We’ve discussed analysts’ ratings and penny stocks plenty of times in the past. But where should you really stand on the topic? It all depends on your general trading strategy. Do you actually look at fundamentals, or are trading based on momentum? A lot of this can also depend on the amount of time you’re looking to actually hold shares. If it’s a day trade, for example, you may be looking for a single catalyst to point to, then buy & sell within a few hours. Analyst ratings may have a minimal role in your 10-minute DD.
On the other hand, if you’re looking for penny stocks to buy and potential hold, fundamentals could play a larger role. Whichever your strategy, the goal is the same: make money and repeat the process. For this article, we’re going to be looking at what analysts have to say about a few cheap stocks right now. Whether or not their opinion matters to you is, once again, based on your strategy.
Other than analyst ratings, you can also look for things like sector and industry trends. If you look at what’s happening in the stock market today, you’ll see several sectors taking a beating. Industrials, financials, and tech. On the other hand, you may see things like healthcare, biotech, and green energy penny stocks holding their own. Here’s a quick list of penny stocks that analysts have rated a buy.Penny Stocks To Buy [according to analysts]
- Zosano Pharmaceuticals (NASDAQ: ZSAN)
- 9 Meters Biopharma Inc. (NASDAQ: NMTR)
- Aerpio Phamaceuticals Inc. (NASDAQ: ARPO)
H.C. Wainwright’s latest rating on Zosano Pharmaceuticals sits at Buy. The firm has also given the stock a $2 price target. This may not seem like a lofty target. However, based on the fact that ZSAN is one of the penny stocks under $1 on this list, that forecast is significant. Despite the fact that shares are trading below $1, the penny stock itself has managed to climb significantly over the last few months. It reached a 52-week low of $0.33 in November but since then Zosano has been making strides fundamentally, which has become a stronger point of focus for the market.
After reporting year-over-year EPS growth in its Q3 earnings in November, the company shifted attention to obtaining resolution regarding the NDA for its Qtrypta treatment. The drug is under development for treating mild to severe migraines. In September the company received deficiency comments from the FDA, which sent shares much lower at the time.
Fast-forward and now speculation has begun to focus on a Type A meeting with the FDA. The purpose of the Type A meeting is to receive FDA input on the requirements for the resubmission of the Qtrypta™. This request was made on December 30th and why that’s important is based on the fact that the FDA usually responds within 30 days of requests like these. There haven’t been any further updates to this and we’re approaching the end of the month. The big question now is will Zosano receive comment from the FDA sooner than later on resubmitting the Qtrypta™ New Drug Application?9 Meters Biopharma Inc.
A big after-hours gainer from Thursday was 9 Meters Biopharma Inc. We’ve discussed NMTR stock several times in the past few months due to the attention it has received. After hours, NMTR stock shot up by around 21%, after ending the day at $1.30 per share. That momentum continued into Friday’s session with a move higher to over $1.50 by mid-morning.
9 Meters Biopharma focuses on the treatment of gastrointestinal disorders, including short bowel syndrome and celiac disease. The company holds over 150 patents as of December 2020 and is working daily to increase this number. More recently, 9 Meters Biopharma is attempting to utilize its drug larazotide for healing lung injury relating to Covid-19 cases. Before the drug’s relation to Covid, larazotide was one of the few in a Phase 3 trial to treat celiac disease.
While it does have four other drugs in its pipeline, right now its focus is rightfully on larazotide. Last month, the CMO of 9 Meters Biopharma, Patrick Griffin, stated that larazotide could have a healing affect on the lungs of Covid-19 patients. Obviously, it will take some time to see the actual data that comes from this claim. But, this news is definitely encouraging for the company and investors alike. A few weeks ago, news came out that Adage Capital Partners filed a 13G form to take a passive stake in NMTR. Currently, Adage holds roughly 6.4% of the shares of 9 Meters. This is important because it shows there is institutional confidence in 9 Meters Biopharma.
Furthermore, analysts at Oppenheimer initiated coverage on the penny stock this week. The firm gave an Outperform rating as well as a $6 price target.Aerpio Phamaceuticals Inc.
Analysts. at H.C. Wainwright have given Aerpio a Buy rating as well. The firm currently holds a $1.50 price target, which, as of today has been surpassed. Since falling hard in December, shares of ARPO stock have been steadily recovering. They haven’t fully closed the gap as the penny stock was trading north of $2.30 before the drop. However, some recently developments have helped it claw higher in 2021.
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Earlier this year, the company announced that its Board of Directors initiated a process to “explore and review” a range of “strategic alternatives”. The goal is maximizing stockholder value from the company’s clinical assets and cash resources. These amounted to $47.3 million as of September 30, 2020. Furthermore, the company’s current list of Phase trials will be part of the review process. These include its Phase 2 program of razuprotafib in COVID-19. It also includes Phase 2 program of razuprotafib in glaucoma.
Aerpio also said that it would be open to partnering its programs and potentially be acquired. While the market awaits further details, momentum has built up in a big way Friday. ARPO stock traded more than 770% more volume and saw a price increase of over 20%.