Investing

After an Implosion, Reviewing Analyst Stocks Called to Rise 100% or More

Aqua Metals: Never doubled, shares just went lower and lower.

Aqua Metals Inc. (NASDAQ: AQMS) was started as Buy and assigned a $25 price target at Rodman & Renshaw on June 22, 2017. This was against roughly $12 a share at the time. Aqua Metals is volatile as it has developed AquaRefining to recycle lead acid batteries. The 52-week high was $22.75 when the call was made, but shares have tanked to about $2 now, and its current 52-week high is just $5.80. Holding this all the way down would have been close to 80% loss with no limits and trailing stops.

Fairmount Santrol: It’s come back up 60% but was disappointing!

Fairmount Santrol Holdings Inc. (NYSE: FMSA) was trading at $3.73 when Jefferies lowered its target to $8 in June 2017, still more than 100% upside at the time. Its stock ended up going as low as $2.50 after that call, but it was last seen trading at $6.01 for a gain of 60%.

Helix Energy: Up about 70%, but no double!

Helix Energy Solutions Group Inc. (NYSE: HLX) is in the business of offering specialty services to the offshore energy industry. Cowen issued an early-June transfer of coverage report with an upgrade to Outperform — and its target was raised to $10 from $8 — as a top pick where “the low case is baked into the price with a very attractive risk-reward profile.” Its shares were at $4.90 back then, and the stock was last seen trading at $8.30. That’s up 70%, but still not a double.

Intellia: Up 40%, but no double yet!

Intellia Therapeutics Inc. (NASDAQ: NTLA) was part of a larger speculative buy grouping at Jefferies on June 22, 2017. The firm’s Buy rating with a $36 price target implied upside of 141% at the time, due to being at the forefront of gene-editing to induce permanent changes. Intellia shares were closer to $15 when Jefferies made the big call, but it’s now trading closer to $21.10, for a gain of 40%.

Nutanix: Made it to a double!

Nutanix Inc. (NASDAQ: NTNX) was part of a set of Focus List calls from Credit Suisse back around June 7, 2017, when the firm issued an Outperform rating and a $38 price target. It was trading at $18.67 at the time, but the shares were last seen at $37.50. That effectively met its target of a stock to double, with the timing purely coincidental.

Recro Pharma: Up 36%, but no double!

Recro Pharma Inc. (NASDAQ: REPH) was reiterated as Buy with a $21 fair value estimate at Janney on June 14. While this was up over 200% from the $6.47 prior closing price, its IV-Meloxicam was touted as leading to more opioid-free recovery after surgery. Recro Pharma shares were last seen at $8.85, for a 36% price change. Still, its shares have so far come nowhere remotely close to doubling or tripling from last summer.

Analysts make a wide degree of assumptions about companies, but investors almost never see an analyst issue a 50%, 100% or exponential upside target on a stock that’s already in the Dow or S&P 500. You only see such huge upside calls made in speculative stocks, and most of those speculative companies have a market value that is in the tens of millions or a few hundred million dollars at the time.

This is just more proof that some speculative stocks can double but then still end up giving all their gains back (and then some). And some other speculative stocks only cause misery to their investors. As always, caveat emptor.

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