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Penny stocks are a fascinating category of investment opportunities. While risky, these stocks allow you to invest in companies when they’re young and underdeveloped. So making the right penny stock picks can lead to powerful returns.
Of course, you should understand the risks before diving into these investments too. Though some penny stocks are profitable, these options are few and far between. Instead, many companies in this category are in the development or early commercialization stages of business, resulting in a need for financial support from the investment community. And that means there’s a high likelihood of failure.
One way to hedge your bets in the penny stock space is to look into what analysts have to say about the stocks you’re interested in. In particular, look for stocks with consensus price targets suggesting the potential for significant returns. You’ll find a few of those opportunities below.
Key Points :
- Analyst opinions can help you make educated penny stock picks.
- Though penny stocks are risky, making strong picks can be rewarding.
- Analysts expect IOBT, DHX, and SGMT to grow by 190% or more over the next 12 months.
- Find an even stronger opportunity by reading this report on what could be the next NVIDIA.
3 Penny Stocks Analysts Say Can Grow 190% Or More
While there’s no guarantee that any penny stock will produce significant gains, there are a few that analysts are expecting to see strong movement out of. Here are a few stocks that may be worth watching:
IO Biotech Could Climb Over 600%
Founded in 2014, IO Biotech ( NASDAQ: IOBT ) is a relatively young company. However, the company has the potential to make significant improvements in the outcomes for cancer patients. IO Biotech’s claim to fame is its cancer vaccine that it has developed to change the tumor microenvironment. The company hopes to bring its cancer vaccine to market as a combination therapy for patients with a wide range of cancer types.
And importantly, IO Biotech may be moving from clinical phases to commercial phases relatively soon. Its candidate IOB-013 has made it to Phase 3 clinical trials and could be at the center of an FDA application relatively soon, should the data from that trial prove to be positive.
Analysts seem to have a positive opinion about the company as well. Five analysts have recently shared their opinions about IO Biotech, two of whom rate the stock a Buy and three of whom rate it an Outperform. The consensus price target on the stock is $10.00, suggesting the stock could grow by more than 600% in the 12 months ahead.
DHI Group Could Grow Over 190%
Founded in 1990, DHI Group ( NYSE: DHX ) isn’t necessarily a young company. It’s been providing services to its customers for more than three decades. So, what does it do?
DHI Group is a technology company that focuses on global talent acquisition. The company offers artificial intelligence-based software and other tools to help companies pick the right talent from the global talent pool. In particular, the company is focused on sourcing talent in the technology field — talent like programmers, developers, and IT professionals.
According to analysts, now may be the time to consider adding this stock to your portfolio. Two analysts rate the stock a Buy and one rates it an Outperform. There are no Hold or lower ratings to speak of. The current consensus price target is $5.50 per share. If analysts are correct, that means DHI Group shares could climb by more than 190% in the next year.
Sagimet Biosciences Shares Could Climb More Than 1,000%
Founded in 2006, Sagimet Biosciences (NASDAQ: SGMT) is a multi-faceted biotechnology company that’s working to develop therapies across three core indications. Those indications include metabolic diseases, acne, and select cancers.
The company may be moving from development phases to commercial phases relatively soon. Its TVB-2640 candidate is currently in the late stages of development as a potential acne treatment as well as a potential cancer treatment. Perhaps that’s why analysts have such positive opinions of the stock.
There are currently six analysts weighing in on SGMT shares. Two analysts rate the stock a Buy, three rate it an Outperform, and one rates it a Hold. But that’s not the most exciting thing about analyst opinions. The most exciting part is that the lowest price target is $6, while the median price target on the stock is $32 per share. If analysts are correct, that means that even at the lowest price target, SGMT shares could climb over 100%. And if the consensus proves correct, it will climb over 1,000% in the next 12 months.
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