Arguably the most controversial on the Street, penny stocks are a hot-button issue. Usually, there isn’t a lot of middle-ground with respect to these tickers priced for less than $5 apiece. Dividing market watchers into two distinct groups, both sides present valid arguments laying out the pros and cons.Sure, there is reason enough to be skeptical. Often, a cheap stock is cheap for a reason, with the low share price potentially reflecting an underlying problem with the business, whether it be poor fundamentals or unbeatable headwinds. That said, a bargain price tag isn’t always indicative of a lost cause. For some, better days are on the horizon, and for very little money, investors can control a lot more shares. Therefore, even minor upward movements could result in massive percentage gains, and thus, significant returns.As the nature of these investments makes it difficult to gauge the strength of their long-term growth prospects, one effective stock selecting strategy is to follow the analysts’ advice. Turning to five-star analyst Leland Gershell from investment firm Oppenheimer, which ranks third on TipRanks’ list of Top Performing Research Firms, we wanted to see if any of his recent picks could lead us towards returns.Running three penny stocks boasting Gershell’s stamp of approval through TipRanks’ database, we found out that the rest of the Street is also on board. The cherry on top? Each Buy-rated ticker sports over 140% upside potential.Cerecor Inc. (CERC)With the goal of making life-changing medicines available to underserved patient populations, Cerecor wants to address the significant unmet needs within neurology, pediatric and orphan diseases. Based on its impressive pipeline, Gershell believes that its $2.73 share price presents a unique buying opportunity.The analyst points to CERC’s CERC-002 (anti-LIGHT mAb) candidate for respiratory complication management in severe COVID-19 as being a key component of his bullish thesis. At the end of May, Cerecor and its partner, Myriad Genetics, released positive biomarker analyses demonstrating that free levels of the cytokine LIGHT are tied to disease severity and mortality in COVID-19 patients suffering from acute respiratory distress syndrome (ARDS). This is important as roughly 15-20% of COVID-19 patients experience clinically significant pneumonia that most likely results from a hyperimmune response to the virus.Expounding on the implications of the results, Gershell stated, “While these data represent early results generated from a modestly sized patient population (47 COVID-19 patients compared to 30 healthy controls), they nonetheless motivate investigation of anti-LIGHT monoclonal antibody CERC-002 to mitigate or prevent cytokine storm-induced severe ARDS caused by COVID-19 and to decrease mortality and the need for ventilation. CERC is now advancing CERC-002 for potential use in this setting.”Adding to the good news, the first look at data from the CDG-FIRST retrospective study in congenital disorders of glycosylation is set to come in the first half of this calendar year. According to Gershell, the results could help accelerate the CERC-800 series’ FDA 505b2 development. Not to mention he tells investors “each approval would yield a (monetizable) Priority Review Voucher to CERC.”As for the proof-of-concept trial looking at CERC-007 in adult-onset Still's disease and multiple myeloma is slated to kick off in 4Q20 and 1Q21, respectively, shares could get another boost. In addition, data for CERC-006 in complex lymphatic malformations could be published in the first half of 2021.Gershell added, “Following recent balance sheet strengthening (stock offerings, sale of AYTU holdings), CERC is on solid footing to support operations as it continues to pursue Millipred sale. We expect shares to outperform as progress across the company's development portfolio is registered.”To this end, Gershell rates CERC an Outperform (i.e. Buy) along with a $10 price target. Should this target be met, a twelve-month gain of 266% could be in store. (To watch Gershell’s track record, click here) Looking at the consensus breakdown, it has been relatively quiet when it comes to other analyst activity. Only one other analyst has reviewed CERC recently, giving it a Hold recommendation. As a result, the consensus rating is a Moderate Buy. (See Cerecor stock analysis on TipRanks)Soleno Therapeutics (SLNO)Soleno Therapeutics primarily works on developing and commercializing therapeutics for the treatment of rare diseases, with its lead candidate, DCCR, being evaluated for use in Prader-Willi syndrome in a Phase 3 clinical development program. Currently going for $3.26 apiece, Oppenheimer's Gershell thinks now is the time to snap up shares. Gershell doesn’t dispute the fact that some investors expressed concern when Millendo Therapeutics discontinued the livoletide program after the asset’s pivotal failure in Prader-Willi syndrome (PWS), but he argues that this development isn’t necessarily a bad thing.