Danger and reward are the watchwords of all investing, and that’s very true within the inventory markets. Enterprise cycles flip up and down, economies rise and fall, corporations succeed or fail on idiosyncratic grounds – it takes a particular form of danger tolerance to attempt to learn the tea leaves scattered on Wall Road.
However the savvy investor is aware of that tolerating danger is the important thing to success – and that few inventory segments supply a greater reward potential, for the chance concerned, than the penny shares. These shares, priced beneath $5 every, can supply a horny mixture of low value of entry and strong potential for high-percentage returns, and triple-digit share appreciation isn’t unusual. The chance – if these shares flip south, the losses could be simply as heavy.
Nonetheless, for the risk-friendly traders, the ‘pennies’ are a well-liked alternative, and that brings these low-cost shares onto the analysts’ radar screens. In truth, two specifically have caught the specialists’ eyes – for his or her potential to surge over 200%. Moreover, in accordance with the TipRanks database, every has earned a “Robust Purchase” consensus ranking from the analyst neighborhood.
Clearside Biomedical (CLSD)
We’ll begin with Clearside Biomedical, a medical analysis agency targeted on ocular well being. Particularly, Clearside is engaged on the event of latest therapies for critical ailments that have an effect on the again of the attention. The corporate describes its aim as restoring and preserving imaginative and prescient, and has developed a patented suprachoroidal area (SCS) microinjector, a novel supply mechanism that may direct the therapeutic agent on to the again of the attention.
Clearside at the moment has one product, Xipere, authorised to be used within the US. That is the agency’s first industrial product, and the primary authorised therapeutic agent designed particularly for SCS supply. The drug is a therapy for macular edema related to uveitis, the primary such remedy available on the market, and has been licensed to Bausch + Lomb for commercialization within the US and Canada.
As well as, the corporate is engaged on a pipeline of small-molecule drug candidate compounds appropriate for the SCS microinjector system, designed to take most benefit of that novel pathway within the therapy of eye ailments. Probably the most notable of those, CLS-AX, is a therapy for neovascular age-related macular degeneration, or moist AMD. CLS-AX, or axitinib, has the high-potency and pan-VEGF attributes of TKI axitinib, mixed with the specialised use of the focused SCS microinjector supply. The drug candidate’s small molecule suspension permits for enhanced sturdiness.
CLS-AX is present process a Part 2b ODYSSEY trial, a take a look at of the drug as delivered by the SCS microinjector within the therapy of moist AMD. The corporate is progressing with the trial, and not too long ago reported that randomization has been accomplished. Topline information is predicted from this medical trial in 3Q24.
The ODYSSEY trial, and the potential inherent within the CLS-AX drug candidate, caught the eye of JMP’s Jonathan Wolleben, a 5-star analyst rated within the high 3% of the Road’s inventory professionals.
“We proceed to advocate CLSD shares forward of its ODYSSEY information, which we predict have a excessive chance of displaying improved sturdiness vs. Eylea. Whereas ODYSSEY isn’t powered for noninferiority on its major BCVA endpoint, administration expects CLS-AX may have related outcomes to Eylea, with all CLS-AX handled sufferers going >/=4 months earlier than requiring rescue, and the bulk lasting six months. ODYSSEY enrolled shortly and exceeded the 60-patient goal, reflecting moist AMD sufferers’ enthusiasm for CLS-AX… We consider CLSD has probably the most room for upside within the group and is price traders looking earlier than the corporate reviews [the] Part 2 information in 3Q24,” Wolleben opined.
