Investors know that the stock market always comes with potential risks. In fact, some investors might think that high risk means high reward potential. Is that true? Not always. Sometimes, the highest returns can come from the lowest-priced shares.
Wall Street analysts state that penny stocks or equities priced under $5 per share are in the limelight today when providing high returns. These stocks are luring investors with their bargain price tags and are an ideal combo of market attractions. They have low share prices and high return potential.
Here are three penny stocks with massive upside ahead that have successfully earned a strong buy rating from the analyst community and investors in general.
Top 3 Penny Stocks To Buy Under $5:
1. Oncolytics Biotech (ONCY)
Oncolytics Biotech is a biopharmaceutical company that focuses on immunotherapy combinations as treatments for cancer. The company aims to develop an intravenously delivered immuno-oncolytic virus called pelareorep. It provides therapeutic agents that directly target the tumor and consequently activate the immune system's natural defenses.
Developments are in the pipeline for this stock as they are conducting various research programs in partnership with several bold names in the biotech industry. ONCY has partnerships with companies like Pfizer, Merck, Roche, and Bristol-Myers Squibb, which will eventually boost its developments. It is testing the compatibility of pelareorep with these massive companies' anti-cancer drugs.
ONCY's robust development plans have given it recognition and praises from the analysts of Wall Street. Currently, ONCY has a share price of $4.19 and is one of the best penny stocks with a considerable upside ahead.
Patrick Trucchio, the H.C. Wainwright analyst, in his detailed research about Oncolytics as a stock, says that the company has a reasonably good investment opportunity and excellent growth potential.
Trucchio adds, "Oncolytics' lead compound, pelareorep (pela)… is on the cusp of demonstrating the potential to upend the treatment paradigms of several cancers, in our view... We believe it is the studies being conducted in breast cancer (BrCa) that could generate substantial value for shareholders in 2021 and beyond".
He also says that "Oncolytics has collaboration, supply agreements, and combination arrangements with many major pharmaceutical companies and organizations involved in cancer research…" which will eventually back up in its growth.
Therefore, with a $15 target price, Trucchio rates ONCY a potential buy. The target price suggests strong upside potential of 397%. ONCY has received a consensus rating of Buy from Wall Street with 5 Buys, no holds or sells. There will be an upside of 182% for investors considering its $8.15 average price target.
2. Xeris Pharmaceuticals (XERS)
Yet another profitable stock in the biotech sector is Xeris Pharmaceuticals. A significant advantage that XERS has compared to its peers is that it owns a drug in the market, which is approved for use.
XERS self-administered glucagon injection device, Gvoke, was approved by the FDA in 2019 September. The drug can be used by adults and kids who suffer from hypoglycemia or severe low blood sugar due to diabetes. From the past 5 quarters, this product drives a large portion of Xeris's revenue.
Xeris revealed an 11% sequential increase in its Gvoke prescriptions in its recent quarterly report for 4Q20. There was also an increase of $7.1 million for its quarterly sales, further adding to the full-year sales of $20.2 million in total.
Later, in December 2020, Xeris received a positive note from the European Medicine Agency on Oglou for its room-stable liquid glucagon used in Gvoke. Apart from this, Xeris also received the European Commission authorization for marketing which has already started in February 2021. The company is now targeting its 4Q21 to launch Oglou in the European Union.
Even after all this recognition, Xeris is not planning to pause its developments on its Gvoke laurels. With various additional self-administered glucagon devices and drug candidates for diabetes treatment and epilepsy, XERS has an active and strong development pipeline. This makes it a promising stock that assures good returns in the future.
The analyst Difei Yang envisions Gvoke as the key to Xeris' path of growth ahead. He opines, "Gvoke continued to gain market share in the quarter (we estimate recent weekly share at 16%) from legacy glucagon kits, but we note that the total glucagon market growth rate has stagnated as a result of Covid-19. We forecast a re-acceleration of the glucagon market in 2H21 as Covid-19 abates, and expect Gvoke fundamentals to improve when the market growth rate picks up".
Currently, Xeris has a share price of $4.41 in the market. Yang has a strong buy rating on XERS shares with its spew of developments and performance throughout the years. He has a price target of $14 that will eventually make room for a growth of over 225% over the coming decades.
3. LiveXLive Media (LIVX)
The third penny stock that has a good upside ahead is the digital entertainment platform LiveXLive Media. LIVX is the world's first all-in-one music and entertainment platform that brings together live streams of concerts and festivals, podcasts, customized radio streaming, and original video and audio content.
LIVX is a robust multi-faceted business that digitizes content for people so that they can watch it from the comforts of their homes. That is one reason why the stock had a spectacular year during the pandemic. The company showed an increase of 52% in revenue during its Q2 earnings report. The number of paid subscribers also increased to almost 21%.
A significant advancement that LiveXLive has in the pipeline and is slowly establishing is its plan to collaborate with original artists to create, promote, and sell NFT's. Creating and selling NFT's in the form of music, merchandise, photographs, tickets, and experiences helps LIVX create a unique mark in the new digital entertainment world.
LiveXLive currently has a share price of $4.48 and is a promising stock with good returns. Analysts mark LIVX as a strong buy with a target price of $10 with room for sufficient growth in the coming future.
The Bottom Line
The stock market is highly volatile. It can help you gain millions at the same time or suffer huge losses. A smart way is to look for penny stocks that provide high returns and have sufficient space for growth. The three stocks mentioned above are some of the stocks that have good return potential and are the best options for investors looking for future returns.