2. “Strong buying” of penny stocks that can generate 100% (or more) returns
In a recent review of current market conditions, JPMorgan strategist Eduardo LeCubarri summarizes his view that 2021 will see moderate gains in stocks overall, but outperforms the small / midcap sector. Lekubarri believes that investors can find opportunities for large gains in this class of shares. Based on the overall rally in stocks, LeCubarri points to recent manufacturing PMI data, which is at its highest in 15 years, and declining unemployment rates, both of which point to a solid foundation for economic recovery. With consumer confidence growing and relatively high savings, he sees a tailwind for small / mid-cap companies throughout the year. The general upward trend in small-cap stocks should naturally induce analysts and investors to pay attention to “pennies” – stocks that are priced below $ 5 per share. While not a reliable indicator, a low share price is usually combined with a low market capitalization, but it also has solid upside potential, which LeCoubarri mentions. However, before investing in small stocks right away, Wall Street professionals advise you to look at the big picture and consider factors other than price. For some of the names that fall into this category, you do get what you pay for, offering little long-term growth prospects due to weak fundamentals, recent headwinds, or even a large number of outstanding stocks. Taking into account the risk, we used the TipRanks database to find two attractive stocks according to Wall Street professionals. Each has received a Strong Buy consensus rating from the analyst community and offers tremendous growth prospects. Here we are talking about more than 100% growth potential. Biolase Technology (BIOL) We start with Biolase Technology, a leading developer, manufacturer and innovator in dental laser technology. Lasers bring many benefits to dentists and their patients, including fewer aerosols and a softer touch during procedures, as well as more comfortable healing after them. Biolase products are used in periodontal, endodontic, hygiene and implantation procedures; the company sells online directly to dental clinics. Biolase had a positive impact on its recent 4Q20 earnings report. While revenue of $ 8.52 million was down 16% year-over-year, the consecutive quarterly growth was impressive at 31%. The company benefited as dental clinics reopened during the economic recovery in 2H20. Biolase reported two positive sales trends in the fourth quarter: 78% of sales came from new customers and 40% from dental professionals. Moreover, the company provided a forecast for first quarter revenue of USD 7.5-8.0 million, which is 60-70% more than a year earlier and exceeded the forecast of USD 7.0 million. According to some analysts, Biolase shares, which are now trading at $ 0.76 a share, could rise significantly. Among the bulls is Maxim analyst Anthony Vendetti, who noted that the company’s positive results in the fourth quarter are not just speculation. “While the international market continues to lag behind the US in COVID recovery, BIOL posted significant consistent revenue growth for the second quarter in a row thanks to US sales to new customers, dentists and dental service organizations (DSOs). We are encouraged that Dental Professionals accounted for 40% of the company’s US sales in 4Q20 and expect the recent launch of both Endo and Perio Academies to foster wider adoption of ~ 5K endodontists and ~ 5K periodontists in the US. increased emphasis on converting smaller DSOs (which can implement BIOL technology faster), which we expect will increase short-term revenue as the company makes progress in converting larger DSOs such as Heartland Dental (privately owned), the 5-star analyst said. Vendetti summed up: “Based on the unique value proposition of BIOL products, its continued progress in penetrating DSOs and growing interactions with dentists, we reiterate our Buy recommendation.” Along with this Buy rating, the analyst sets a price target of $ 2, which indicates a 165% rise in the stock in 2021. (To view Vendetti’s track record, click here). It looks like the rest of the street also sees a lot of growth potential. in total – 4, in fact – the analyst community rates BIOL as a strong buy. The average target price reaches $ 1.94 and suggests ~ 157% upside in the coming months (see BIOL stock analysis at TipRanks) Fortress Biotech (FBIO) Fortress Bio is a pharmaceutical research firm with a broad portfolio of 28 drug candidates in various stages of development from preclinical trials to phase 3 trials. In addition, Fortress has six approved products on the market for the treatment of various dermatological conditions, including acne, skin fungal infections, burns and other superficial wounds. These drugs are marketed by Journey Medical, a partner company of Fortress, and had net sales of $ 44.5 million in 2020. For comparison: 28% growth – $ 34.9 million. n net in 2019. Fortress ended 2020 with a solid cash position with cash and cash equivalents of $ 235 million. This is $ 15 million more than in the third quarter and a 53% increase over the same period last year. The company noted that these positive results were achieved despite the COVID pandemic affecting both supply and sales. Looking ahead, Fortress plans to add two new approved prescription products to its lineup in 2021. In another program update, Fortress is partnering with Cyprium Therapeutics and Sentynl Therapeutics on CUTX-101. The two companies signed an agreement to develop and acquire assets for a candidate drug for Menkes’s disease, which is currently in Phase 3 clinical trials. The company reported positive clinical efficacy results in August last year, including a median survival rate of 14.8 years in the early treatment cohort, compared with 1.3 years in the untreated historical control group. In 2H21, Fortress will start sending out NDAs for CUTX-101. Discussing this action for B. Riley, five-star analyst Mayank Mamtani notes the fundamental strength of the company. “FBIO’s differentiated business model, comprised of a diversified portfolio of marketed products and clinical candidates, remains resilient to the challenges posed by the C-19 pandemic, thereby creating an enabling environment pending the many regulatory, clinical data and inflection points that are expected in the future. … the next few quarters will serve as an opportunity for a revaluation of shares, ”Mamtani wrote. To that end, Mamtani rates FBIO Buy and its $ 10 price target suggests it has ~ 100% growth potential over the next 12 months. (To view Mamtani’s track record, click here) Overall, Fortress Bio has 4 registered reviews, all of which are for purchase, giving the stock a Strong Buy consensus rating. FBIO shares are priced at $ 4.48 and their average target price of $ 13 suggests 190% annual upside potential. (See TipRanks’ FBIO Stock Analysis). To find good ideas for trading cheap stocks at an attractive price, visit TipRanks ‘Best Stocks to Buy, a recently launched tool that brings together all of TipRanks’ capital analytics. Disclaimer: The opinions expressed in this article are those of the analysts mentioned. The content is for informational purposes only. Before making any investment, it is very important to do your own analysis.