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2 “strong buy” penny stocks that could generate massive returns
There is a growing feeling among investors – relieved – that the new year will show less volatility than 2020. That would be enough to boost sentiment, but even better is the perception that markets in the US will drive higher in New Year. Marko Kolanovic, JPMorgan’s noted quant expert, sees the early stages of a positive feedback loop with lower volatility and systematic investment strategies to generate profits, attract more investors – and, in Kolanovic’s opinion, push the S&P 500 to 4,600 by the end of the year. This corresponds to an increase in the index of 25%. Such a general market environment is inevitably going to spawn many stock winners, and Wall Street analysts are busy alerting them. Among other things, they are tapping into penny stocks, stocks priced less than $ 5 per share. Their rock bottom price makes Pennies the logical place to look for huge returns on investment. While their risk factor is high, even a small increase in the absolute numbers will result in a massive percentage increase in the stock price. Using the TipRanks database, we identified two penny stocks that the pros believe could see explosive gains in the coming months. Not to mention, everyone in the analyst community gets a consensus rating of “Strong Buy.” 9 Meters Biopharma (NMTR) Some biopharma companies take a broad approach while others focus on a niche. 9 meters is one of the latter, aimed at unmet needs of gastrointestinal patients. The company’s development pipeline includes drug candidates being investigated for the treatment of short bowel syndrome (SBS) and celiac disease (CeD). These two conditions are both dangerous and difficult to treat. Limited to the details of the pipeline, the 9-meter flagship product, Larazotide, is in phase 3 development for the treatment of CeD. CeD affects about 1% of the population, but there are no approved therapies. The study’s key dates are expected in the second half of 2021. In addition, last December the company announced that it had entered into an agreement with EBRIS, the European Institute for Biomedical Research in Salerno, to study larazotide as a potential treatment for respiratory diseases due to COVID-19. The other major drug in the company’s pipeline is NM-002 for SBS. The company recently announced positive Phase 1b / 2a results that have had a measurable impact on disease symptoms of a compound that is well tolerated by patients. NMTR’s strong pipeline and $ 0.89 stock price has earned kudos from the pros on Wall Street. One of those NMTR bulls is Truists Srikripa Devarakonda. Quoting larazotide as a key component of his bullish thesis, the analyst noted, “We recognize that despite the encouragement of Ph2b data, investors will view a crucial study in a hard-to-crack celiac program as high risk. We model an unadjusted / adjusted peak sales of $ 705M / $ 353M and see a potential gain of 400% – 1650% due to the positive Ph3 reading. Devarakonda also sees “a significant unmet need for SBS” and continues to believe that “NM-002 has a differentiated profile vs. SOC. “Some of his key takeaways from the most recent Phase 1b / 2a results include:” 1) We believe the drug showed early activity in SBS patients; All 9 patients showed a significant reduction in total stool volume. The mean TSO reduction was 42% from baseline. 2) reactions are rapid with effects on the TSO being observed within 48 hours of dosing; 3) The safety profile looks favorable, we would like a longer service life. “To this end, Devarakonda is rating NMTR shares with a Buy and a price target of $ 5. This number shows his confidence in NMTR’s ability to grow 462% in the coming year. (To see Devarakonda’s track record, click here.) Turning now to the rest of the road, there are other analysts on the same page. With 4 buys and no holds or sells, the word on the street is that NMTR is a strong buy. Given the average target price of $ 4.33, an uptrend of 386% could be imminent for investors. (See NMTR stock analysis on TipRanks) Orchard Therapeutics (ORTX) Orchard Therapeutics takes a broad approach to the biopharmaceutical industry. The company is engaged in the development of gene therapies for rare, often incurable diseases, including neurometabolic disorders, primary immunodeficiency and blood disorders. The gene therapy approach uses blood stem cells to deliver corrected genetic information directly into the patient’s body. Orchard’s pipeline shows the diversity of gene therapy diseases – the company has no fewer than 12 drug candidates in development. Among these candidates, Libmeldy (OTL-200) stands out. Libmeldy is in the commercialization phase for the treatment of MLD (metachromatic leukodystrophy), a rare mutation-based genetic disorder of the nervous system. Libmeldy, which was developed to treat children with adolescent forms of MLD by replacing the defective ARSA gene, received its approval for medical use in the EU in December 2020. Wedbush analyst David Kidney Garden takes Libmeldy’s European approval and its implication for Orchard’s advancement. He writes: “We look forward to commercial execution of the company in the EU and possible approval in the US in 2022. Last month, ORTX received IND approval from the FDA for the program, which paves the way for discussions with US regulators to find an appropriate path for a BLA filing. “” Net-net, with potentially two gene therapies approved over the next 12 to 18 months and a pivotal trial beginning in a third (MPS-I), we believe ORTX stocks are undervalued at these levels “concluded the analyst. In line with his bullish comments, Kidney Garden rates ORTX as an outperform (i.e. Buy), and its target price of $ 15 suggests growth potential of 241% in the coming year. (To see Kidney Garden’s success story, click here.) Do other analysts agree with Kidney Garden? Do it. In the last three months only buy ratings (3) were issued. Therefore, ORTX receives a strong buy consensus rating. The average price target of $ 15 shows the stock could gain 241% over the coming year. (See ORTX stock analysis on TipRanks.) To find great ideas for trading penny stocks at attractive valuations, visit TipRanks ‘Best Stocks to Buy, a newly launched tool that brings together all of TipRanks’ stock insights. Disclaimer: The opinions expressed in this article are solely those of the analysts presented. The content is intended to be used for informational purposes only. It is very important that you do your own analysis before making any investment.