The bull market has finally seen that stocks can correct 10% or more. It was long overdue, but what is so amazing is that even after four years it turns out that investors will buy stocks on pullbacks. 24/7 Wall St. reviews dozens of analyst upgrades and downgrades each day of the week to find hidden values and new trading and investing ideas for its readers.
Many of these calls cover stocks to buy, but some analyst calls are far more aggressive — some analyst reports actually predict that a stock could rise 100% or more.
With higher predicted returns, it is a given that there has to be more risk. Traditional analyst Buy ratings come with implied upside of 8% to 15%. So if you see a call of 50%, 100% or more, you just have to assume it has far more risk.
After looking at the list of stocks from this week, it is a far riskier list of companies than say Dow Jones Industrial Average or S&P 500 companies. These companies also have no solid track record of earnings and stable revenues as you would expect from a Dow or S&P 500 company.
There were five such analyst calls we tracked in the past week in which an analyst was willing to call for a stock to rise roughly 100%, and some even higher. Again, it cannot be stressed enough that calls of this nature are very risky. The stocks are all highly speculative, they often have few analysts or institutional investors in them, and they are all generally considered small-cap stocks.
To point out specific risk here, 24/7 Wall St. has even outlined at least one negative or word of caution in each stock. We wouldn’t want you thinking these analysts are omniscient or that they know the future, and we wouldn’t want you thinking we believe everything just because an analyst predicted it.
Advaxis Inc. (NASDAQ: ADXS) is a speculative clinical stage biotech shop focused on cancer. On Tuesday it was started with an Overweight rating with a $40.00 price target at Barclays. What stands out here is that this implies well over 100% upside. The prior close was $15.99 before the call, but the pressure on biotechs made it close at $13.79. With a positive survival rate in cervical cancer patients in its most recent study, will they really have to worry about Congress telling them their fair price if successful?
Advaxis has a consensus price target of $31.17, a market cap of $460 million and a 52-week trading range of $2.50 to $30.13. The company ended the July quarter with about $97 million in cash. It had no long-term debt to speak of and it had a net tangible asset base of $94 million.
CareDx Inc. (NASDAQ: CDNA) is so small it has never been covered in any story at 24/7 Wall St. In fact, we have never even heard of it. A firm named Craig-Hallum initiated coverage late in the week with a $13.00 price target, versus a $6.72 prior close. The prior week’s news was that CareDx’s donor-derived cell-free DNA assay was selected to support National Institutes of Health funded clinical trial for kidney transplant patients.
CareDx has a 52-week range of $4.60 to $8.00 and an $82 million market cap. Hint, hint — highly speculative.