The conventional wisdom is that we are on the threshold of another major rally on the stock market. 2020 was a volatile year, with an unprecedented “coronavirus recession” in February and March, followed by a bullfight in summer and autumn, with increased volatility in late autumn as investors tried to make sense of the election and the -the second wave of the virus.
But that was all in the past. Elections are set, Congress will be divided so narrowly that major legislative initiatives are unlikely and the long-awaited COVID vaccines are starting to come into circulation. In short, we have a combination of risk and reward configuration, for investors eager to put something at stake.
And for those who are really ready to take the extra risk, money stocks may be the right choice for a major rally. These shares are priced low, below $ 5 per share, and low prices usually happen for a good reason. But some penny stocks are fundamentally healthy and, with their low price already ripe, they have nowhere to go.
Using the TipRanks database, we got details of two compelling stocks that fit this low stock price profile and huge growth potential, 200% or more, according to Wall Street analysts. Not to mention, both boast a “strong buy” rating.
Palatin Technologies (PTN)
We will start with Palatin Technologies, a biopharmaceutical company with a unique niche and a competitive advantage. Palatin specializes in the development of melanocortin and natriuretic peptide receptor systems. These are a new class of potential drugs, specific to receptors and highly targeted to specific diseases. Palatine is developing drugs for dry eye disease, obesity and congestive heart failure. The Palatine line also has more immediate applications – PL8177, originally developed to target ulcerative colitis, has recently entered phase 1 studies as a treatment for COVID-19.
For the competitive advantage, Palatin has Vyleesi. Vyleesi is a trademark of bremelanotide, the first peptide melanocortin treatment for premenopausal women with generalized hypoactive sexual desire disorder. The FDA considers Vyleesi a “first-class” drug and approved it for use in June 2019. Palatin has been marketing Vyleesi in North America ever since. In July this year, Palatin settled a legal dispute with AMAG Pharmaceutical, in which Palatin regained all North American legal rights over Vyleesi, along with a $ 16.3 million settlement, of which $ 12 million have already been paid.
Currently, at $ 0.42 a piece, Canaccord analyst John Newman believes the stock price has an attractive entry point.
“Vyleesi continues to make business progress, ensuring wider insurance reimbursement coverage and strengthening relationships with healthcare providers […] Palatine continues to look for potential US licensors for Vyleesi to increase sales. The possible re-licensing / partnership can revolve around a company currently on the market for women’s medical products. We believe that a new re-licensing agreement could bring a significant advance payment, given that Vyleesi has the full approval of the FDA, “said the 5-star analyst.
In addition, Palatin last week announced phase 2 data from its exploratory study PL9643 on dry eye disease (DED). Newman points out that the results showed a statistically significant improvement in multiple signs and symptoms in the moderate to severe patient population. Palatin intends to initiate phase 2/3 studies in mid-2021.
Consistent with its optimistic position, Newman evaluates PTN a Buy, and the target price of 3 USD implies room for a potential increase of 615% in the next 12 months. (To follow Newman’s record, click here)
Overall, the Palatine gets a strong buy rating from the analyst consensus and the verdict is unanimous, based on 3 recent buy reviews. The average target price, USD 2.17, implies an impressive increase of 417% for the following year. (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 cancer, solid tumors and genetic diseases, using medical breakthroughs in cellular and genetic therapies to create specific drugs. The company is actively developing CAR-T therapies (chimeric antigen receptor T cells) as treatments for non-Hodgkin’s leukemia and other cancers.
Mustang has a robust research pipeline, with genetic therapies, hematologic CAR-Ts and solid tumor CAR-Ts developing to treat a wide range of diseases. Preclinical research is ongoing and Phase 1 and Phase 2 studies are planned by 2023. The company has six ongoing clinical trials for glioblastomas to multiple myeloma and prostate cancer. The company’s clinical drug, MB-106, looks promising as a treatment for non-Hodgkin’s leukemia.
In his detailed analysis of the company for B. Riley Securities, analyst Justin Zelin notes the early success of the MB-106 and its potential for the company in the future.
“We consider the robust efficacy of MB-106 of 89% overall response rate (ORR) and 44% complete response rate (CRR) and an extremely favorable safety profile in n = 9 NHL patients treated with the cell manufacturing process modified by the Mustang as a risky event for the program and the Mustang platform in general. Following this positive data set, the Mustang will submit an Investigational New Drug (IND) application in 1Q21E to allow the initiation of a multicenter phase II multi-arm MB-106 study, providing a risk recording pathway for approval. in patients with CD20 + NHL “, wrote Zelin.
In conclusion, Zelin is optimistic about the Mustang, writing: “We continue to believe that the Mustang Bio is undervalued compared to peers due to the historical lack of catalysts and clinical data, which is now changing with positive clinical data presentations.”
Zelin’s comments support his buy rating and his $ 13 price target indicates the possibility of an increase of up to 300% next year. (To follow Zelin’s record, click here)
Mustang is another penny stock with a strong unanimous purchase rating, based on 4 recent purchase reviews. The company’s shares are selling for $ 3.16 and have an average target price of $ 10.75, which suggests a 235% increase over the one-year period. (See MBIO Stock Analysis on TipRanks)
To find good ideas for trading penny stocks at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that brings together all the information about TipRanks stocks.
Disclaimer: The opinions expressed in this article are only those of the analysts presented. The content is intended for informational purposes only. It is very important to do your own analysis before making any investment.