its latest public offering was the source of the move. What’s more, analysts have supported a bullish stance on the company as well. In this case, the most recent rating comes from Oppenheimer, which also placed a $5 target on the company.
I’m going to stick with this theme today and discuss a few more biotech penny stocks to watch that analysts have covered recently. A few could also have some fundamental catalysts to be on the lookout for. Will they be on your list this week?Biotech Penny Stocks To Watch
- GT Biopharma Inc. (NASDAQ: GTBP)
- AzurRx BioPharma Inc. (NASDAQ: AZRX)
- CTI BioPharma Corp. (NASDAQ: CTIC)
- Opko Health Inc. (NASDAQ: OPK)
Analysts at Roth Capital recently weighed in on GT Biopharma in March. The firm gave a Buy rating and $25 price target on the penny stock. A few core developments related to the company’s immunotherapy pipeline could be important to note in light of this latest sentiment from Roth.
In particular, GT Biopharma has been developing a treatment platform, TriKE, indicated in numerous types of cancers. The company’s lead asset, GTB-3550, is being investigated to treat high-risk myelodysplastic syndromes, refractory/relapsed AML or advanced systemic mastocytosis. Interim data has already shown promise. To date, 9 patients have been enrolled in the Phase I/II Expansion clinical trial. Early results have already shown a reduction in bone marrow blast levels and not showing any sign of toxicity.
This month, GT announced preclinical results for another treatment candidate, its ROR1 TriKE™, as a prospective therapy for prostate cancer. GT explained that targeting ROR1 on cancer cells with TriKE™ and redirecting NK cells to attack and kill cancer cells expressing ROR1 could result in a treatment that limits the metastatic potential and invasiveness of certain solid tumors. Based on these results, the company said that it plans to evaluate this ROR1 TriKE in additional IND-enabling preclinical studies to transition to a Phase I/II clinical trial.
All things considered, there’ve been a number of things that the market and analysts like Roth are taking into account when it comes to GT Biopharma in 2021.AzurRx BioPharma Inc. (NASDAQ: AZRX)
Another one of the biotech penny stocks to watch this week is AzurRX. Aside from analyst sentiment, which I’ll discuss, this week could be pivotal for its treatment pipeline. In particular, AzurRx completed enrollment for its Phase 2b OPTION 2 clinical trial for the company’s MS1819 treatment. Targeting cystic fibrosis (CF) patients with exocrine pancreatic insufficiency, the trial enrolled 30 CF patients.
Why is this week one to keep AZRX stock on the watch list? The company said earlier in March that top-line data from the study is expected by the end of Q1 2021. Considering there are just 3 days left in the quarter, the clock is ticking.
Furthermore, AzurRx recently announced the completion of enrollment in its Phase 2 trial evaluating MS1819 in combination with the current standard of care, porcine-derived pancreatic enzyme replacement therapy. Topline data from this combination treatment is expected by the end of next quarter. So there are several near-term potential catalysts to be aware of.
As far as analysts are concerned, the most recent rating comes from H.C. Wainwright. The firm has a Buy rating on the penny stock. Furthermore, earlier this quarter, it boosted its price target from $2 to $3.50.CTI BioPharma Corp. (NASDAQ: CTIC)
Since making its explosive move last quarter, CTI BioPharma has remained in a steady channel between $2.60 and $3.60 for the most part. There’ve been a few instances where CTIC stock has broken above the upper threshold. But for all intents and purposes, this has been the range over the last few months. Most recently, CTIC has felt a bit of selling pressure.
Ever since announcing that the American Association for Cancer Research’s journal, Clinical Cancer Research published results from a Phase 1 study evaluating CTI’s pacritinib, the stock has slid. This was studying the prevention of acute graft-versus-host disease using the treatment. According to the company, the results showed that pacritinib, combined with sirolimus and low-dose tacrolimus, has a “promising safety profile and exhibits preliminary therapeutic activity in preventing acute GVHD after allogeneic hematopoietic cell transplantation.”
The Phase 2 portion of the trial evaluating the therapeutic effect of pacritinib in combination with sirolimus and low-dose tacrolimus for GVHD prevention is ongoing at Moffitt Cancer Center and the Masonic Cancer Center at the University of Minnesota.
Why is this week an important one for CTI? As revealed in its March 17th update, the company expects completion of a rolling New Drug Authorization submission for pacritinib in myelofibrosis patients with severe thrombocytopenia by the “end of Q1,” so again, this is a situation where the clock starts ticking. But as far as analysts are concerned, Lake Street Capital is the most recent to weigh in. The firm has a Buy on the stock and boosted its price target this year. Lake Street had given an $8 target but increased it 62.5% to $13 earlier this year.Opko Health Inc. (NASDAQ: OPK)
Finally, Opko could be another one of the biotech penny stocks for the watch list. While it focuses on expanding its reach through numerous operating companies, it’s also developing its own treatment pipeline.
In this case, based on the company’s January investor deck, Opko expected to have topline data on a Rayaldee trial by the end of this quarter. In particular, there’s a Phase 2 open-label trial to evaluate the safety, efficacy, pharmacokinetics, and pharmacodynamics of higher strength Rayaldee in those with Vitamin D insufficiency and chronic kidney disease requiring regular hemodialysis.
Aside from that, OPK stock has also been a high point in the analyst community. Most recently, Barrington Research boosted its price target from $7 to $8. The firm also carries an Outperform on the stock.Biotech Penny Stocks & Volatility
While analyst activity is a nice thing to weigh out in your research, it’s not the only thing to consider. In light of upcoming data for some of these companies, it can create a risky situation. If results don’t come back favorable, the market could react in a less than favorable way. On the other hand, if the company comes out with data that exceeds expectations, we’re potentially talking about an entirely different market reaction. In any case, as they say, “the more you know,” and heading into this week, you’ve got the scoop on what some companies could be expecting & the forecasts that analysts have made.