These 2-cent stocks offer the potential for hundreds of percent growth, according to analysts.
Let's venture into unknown waters together again today. Analysts don't move among penny stocks that often, but when they do, they usually find companies with high growth potential, and today is no different.
In the past, the term "penny stocks" referred to any stock that traded for less than $1. But later, the U.S. Securities and Exchange Commission modified the definition of penny stocks to include all stocks that trade below $5. Thus, the term penny stock can be misleading.
So what are penny stocks? By definition, they are shares of small companies that trade below $5. The big advantage with these stocks is that an investor can make a very decent appreciation just from a small movement in the share price. But on the other hand, he can also make a big loss this way.
So if you are patient, and can stand even a percentage larger unrealized loss, then come with me to look at the following 2 cent stocks that can offer growth potential in the hundreds of percent range. Before we begin, it's worth mentioning that while the stock is already trading for a little more than $5, it still qualifies for inclusion here because it is a small company.
Tenaya Therapeutics $TNYA
Tenaya Therapeutics is a biotech company that focuses on treating heart disease through gene therapy, cell regeneration, and precision medicine. This company is developing several potentially revolutionary drugs.
One of the candidates is TN-201 gene therapy, which is currently the company's lead candidate. It is a drug therapy that is designed to treat adults and children with a mutation in the MYBPC3 gene, which is the most common cause of heart disease. It is estimated to be in more than 115,000 patients in the United States.
The company earlier this year received approval from the FDA to begin Phase 1b clinical trials, which are expected to begin in the third quarter of this year. This study would be conducted on adult patients, and the first results should be known in early 2024.
The Company is also working on another gene therapy, TN-301, a small molecule inhibitor of HDAC6, which is being developed for the potential treatment of heart failure with preserved ejection fraction. The company estimates that more than 3 million people in the US suffer from this disease.
This gene therapy is currently in Phase I trials. The company expects that the first results from this phase of testing could be available as early as the second half of 2023. One of the other gene therapies the company is developing is TN-401,which is a therapy being developed to administer the PKP2 gene to patients who are deficient in this gene. Here it is expected to submit an application to the FDA in the second half of 2023.
Since this is a company that is only in the clinical stage (hence has no product), it is not generating any revenues or profits. The company is working with the money it has managed to raise through various activities, such as stock market subscriptions. The company currently has a total of $194 million in current assets, which management expects to last until the first half of 2025.
If you are interested in this company and would like to read more about it, be sure to visit their website.
This company has greatly intrigued analyst Piper Sandler, who sees several catalysts for future growth.
We remain optimistic about this name as we believe the HCM market is growing with the recent launch of Camzyos (BMY) as well as several other key HCM catalysts coming in 2023. Accordingly, we view TNYA as undervalued with several inflection points with TN-301 (HCA6 inhibitor) for HFpEF Ph1 SAD/MAD HV readout data in H2 2023, lead assets TN-201 (MYBPC3 gene therapy), Ph1b nHCM data on track in 2024 and TN-401 (PKP2 gene therapy) for ARVC with IND submission expected in H2 2023. Overall, the company's catalyst-rich research represents an attractive buying opportunity from our perspective.
Along with this comment, the analyst has set a target price for this stock at $40, an increase of over 400% from the current price.
ALX Oncology Holdings $ALXO-2.4%
ALX Oncology is a clinical-stage immuno-oncology company focused on supporting patients in their fight against cancer. They achieve this support through the development of drugs that inhibit the CD47 checkpoint pathway and link the innate and adaptive immune systems.
Their lead drug candidate is evorpacept, a next-generation CD47-blocking drug that is expected to be effective for treating a variety of cancers. The company is expected to receive data from a Phase 2 study of evorpacept in the second half of 2023 and will also announce dose optimization results from a Phase 1b clinical trial of evorpacept in combination with azacytidine. This study (ASPEN-02) focuses on patients with myelodysplastic syndromes (MDS).
Another important step that ALX Oncology plans to take in the second half of the year is the initiation of a Phase 1b dose-optimization clinical trial (ASPEN-05) of evorpacept in combination with azacitidine and venetoclax for the treatment of patients with relapsed or refractory or newly diagnosed acute myeloid leukemia.
In the first half of 2023, the company is also expected to see the filing of an IND (Investigational New Drug) for ALTA-002, a Toll-like receptor agonist antibody conjugate SIRPa, which it is working on with Tallac Therapeutics.
Here again, the same is the case, the company is in the clinical phase, thus generating no profits and spending funds only on the development of its drugs. Currently, the company has about $270 million in current assets. This means that the company could have enough funds to last until about the first half of 2026.
If you are more interested in this company, and would like to learn more about it, then visit their website.
The company's catalysts also caught the eye of Piper Sandler, an analyst at the company, who added the following commentary.
Catalyst flow remains on track with important clinical updates in gastric cancer/GEJ (ASPEN-06, P2 update) and MDS (ASPEN-02, P1b dose extension data) expected in the second half of 2023. Beyond that, development continues across the pipeline, with HNSCC studies ongoing (ASPEN-03, ASPEN-04; data in 2024) and IND filings for ALTA-002 expected in the first half of 2023. Overall, we continue to see evorpacept as a best-in-class adept for targeting CD47 and remain optimistic.
Along with this commentary, the analyst has set a target price of $48, up over 600% from the current price.
Conclusion
While this may be quite a risky stock, the analysts believe there are catalysts here that can trigger a huge run higher. As we said at the beginning. It doesn't take that much growth for these small stocks to deliver handsome appreciation.
Even though these are small companies, they are sure to find a place in many investors' portfolios. But here it's also very important to think about portfolio allocation so that you limit the risk of a possible larger percentage loss.
WARNING: I am not a financial advisor, and this material does not serve as a financial or investment recommendation. The content of this material is purely informational.
