While most of Wall Street focuses on large and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. In fact, many of the biggest public companies, especially the technology giants, trade in the low to mid hundreds, all the way up to over $1,000 per share. At those steep prices, it’s pretty hard to get any decent share count leverage.
Many investors, especially more aggressive traders, look at lower-priced stocks as a way to not only make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
We screened our 24/7 Wall St. research database and found five biotech stocks that are rated Buy by Jefferies analysts, are trading under the $10 level and could provide investors with some solid upside potential. While much better suited for very aggressive accounts, they could prove exciting additions to portfolios looking for solid alpha potential.
This micro cap biotech play could be a big winner for ultra-aggressive accounts. Ardelyx Inc. (NASDAQ: ARDX) focuses on addressing cardiorenal and gastrointestinal diseases. It operates through the research, development and commercialization of its biopharmaceutical products segment. The company’s products line includes cardiorenal and gastrointestinal portfolios.
The Ardelyx cardiorenal portfolio includes two Phase 3 clinical product candidates. Tenapanor is in Phase 3 clinical development for treating hyperphosphatemia in end-stage renal disease patients on dialysis. RDX7675 is in Phase 3 clinical development for treating hyperkalemia in chronic kidney disease and heart failure patients. This portfolio also includes RDX013 and RDX011. The gastrointestinal portfolio is led by tenapanor for the treatment of irritable bowel syndrome with constipation. This portfolio also includes RDX8940, RDX011 and RDX023.
The Jefferies price target for the shares is $7, which compares with the much higher Wall Street consensus target of $11.83. The stock closed trading on Friday at $3.89 a share.
This company has been hitting screens as a potential takeout target. BioCryst Pharmaceuticals Inc. (NASDAQ: BCRX) designs, optimizes and develops novel small molecule drugs that block key enzymes involved in rare diseases. The company currently has one approved product: Rapivab (for influenza) and two pipeline products: BCX7353 (for hereditary angioedema) and BCX4430 (an antiviral).
Last month the company announced that the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health, had awarded BioCryst an additional $3.5 million to support clinical trials of galidesivir in patients with yellow fever. Yellow fever represents a significant unmet medical need and a new potential use of galidesivir. With this additional $3.5 million contract amendment, the NIAID development contract for galidesivir now totals $43.0 million.
Jefferies has a price target of $8.50 for the stock, but the posted consensus target is $10.25. The shares closed at $7.16 on Friday.