Analysts Like These Penny Stocks
If you're looking for penny stocks to buy right now, you're not alone. The stock market as a whole is trading higher this week, thanks to economic data on Friday. Though the market was closed, that didn't prevent the weekly jobs figures from coming out & they were strong.
Nonfarm payrolls increased by 916,000 in March, and the unemployment rate declined to 6%. Dow Jones had estimated 675,000 for the figure. Another 156,000 jobs were added to the totals for January and February, thanks to revisions. All of this has translated into a strong premarket session to kick-off the post-holiday week.
Traders Look To Analysts For Confirmation
Clearly, thanks to the strong numbers (or maybe the lower expectations), the market reaction has boosted shares across most sectors so far. Traders will look to analysts for consensus on things like economic data and even forecasts for individual stocks. In cases where expectations are high, you'll usually see some favorable momentum in the market. The opposite can be true when forecasts are a bit bleaker.
But here's the question, do analyst ratings matter when it comes to finding penny stocks to buy? In my opinion, there is something to be said about it. While it isn't the only thing you should look for when researching, it can be a placeholder. For an analyst to follow such a small company, there must be at least a few things that appeal.
It might be a treatment pipeline, or it could be a pending commercial launch for a product. Whatever the case, not all penny stocks are attractive enough that analysts will jump on board.
Hot Penny Stocks To Buy According To Analysts
If you're looking for analyst-rated penny stocks with Buy ratings, there are plenty to choose from. Keep in mind that most companies that fit the definition of a penny stock (shares traded under $5) are early-stage companies. They need to raise money, their business models can change, & the prices of the stocks themselves can open highly volatile scenarios in the market. But if you're ok with a little risk and like to follow analysts, here are a few hot names gaining interest in April:
Penny Stocks to Buy [According To H.C. Wainwright]: Uranium Energy Corp. (NYSE: UEC)
Price Target: $5
Uranium Energy Corp. has been in the spotlight this year thanks to growing interest in alternative energy. As the name suggests, Uranium Energy focuses on uranium mining and exploration. Last month was an active one for the company with new uranium purchases in the US.
The company reported 800,000 pounds were secured. Including the previously announced acquisition of 400,000 pounds, the company also entered into contracts to purchase a total of 1,200,000 pounds of U3O8 at a volume-weighted average price of $28.94 per pound.
To help with this initiative, the company has begun raising additional funds. As of the end of last month, it had secured a deal to raise over $30 million from institutional investors, which equated to 10 million shares at $3.05 per share.
Considering that UEC stock was trading below $3 for most of March, this was seen as a solid deal for the company. So much so that analysts at H.C. Wainwright adjusted their price target from $3.60 to $5. The firm also has a Buy rating on the stock. Based on Thursday's closing price, this forecast is over 50% higher than the current market price.
Penny Stocks to Buy [According To Canaccord Geuity]: Sesen Bio Inc. (NASDAQ: SESN)
Price Target: $7
Analysts have also grown bullish on Sesen Bio Inc. Canaccord Genuity recently boosted their price target on the stock from $5 to $7. Jefferies had also followed suit, upping its target from $3 to $6. Both also have a Buy rating on Sesen Bio.
One of the main points of interest has been on the company's pipeline. In particular, its Vicineum is being studied for non-muscle invasive bladder cancer. Last month, Sesen submitted its Marketing Authorization Application to the European Medicines Agency under its centralized procedure.
What's more, the company and Qilu Pharmaceutical announced an approved Investigational New Drug Application in China for Vicineum. Qilu Pharmaceutical is the company's partner in China and can now conduct clinical trials to assess the efficacy and safety of Vicineum as a potential treatment. It expects to file a product market application for the drug in 2022, according to Sesen.
Penny Stocks to Buy [According To Needham]: Mereo BioPharma Group (NASDAQ: MREO)
Price Target: $10
Shares of Mereo BioPharma gained momentum early on Monday thanks to new analyst coverage from Needham. The firm started MREO stock with a Buy and gave an initial price target of 10, which is 195% higher than last week's closing price.
The clinical-stage company has targeted oncology and rare disease with a pipeline of treatment candidates. Late last month, Mereo gave a business update outlining several key initiatives that the market could look for heading into 2021.
Dr. Denise Scots-Knight, Chief Executive Officer of Mereo explained, "We were able to further strengthen our partnering portfolio with licensing agreements for setrusumab and navicixizumab, with significant milestone payments tied to each deal. Our internal pipeline has continued to progress with etigilimab currently in a Phase 1b/2 basket study and alvelestat in a Phase 2 POC study for patients with AATD as well as a Phase 1 study in patients with COVID-19…As we look toward 2021, I believe that the Company is well-positioned to deliver on multiple milestones."
It's also worth mentioning that the company recently raised funds to put toward its clinical programs. Next week, the company will be at the Needham Healthcare Conference, April 12-15, 2021. So if MREO is on your list of penny stocks to watch, keep these dates in mind.
Will Analysts Be Right About These Penny Stocks?
Just like any investment, nothing is a guarantee. If any of these are on your list of penny stocks right now, don't forget about your risk/reward outlook. If analysts say that some stocks are a "sell," but the companies have big momentum thanks to new developments, then analysts may have been a little off in their rating. At the same time, if analysts say "buy" and the company announces a huge earnings miss and change of operations, then the same holds true with this example as well.
The one thing that matters is making money with penny stocks. So if you're using analyst ratings, take them into account but do more research to arrive at a well-thought-out conclusion as to whether they're good penny stocks to buy or if they should be avoided for now.
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