4 Red-Hot Tech and Biotech Stocks to Buy With Up to 100% Upside Potential

December 27, 2017 by 247lee

For investors who have watched the staggering moves in bitcoin and somehow feel that they missed the bus, they were reminded last week when the cryptocurrency dropped back almost 35% just how insanely volatile the trade can be. While it may yet to prove to be the new standard for payment in the future, that sure won’t be the case anytime soon.

At 24/7 Wall St. we comb through reams of analyst reports looking for potential home runs, and what better time of year than right now to look for potential moon shots for 2018. We screened our extensive research database and found four companies rated Buy at various Wall Street firms with price targets that projected as much 100% upside from current levels.

While only suited for extremely aggressive accounts, these four stocks could provide investors with some much needed alpha for their portfolios.

Array BioPharma

This stock looks to be breaking out through a triple top formation. Array BioPharma Inc. (NASDAQ: ARRY) is a biopharmaceutical company focused on the discovery, development and commercialization of targeted small molecule drugs to treat patients afflicted with cancer. Its programs include these three cancer drugs: binimetinib, encorafenib and selumetinib (partnered with AstraZeneca).

Binimetinib and encorafenib are in Phase 3 trials in advanced cancer patients, including the COLUMBUS trial studying encorafenib in combination with binimetinib in patients with BRAF-mutant melanoma and has initiated BEACON CRC trial to study encorafenib in combination with binimetinib and cetuximab in patients with BRAF V600E-mutant colorectal cancer.

The analysts at SunTrust are bullish on the company’s recent spin-off and noted this in a research report:

While expected, it is positive to see that Array is spinning out ARRY-797. Yarra Therapeutics (private), an initially wholly owned subsidiary, will be focused on orphan diseases. This allows Array to remain focused on oncology. We view the news as incrementally positive, highlighted by the stock rising 11% this morning. We believe the spin could help Array realize the value of ‘797, yet allow the company to remain focused on becoming an oncology pure-play, better positioning Array as a potential M&A target, in our view.

The SunTrust and Wall Street consensus price target are both $16, and the shares closed trading Tuesday at $12.51.

La Jolla Pharmaceuticals

This biotech company has been mentioned recently as a possible takeover candidate. La Jolla Pharmaceuticals (NASDAQ: LJPC) is a biopharmaceutical company focused on the discovery, development and commercialization of innovative therapies intended to significantly improve outcomes in patients suffering from life-threatening diseases.

The company’s LJPC-501 is its formulation of angiotensin II for the potential treatment of catecholamine-resistant hypotension (CRH). It has initiated a Phase 3 trial of LJPC-501 for the treatment of CRH, called the Angiotensin II for the Treatment of High-Output Shock 3 (ATHOS) Phase 3 trial. LJPC-401 is its formulation of synthetic human hepcidin for the potential treatment of conditions characterized by iron overload, such as hereditary hemochromatosis, beta thalassemia, sickle cell disease and myelodysplastic syndrome.

A recent FDA approval is a huge plus, and the SunTrust analyst said this:

The company provided a corporate update on Giapreza (a novel formulation of angiotensin II), which received FDA approval 2 months ahead of schedule for the treatment of septic or other distributive shock. Given Giapreza’s broader than expected label, and the high levels of awareness among healthcare providers for a new drug in a setting with significant unmet needs, we believe the Street is likely underestimating the market opportunity, which we now estimate at ~$700 million in the U.S.

The SunTrust price target was raised to a staggering $65 from $57. The consensus target is $51.67, and shares closed Tuesday at $32.79.

SMART Global Holdings

This company was this year’s moonshot initial public offering and has continued to post exploding earnings. SMART Global Holdings Inc. (NYSE: SGH) provides specialty memory solutions. It manufactures memory for desktops, notebooks, servers and mobile memory for smartphones. The company serves original equipment manufacturer (OEM) customers to develop memory solutions.

SMART provides customized, integrated supply chain services to certain OEM customers to assist them in the management and execution of their procurement processes. The company offers its products and services under a range of categories, including dynamic random-access memory (DRAM) components, DRAM modules, flash components, mobile memory and supply chain services.

The company posted massive earnings last week that trounced that numbers it had already raised higher in November. Stifel analysts have the stock highly ranked on their Select List. They said why in a recent research note:

The company delivered a strong beat to the pre-announced upside to estimates from a month ago. February quarter outlook also beat the pre-announced expectations for flat sequential results. Management is now looking for 9% growth quarter over quarter in the seasonally weak February ending quarter. SMART global holdings remains on our Select List as a top long idea. The company has many favorable trends – recovering Brazilian economy, increasing dollar content in smart phones built in Brazil, strong worldwide demand for memory/storage products and an experienced management team.

Stifel raised its $40 price target to $47, while the consensus target is $45.50. Shares closed trading on Tuesday at $33.58.

Western Digital

This long-time innovator in the storage industry is a leader in the total addressable HDD market. Western Digital Corp. (NASDAQ: WDC) is an industry-leading developer and manufacturer of storage solutions that help to create, manage, experience and preserve digital content.

The company is responding to changing market needs by providing a full portfolio of compelling, high-quality storage products with effective technology deployment, high efficiency, flexibility and speed. Its products are marketed under the HGST and WD brands to original equipment manufacturers, distributors, resellers, cloud infrastructure providers and consumers.

Western Digital stock traded down after earnings despite being above Wall Street earnings expectations for the fourth quarter and fiscal 2018, as investors were concerned about peak margins. Analysts feel that NAND supply-demand will not come into balance until mid-calendar 2018, creating forward upside potential.

In addition, the long-drawn dispute with Toshiba finally was put to rest, and Merrill Lynch recently said this:

The global settlement is positive as it removes uncertainty of NAND supply for Western Digital and the company gets to protect its intellectual property. The company positively preannounced the December quarter (revenue high end, margins came in better, offset somewhat by higher operating expense). Visibility has improved and management expects the flash supply/demand environment to remain healthy throughout 2018.

Shareholders receive a 2.42% dividend. The $120 Merrill Lynch price target compares with a $115.77 consensus target. The stock closed trading on Tuesday at $80.00.

Two biotech and two tech stocks that not only have big upside potential, but they are priced right for investors looking for good entry points. Again, these are only suitable for very aggressive accounts with high risk tolerance.