These 2 Penny Stocks Are Poised for a Massive Rally, Say Analysts
The usual wisdom is that we are about to have another big stock market rally. 2020 was a volatile year with the unprecedented “coronavirus recession” in February and March, followed by a bull run through summer and fall with increased volatility in late autumn as investors tried to understand the elections and second wave of the virus.
But that's all in the past. Elections are over, Congress is so tightly divided that major legislative initiatives are unlikely and the long-awaited COVID vaccines will be circulated. In short, we have a combination of risk and reward setup for investors willing to put some skin into the game.
And for those genuinely willing to take the extra risk, penny stocks can be the right choice for a big rally. These stocks are priced as low as less than $ 5 per share, and low prices usually happen for good reason. But some penny stocks are solid from the ground up, and with their low price already branded in, all they can do is go up.
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Using the TipRanks database, we identified two compelling stocks that, according to Wall Street analysts, fit this low-stock-high-upside profile of 200% or more. Not to mention, they both have a consensus rating of “Strong Buy”.
Palatin Technologies (PTN)
We start with Palatin Technologies, a biopharmaceutical company with a unique niche and competitive advantage. Palatin specializes in the development of melanocortin and natriuretic peptide receptor systems. This is a new class of potential drugs that are receptor specific and highly targeted to specific diseases. Palatin is developing drugs for dry eye diseases, obesity and heart failure. Palatin's pipeline also has more immediate applications - PL8177, originally developed for the treatment of ulcerative colitis, recently entered Phase 1 trials for the treatment of COVID-19.
For the competitive advantage, Palatin has Vyleesi. Vyleesi is the marketing brand name of bromelanotide, the first melanocortin peptide treatment for pre-menopausal women with generalized hypoactive sexual pleasure disorder. The FDA regards Vyleesi as a first-class drug and approved it for use in June 2019. Palatin has been marketing Vyleesi in North America ever since. In July of this year, Palatin settled a lawsuit with AMAG Pharmaceutical in which Palatin regained all North American legal rights to Vyleesi, along with a $ 16.3 million settlement, of which $ 12 million was already paid.
Canaccord analyst John Newman is currently forecasting $ 0.42 apiece and believes the stock price is an attractive entry point.
"Vyleesi continues to make commercial strides, securing broader insurance reimbursement coverage and strengthening relationships with healthcare providers. [...] Palatin continues to seek a possible US re-licensing for Vyleesi to improve commercialization. A possible re-licensing / Partnership Could Be A We believe that a new re-licensing agreement could mean a significant upfront payment as Vyleesi has full FDA approval, "said the 5-star analyst.
In addition, last week Palatin announced Phase 2 data from its PL9643 dry eye (DED) exploration study. Newman points out that the results "showed a statistically significant improvement in multiple signs and symptoms in the moderate to severe patient population." Palatin plans to initiate phase 2/3 trials in mid-2021.
In keeping with his bullish stance, Newman is buying PTN and its target price of $ 3 implies room for upside of 615% over the next 12 months. (To see Newman's track record, click here.)
Overall, Palatin receives a strong buy rating from analysts' consensus, and this judgment is unanimous based on 3 recent buy ratings. The average target price of $ 2.17 implies an impressive uptrend of 417% for the year ahead. (See PTN stock analysis on TipRanks)
Mustang Bio (MBIO)
Mustang Bio is another biopharmaceutical company in the clinical phase. Mustang's focus is on potential cures for blood cancers, solid tumors, and genetic diseases, using medical breakthroughs in cell and gene therapy to develop targeted drugs. The company is actively developing Chimeric Antigen Receptor T-Cell (CAR-T) therapies for the treatment of non-Hodgkin leukemia and other cancers.
Mustang has a robust research pipeline of gene therapies, hematological CAR-Ts, and solid tumor CAR-Ts in development for the treatment of a wide variety of diseases. The preclinical research is ongoing and the Phase 1 and 2 studies are planned by 2023. The company is currently conducting six clinical trials ranging from glioblastoma to multiple myeloma to prostate cancer. The company's clinical-stage drug MB-106 shows promise for the treatment of non-Hodgkin leukemia.
In his in-depth review of the company for B. Riley Securities, analyst Justin Zelin notes MB-106's early success and its future potential for the company.
"We consider the robust efficacy of MB-106 of 89% total response rate (ORR) and 44% complete response rate (CRR) and an extremely favorable safety profile in n = 9 NHL patients treated with Mustang's modified cell production process to be significantly positive - Risk event for the program and the Mustang platform as a whole. Following this positive record, Mustang will file an Investigational New Drug (IND) application in Q1 21E to enable the initiation of a multi-arm, multicenter Phase II study of MB-106, which offers a low-risk registration pathway for approval in CD20 + NHL patients, ”Zelin wrote.
The bottom line is that Zelin is optimistic about Mustang and writes: "We continue to believe that Mustang Bio is undervalued compared to other companies due to the lack of catalysts and clinical data in the past, which is now changing with positive clinical data presentations."
Zelin's comments support his buy recommendation and his target price of $ 13 suggests growth of up to 300% over the next year. (To see Zelin's track record, click here.)
Mustang is yet another penny stock with a unanimous strong buy rating based on 4 recent buy ratings. The company's shares sell for $ 3.16 and have an average price target of $ 10.75, indicating an uptrend of 235% in a year. (See MBIO stock analysis on TipRanks)
To find great ideas for trading penny stocks at attractive valuations, visit TipRanks' Best Stocks to Buy, a newly launched tool that brings together all of the insights into TipRanks stocks.
Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.
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