“While disappointing for the PWS community given the dearth of treatment options, elimination of one of the two other candidates in late-stage development may be seen as a modest positive for SLNO. As both mechanism of action and route of administration differ between livoletide (injectable Ghrelin agonist) and SLNO's DCCR (oral KATP channel agonist), we do not see negative read-across from ZEPHYR to DESTINY PWS, expected to report top-line results this quarter,” Gershell commented.The readout of initial results from the placebo-controlled Phase 3 DESTINY PWS trial of DCCR is on track to report top-line results by June 30. “We maintain a favorable outlook heading into this reveal, and expect success to yield significant upside given current levels (~$140 million enterprise value),” Gershell said. With this in mind, the analyst reiterated an Outperform rating on SLNO with an $11 price target, implying 237% upside potential.Turning now to the rest of the Street, SLNO has received a total of 2 Buy recommendations, making the consensus rating a Moderate Buy. The $10.50 average price target brings the upside potential to 222%. (See Soleno stock analysis on TipRanks)Recro Pharma (REPH)Operating as a Contract Development and Manufacturing Organization (CDMO) business, Recro Pharma boasts capabilities that range from early feasibility and product development solutions to commercial manufacturing. Coming in at $4.95, Oppenheimer believes the selloff that resulted from a recent guidance revision makes the share price look like a steal.The company slashed its full year 2020 revenue and earnings guidance as a result of the impact from COVID-19 and more market competition facing one of its key products. Speaking to the former, Gershell points out the pandemic led to a reduction of existing commercial business as well as slower timing and decision-making by development customers due to the uncertain financial environment. It also didn’t help that two commercial product lines from two customers were discontinued, causing a $4 million revenue guidance reduction, with the analyst calling for a $7-8 million hit to 2021 revenue. Its staff was also cut by 10% to minimize costs.Additionally, it was originally thought that re-entering supplier Mylan, which competes with Teva, a 42% contributor to REPH's total revenue in 2019, would take 30% market share through 2020. However, updated information now indicates Mylan has 50% market share.Still remaining very much on board, Gershell said, “The degree of yesterday's update came as a surprise following recent guidance we interpreted as erring toward the conservative, given backlog of new business and continued efforts toward customer base expansion… While recovery may be sluggish as REPH navigates the balance of 2020, an attractive value case is made with shares having corrected to just ~6.4x EV-to-2020 adjusted EBITDA.”To provide more support for his bullish thesis, Gershell reminds investors that excluding COVID-19-related restrictions, operations are fully functional and the supply chain remains intact and current, with many obligations able to be executed virtually. REPH is also growing its product lineup to include clinical trial materials. The analyst also argues the recent recruitment of a senior business development head should facilitate new business.All of this prompted Gershell to maintain his bullish call. Having said that, he reduced the price target from $18 to $12. Even with the haircut, the figure still suggests shares could climb 142% higher in the next year.What does the rest of the Street think about Recro Pharma? One other Buy rating has been issued in the last three months, so the consensus rating is a Moderate Buy. In addition, the $15 average price target implies 203% upside potential. (See Recro stock analysis on TipRanks)To find good ideas for penny stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a newly launched tool that unites all of TipRanks’ equity insights.
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We at Insider Monkey have gone over 821 13F filings that hedge funds and prominent investors are required to file by the SEC The 13F filings show the funds' and investors' portfolio positions as of March 31st, near the height of the coronavirus market crash. In this article, we look at what those funds think […]
