What do you look for when it comes to finding the best penny stocks to buy? Are you looking for technical set-ups, or are you searching for news catalysts? You may even be looking to find cheap stocks for your watch list. Another way traders put together a list of penny stocks is by observing what analysts are saying. While these firms aren’t foolproof with their ratings, they are interested in being as accurate as possible.
Now, are ratings the only thing you should look at? In my opinion, no, and there should be far more research done outside of reading analysts’ opinions. Regardless, it doesn’t hurt to understand the sentiment. Penny stocks, in particular, are highly speculative. With this, it’s important to note when analysts actually issued their target and rating. We’ll often see the firms announce a Buy, Sell, Hold, or equivalent and not follow up on that rating for months. In this world of small-cap stocks, what was going on 5 months ago can be much different than what’s going on “right now.”
So in using ratings as part of your research, it’s also important to note the timing of that rating. If it’s an older update, make sure that things are still operating with the same strategy as when the analysts weighed in. With this in mind, here’s a list of penny stocks with bullish analyst sentiment, and one even has a triple-digit price target. Will they be on your watch list this month?Penny Stocks To Buy [According To Analysts]
- Senseonics Holdings Inc. (NYSE: SENS)
- Novan Inc. (NASDAQ: NOVN)
- ADMA Biologics Inc (NASDAQ: ADMA)
- BELLUS Health Inc. (NASDAQ: BLU)
Another one of the companies we’ve discussed recently is Senseonics, which focuses on glucose monitoring. Its implantable glucose monitoring systems are used by those who have diabetes via its Eversense product. Last week shares of SENS stock skyrocketed after news surfaced that the company was granted a U.S. patent titled “Removal Tool For Subcutaneous Implantable Device.”
Shares subsequently slipped after Senseonics announced a $50 million offering. However, that seems to be a distant memory on Monday. The company announced that EmblemHealth is providing coverage for the Eversense® CGM System. This coverage decision adds to the increased number of payers writing Eversense into their CGM coverage policies. This milestone now expands access to Eversense to roughly 2.9 million residents of New York, New Jersey, and Connecticut.
Looking at analyst sentiment, several are following the stock. BTIG Research, for instance, has a Buy rating Senseonics. The firm also placed a $1 price target. Obviously, SENS has surpassed this level over the last few weeks. However, at the time the company issued this, shares were trading around 50 cents.Novan Inc.
Similar to the others mentioned above, Novan has experienced a nice uptick in trading momentum this year. Shares of NOVN stock have been climbing for weeks. Given the interest in COVID-related stocks, this may be one to watch as investors shift focus from vaccines to preventative treatments. The main reason is that Novan’s intranasal drug, berdazimer sodium, has been indicated for COVID-19.
This week the company announced a follow-up and progress update on its current initiatives. This included an update that enrollment for its B-SIMPLE4 pivotal Phase 3 study reached 90% of the targeted subjects for enrollment in the study. This trial will evaluate its SB206 topical antiviral gel for the treatment of molluscum contagiosum. Additionally, the company inked a deal for a new corporate headquarters in North Carolina. This will support R&D as well as manufacturing.
Last year, H.C. Wainwright put its rating on the company giving it a Buy. The firm also placed a $1.50 target. Considering that it was announced in May, it seems that the analyst’s outlook was correct so far. NOVN stock hit that mark this week.ADMA Biologics Inc.
This has been one of the biotech penny stocks we’ve watched for a while. However, ADMA Biologics seems to have recently found a stronger footing in the stock market. Volume has increased as well as price over the last few months. Meanwhile, the company has managed to execute on several fronts. Earlier this month, ADMA announced that the Centers for Medicare and Medicaid Services approved transitional pass-through payment status and established a new reimbursement C-code, C9072, for ASCENIV. This is the company’s treatment for primary immune deficiency disease.
As another testament to its progress, its latest preliminary earnings suggest strong growth in the company. ADMA announced preliminary Q4 and full-year results this week. Of note, the company achieved record Q4 preliminary unaudited revenues of $13.9 million. This was 16% higher than its fourth-quarter in 2019. The preliminary results for the fourth quarter of 2020 also represent its highest revenue-generating quarter since its inception. Full-year 2020 preliminary unaudited total revenues came in $42.2 million, 44% higher than 2019.
Given this as the case, it’s no wonder that analysts like H.C. Wainwright are bullish right now. This month the firm adjusted its price target from $11 to $12, keeping its Buy rating. That puts the ADMA stock forecast 421% higher than its current trading levels.BELLUS Health Inc.
BELLUS has been on our list of penny stocks to watch since it became a penny stock last year. After announcing bad news, the biotech company’s shares dropped from over $10 to under $3. All the while, the focus has been on the company’s plan to right the ship and regain traction. Over the last few months, BLU stock has steadily climbed, now to over $4 per share for the first time since its epic drop.
Late last year, Evercore ISI gave an Outperform rating on the company. It also issued a price target of $12, 185% higher than the current market price. Why are analysts so bullish on the company? It could have something to do with some recent developments that’ve been announced over the last few months. Specifically, the company announced dosing its first patient in a Phase 2b trial of its BLU-5937 focusing on refractory chronic cough patients. This is the same treatment that was the cause for concern last year. Furthermore, topline results are expected later this year.
This week could be one to have BLU on the watch list. The company’s Chief Medical Officer and its Senior VP of Drug Development present data on BLU-5937. These will be presented at the Eleventh International Virtual Cough Symposium on Friday.Final Thoughts On Analysts & Penny Stocks
Analyst ratings are a good tool to have in your toolbox. But they shouldn’t be the only thing you rely on. As you’ve probably noticed, not all penny stocks become the big winners that some analysts may think. However, as a gauge of sentiment, these can help. If analysts are bullish, understand why, and if they aren’t, figure out if they missed something. At the end of the day, the choice to buy or not is up to you. So weigh your risk and reward properly and figure out if certain stocks fit your style of trading.