To this finish, Wolleben charges CLSD an Outperform (i.e. Purchase) together with a $5 value goal. This suggests shares might soar ~268% within the subsequent yr. (To look at Wolleben’s monitor report, click on right here)
Wolleben isn’t the one analyst to see a strong upside right here; all three of this inventory’s current critiques are optimistic, leading to a Robust Purchase consensus ranking. The inventory is buying and selling at $1.39, and with a mean value goal of $5.67, the upside potential quantities to roughly 317%. (See CLSD inventory forecast)
Accuray Inc. (ARAY)
Subsequent up is Accuray, a radio-oncology firm that develops and manufactures medical gadgets for the supply of correct radiotherapy doses for most cancers therapies. Focused radiation doses have lengthy been utilized in most cancers therapies, to kill tumor cells and different malignancies; the important thing to success is as a lot within the precision of the concentrating on as in the kind of radiation used, to keep away from or decrease harm to and results on wholesome cells and tissue. Accuray has developed a line of merchandise to ship radiation therapies for a variety of affected person wants and has constructed up a world base of consumers within the medical area.
Some numbers will inform the story. Accuray has put in greater than 1,000 programs total and has actions ongoing in additional than 60 nations. The corporate’s whole revenues in fiscal yr 2023 got here to $447.6 million – and the agency was in a position to reinvest 12% of that income again into analysis and improvement tasks, to keep up its radiotherapy programs on the slicing fringe of each expertise and present medical observe.
The corporate’s two main merchandise are the CyberKnife and Radixact. The primary is a therapy unit designed to ship stereotactic radiosurgery and stereotactic physique radiation remedy with ‘robotic precision’ to any a part of the affected person’s physique. The unit is AI-driven and gives real-time movement synchronization. Radixact is an built-in 3D kVCT and megavoltage CT imaging system, designed to offer the superior imaging wanted for image-guided intensity-modulated radiation remedy and for 3D conformal radiation remedy. In brief, enhancing precision is in Accuray’s DNA.
Additionally of be aware for traders, Accuray introduced final October that its Tomo C system, a radiation remedy system for the Sort B market, has been authorised by the Chinese language Nationwide Medical Merchandise Administration to be used in that nation. The brand new system is made in China and represents an advance in the usage of radiotherapy for most cancers therapies. Tomo C is predicated on a platform that options helical imaging and radiation supply.
The Tomo C system is focused at rising markets, significantly in China the place it’s manufactured. Accuray can also be engaged on the launch of Helix, the same system scheduled to launch in FY25 in India. Helix may also use a helical supply system and shall be manufactured by Accuray in Madison, Wisconsin.
In Accuray’s final earnings report, launched on January 31 for fiscal 2Q24, the corporate reported revenues of $107.2 million. This was down 6.6% from the prior yr, however barely beat the forecast by about half 1,000,000 {dollars}. The corporate’s earnings, at a 10-cent per share loss by GAAP measures, missed expectations by 5 cents per share.
Regardless of the earnings miss, Roth Capital analyst Jason Wittes likes this inventory. He notes particularly the corporate’s strikes into rising markets, citing each China and India, and predicts sound progress in the long run. Wittes says of Accuray, “ARAY has about 10% market share within the radiation oncology area and is now reliably producing money. Enlargement into the worth priced phase with Tomo C (first installs in June FY4Q24) in China and Helix in India in FY25 positions ARAY to compete extra successfully in quicker rising rising markets. This enlargement ought to enhance income progress from low-mid-single digits to no less than mid-high-single digits, warranting investor consideration and a better valuation.”
Wanting forward, Wittes charges ARAY shares a Purchase and his $9 value goal signifies confidence in a strong 260% upside for the subsequent 12 months. (To look at Wittes’ monitor report, click on right here)
General, the analyst consensus here’s a Robust Purchase, primarily based on 3 optimistic scores set in current weeks. The shares are at the moment buying and selling for $2.52 and their $9.67 common value goal implies a one-year upside potential of ~287%, considerably larger than analyst Witte permits. (See Accuray’s inventory forecast)
To search out good concepts for shares buying and selling at engaging valuations, go to TipRanks’ Finest Shares to Purchase, a software that unites all of TipRanks’ fairness insights.
Disclaimer: The opinions expressed on this article are solely these of the featured analysts. The content material is meant for use for informational functions solely. It is rather vital to do your personal evaluation earlier than making any funding.