Shares in PG&E Corp. (PCG) sank as much as 13% in pre-market trading after the debt-strapped U.S. utility announced that a group of investors agreed to commit to a $3.25 billion equity investment at a discounted share price.The U.S. utility disclosed that a number of investors, including Appaloosa, Third Point LLC, Fidelity Management & Research Co. LLC and Zimmer Partners, have committed to buy shares at a price of up to $10.50 in an offering to generate $3.25 billion. The stock plunged as much as 13% in pre-market trading to $10.95 after closing at $12.52 on Friday.The equity investment agreement is part of the power provider’s plan to raise a total of $5.75 billion from public offerings as it embarks on a plan to exit from its bankruptcy, it said in a SEC filing.Over the weekend, Reuters reported that PG&E is working on a $11 billion debt-financing package as it seeks to come out of Chapter 11 proceedings by June 30 to tap a state-backed fund that would help utilities cope with the financial fallout suffered from wildfires.In January last year, the utility filed for bankruptcy, citing potential liabilities exceeding $30 billion from major wildfires sparked by its equipment in 2017 and 2018.It looks like some investors are welcoming PG&E’s plan to emerge out of bankruptcy. Since hitting this year’s low in March, shares have surged more than 70%.Merrill Lynch analyst Julien Dumoulin Smith on Friday reiterated a Buy rating on the company with a $14 price target, saying that with approvals and a reorganization plan in place, the stock offers a “much cleaner story”.“Under conservative assumptions we calculate shares as offering compelling total return prospects with additional catalyst potential if the backstop agreement were amended to provide better terms,” Dumoulin Smith wrote in a note to investors.Overall, the Wall Street analyst community is cautiously optimistic on the stock. The Moderate Buy consensus consists of 5 Buy versus 3 Hold ratings. The $14.06 average price target implies shares may gain another 12% in the coming 12 months. (See PG&E stock analysis on TipRanks).Related News: PG&E Is Said To Ready $11 Billion Debt Financing Plan Colombian Carrier Avianca Files for Bankruptcy Protection Due to Coronavirus Woes S&P Cuts American Airlines’ Credit Rating To ‘B-‘ from ‘B’ On Cash Flow Deficit Concern More recent articles from Smarter Analyst: * IFF Sales Drop 7% Due To Coronavirus Pandemic Impact; Shares Fall In Pre-Market * Tesla Sales Triple For China Model 3 Vehicle In May * Canada’s Bombardier Cuts 2,500 Jobs As Pandemic Stalls Travel Demand * Stitch Fix Earnings: Top Analyst Cautiously Optimistic Into Today’s Print
The Black Lives Matter movement has sparked some monumental changes, with cities making moves to defund police forces. Yahoo Finance’s Alexis Christoforous, Brian Sozzi, and Andy Serwer discuss. New figures show that Tesla Inc (TSLA) sold 11,095 Shanghai-made Model 3 vehicles in China in May, reports Reuters.This is more than triple the volume seen in April, according to the China Passenger Car Association (CPCA).The CPCA previously revealed that the electric-vehicle maker sold 3,635 vehicles in April- a dramatic 64% drop from the 10,160 units sold in March.Notably, CPCA uses a different counting method than Tesla’s deliveries.Shares in Tesla have now more than doubled on a year-to-date basis, and are currently trading up 2% in Monday’s pre-market trading.With shares at such high levels, analysts are taking a cautious stance on Tesla stock. The Hold analyst consensus is made up of 9 recent buy ratings, 9 holds and 10 sells. (See Tesla’s stock analysis on TipRanks)Meanwhile the average analyst price target stands at $619, indicating 30% downside potential lies ahead.Argus Research’s Bill Selesky recently reiterated his hold rating after Tesla slashed prices by about 6% on its Model S, Model X and Model 3 in North America and its Model S and Model X in China.The analyst stated “Due to the pandemic, we have lowered our 2020 vehicle delivery forecast by 19% to 409,000. We are also concerned about the potential impact of tensions between the U.S. and China on Tesla’s manufacturing facilities in Shanghai, as we had expected China to account for 30% of production volume in 2020, up from 13% in 2019”.Similarly Wedbush analyst Dan Ives is also staying on the sidelines, with a price target of $800 (10% downside potential).According to Ives, “the China growth story is worth $300 per share to Tesla as this EV penetration is set to ramp significantly over the next 12 to 18 months in a more normalized backdrop.”Related News: Grubhub Shares Lifted On Report Of European Acquirers Lining Up Can Tesla Provide the Million Mile EV Battery? Top Analyst Weighs In Uber In Partnership With MoneyGram For Driver Discount During Pandemic More recent articles from Smarter Analyst: * Canada’s Bombardier Cuts 2,500 Jobs As Pandemic Stalls Travel Demand * Stitch Fix Earnings: Top Analyst Cautiously Optimistic Into Today’s Print * Oxford Biomedica Clinches Manufacturing Deal For AstraZeneca’s Covid-19 Vaccine * Vale SA Forced To Shutter Itabira Mines; Analyst Sees The Bright Side
In this article you are going to find out whether hedge funds think Bed Bath & Beyond Inc. (NASDAQ:BBBY) is a good investment right now. We like to check what the smart money thinks first before doing extensive research on a given stock. Although there have been several high profile failed hedge fund picks, the […]
The oil giant plans to slash around 15% of its workforce in response coronavirus crisis.
Contemporary Amperex Technology Co. Ltd.'s chairman and founder Zeng Yuqun disclosed that his company, which already manufactures batteries for Tesla Inc. (NASDAQ: TSLA) and Volkswagen AG (OTC: VWAGY) is ready to make electric car batteries which will last as long as 16 years and 1.24 million miles.Million Mile Battery Is A Key Advance Batteries that last longer are important for electric vehicle makers such as Tesla and Volkswagen, as they can help them attract customers. These types of batteries could also be reused in a second vehicle increasing the attractiveness of EVs. Tesla is also working on this type of battery while cooperating with CATL.Waiting For Orders Talking to Bloomberg at the company headquarters at Ningde, China, Zeng disclosed, "If someone places an order, we are ready to produce." He said that the costs of such long-lasting batteries would be 10% higher than those currently in use. CATL is the world's largest maker of batteries. The company has a two-year battery supplier agreement with Tesla effective between July 2020 and June 2022.EV Demand To Pick Up Pace The ongoing COVID-19 pandemic is affecting sales, but EV demand is expected to pick up pace in early 2021, according to Zeng. He expects pent-up demand to be unleashed next year. CATL's batteries are used in Model 3 cars made by Tesla at its Shanghai Gigafactory. Other customers include Bayerische Motoren Werke AG (OTC: BMWYY) and Toyota Motor Corp. (NYSE: TM)Musk Is A Fun Guy Zeng told Bloomberg he often shares text messages with Tesla CEO Elon Musk, who he described as a "fun guy.""He's talking about cost all day long, and I'm making sure we have the solutions," said the chairman. Zeng also revealed that he had helped Musk in securing ventilators for COVID-19 patients. Musk had delivered 1000 such machines, obtained from China, to Los Angeles in March.May Build A Plant In The United States CATL is building a factory in Germany that would make more than 70% of batteries required by BMW. The Chinese battery maker is also working with Volkswagen's Audi and Porsche units. Zeng said although there are no specific plans for the U.S., he does not rule out building a plant in the country. He said, "Our team has made achievements in competing with our global rivals in overseas markets."See more from Benzinga * Scientists Funded By Chan Zuckerberg Foundation Want Facebook To Clamp Down On Misinformation And Incendiary Speech * British Drug Maker AstraZeneca Approached Gilead With The Deal That Can Become The Biggest On The Record * Starship Is Top Priority, Elon Musk Tells To SpaceX Employees(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) — Oil climbed in London following a sixth weekly increase after OPEC and its allies agreed to extend production curbs, although skepticism the cartel would be able to ensure full compliance tempered the gains.Brent futures rose 1.2% after swinging between gains and losses earlier. OPEC+ will prolong its historic curbs for an extra month and while the group cajoled Iraq, Nigeria and others to fulfill their promises to reduce production, concerns remain about the laggards sticking to their pledge. Libya, which is exempt to the cuts due to its civil war, is also returning supply to the market just as demand rebounds following the easing of lockdowns.“The issue of compliance is a major fault line in OPEC+ now,” said Vandana Hari, founder of energy consultancy Vanda Insights in Singapore. “Crude had mostly priced in the one-month extension of deeper cuts by Friday.”Oil has doubled since April as OPEC+ cuts trimmed a global glut and demand staged a rebound after the easing of restrictions in some countries, particularly China. Still, a sustained recovery may be hampered by deteriorating relations between Washington and Beijing, a second wave of infections, or returning U.S. shale supply following a gain in crude prices.The extension is a victory for Saudi Arabia and Russia, which were deadlocked in a price war just two months ago. OPEC+ agreed to cut output by 9.6 million barrels a day in July, 100,000 barrels a day less than this month as Mexico will end its constraints. Any member that doesn’t implement 100% of its curbs in May and June will make extra cuts from July to September to compensate.See also: Saudi Arabia and Russia Unite to Tackle OPEC’s Pinocchio Problem“The only potential Achilles heel, in what seemingly is an expected extension of current deep cuts through July, is the caveat of sub-compliant members requirement to compensate for lack of compliance,” Bjornar Tonhaugen, head of oil markets at Rystad Energy, said in a note. “Countries such as Iraq and Nigeria will struggle, we believe, to compensate fully, which puts increased pressure on the coherence of the alliance.”Following the extension to supply cuts, Saudi Arabia made some of the biggest increases to the price of its crude, with the steepest hitting July exports to Asia. The month-on-month boost to its flagship Arab Light to Asia, which accounts for more than half of Saudi oil sales, is the largest in at least 20 years. Overall, the gains erased almost all of the discounts the kingdom made during its brief price war with Russia.Meanwhile, Libya’s biggest oilfield is gradually resuming production after a five-month shutdown due to civil war. Output will start at an initial 30,000 barrels a day at Sharara and it will take three months to return to full capacity, according to National Oil Corp. It was pumping about 300,000 barrels a day before the shutdown.See also: China’s Oil Demand Recovery Is Complete With Record Import HaulIn the U.S. Gulf of Mexico, offshore drillers idled about a third of oil production, amounting to about 636,000 barrels of daily output, due to Tropical Storm Cristobal, according to the Bureau of Safety and Environmental Enforcement. The storm has crossed the coast.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.