Billionaire Ken Griffin pulls the trigger on these 2-cent stocks
Risk and reward are the yin and yang of stock trading, the two opposite but essential ingredients in all market success. And there are no stocks that better represent both sides, risk factors and reward potentials, than penny stocks. These stocks, priced below $ 5 per share, typically offer high growth potential. Even a small gain in stock price – just pennies – quickly translates to high-yield performance. Of course, the risk is also real; Not all penny stocks are going to show this kind of profit, some of them are cheap for a reason, and not all reasons are good. So how are investors supposed to distinguish between long-term winners and short-term winners? Following the activity of the investing titans is a strategy. Hedge fund manager Ken Griffin, head of investment firm Citadel, is one of those titans, who has turned his college trading, from a PC in his bedroom, into a giant of the multi-billion dollar market. A look at Griffin’s performance during the coronavirus crisis shows just how successful he can be. In March of last year, when the crown hit the bottom of the markets, Griffin’s Citadel still generated a positive net return of 1.7%. And for the year as a whole, Citadel’s revenue totaled $ 6.7 billion, nearly double the previous peak in 2018. For inspiration from Griffin, we took a closer look at two penny stocks that Griffin’s Citadel made recently. . Using the TipRanks database to find out what the analyst community has to say, we learned that each ticker has Buy ratings and huge upside potential. Abeona Therapeutics (ABEO) We will start with Abeona Therapeutics, a clinical-phase biopharmaceutical company focused on gene and cell therapy. This is a cutting edge field, using the latest genome technology to treat genetic diseases by inserting corrected copies of DNA directly into affected cells. Abeona has seven candidate drugs in the pipeline, with EB-101 and ABO-102 being the most advanced and of greatest interest to investors. EB-101 is scheduled to begin a Phase III trial as a treatment for Recessive Dystrophic Epidermolysis Bullosa (RDEB). It is a connective tissue disorder that leaves patients prone to serious injuries and wounds to the skin. The cause is a genetic defect that leaves patients unable to produce the collagen necessary to secure the layers of the skin. If approved, EB-101 would become the first and only treatment available for RDEB. Treatment involves using the drug to transplant the affected gene into the patient’s skin cells, which are then transplanted to the affected areas of the skin. In early phase trials, the drug was well tolerated by patients, who showed clear improvement up to 2 years after treatment. The phase III trial is now enrolling patients. ABO-102, the next most advanced drug candidate, is in a phase I / II study as a treatment for Sanfilippo syndrome, a fatal disease of early childhood. Currently, the syndrome cannot be treated except through supportive care, and affected children usually survive to 15 years. ABO-102 is a gene therapy drug that is administered through a single intravenous infusion. It delivers working copies of the affected gene to the child’s central nervous system, allowing the body to naturally correct the deficiency of the enzyme behind the disease. Both drug candidates have received orphan drug designation in the US and Europe, so government assistance is available for their development. Additionally, they have also received the FDA’s Rare Pediatric Disease Designation. Abeona’s drug pipeline and $ 2.22 share price have earned him substantial praise from Wall Street professionals. This is the position taken by Griffin. Increasing its stake in the company by a whopping 181%, Citadel grabbed 1.846 million shares in the fourth quarter, which are now worth $ 4.06 million. HC Wainwright’s five-star analyst Ram Selvaraju also considers himself a fan. Selvaraju has recently published two notes on ABEO, focusing on the potential of EB-101 and ABO-102. Regarding the first, the analyst notes that “Following the successful completion of the FDA meeting, Abeona continues with all the necessary steps to enroll the next patient in the VIITAL study and expects to complete enrollment in 2021… In our opinion, the FDA meeting and the resulting feedback bodes well for Abeona, as the agency appears to agree with the company’s study design and statistical analysis plan for VIITAL. [Phase III] trial… ”Returning to ABO-102, Selvaraju said:“ In our opinion, these data are very intriguing and are worth looking at to see if they can be confirmed in a larger patient cohort. From our point of view, preserving neurocognitive development in young children with MPS IIIA is likely to be the main measure of efficacy that resonates with regulators. ”In keeping with his optimistic view, Selvaraju rates ABEO as a Buy along with a $ 8 price target. Should your thesis develop, a potential twelve-month jump of ~ 264% could be on the cards. (To view Selvaraju’s track record, click here) Overall, 2 have been allocated buys and no hold or sell in the past three months. Therefore, the analyst consensus is a moderate buy. At $ 6.50, the average target price places upside potential at ~ 188%. (See stock analysis from ABEO on TipRanks) Mereo Biopharma (MREO) The second stock we’re looking at, Mereo, is another biopharmaceutical company with a focus on rare diseases. Mereo has a large and diverse portfolio, with six drug candidates in various stages of development. The company’s research programs seek treatments for solid tumor cancers, ovarian cancer, and chronic obstructive pulmonary disease, among other serious conditions. Griffin is among those who have high hopes for this health care name. Griffin’s Citadel collected 4.097 million shares in the fourth quarter, which are now worth $ 16.3 million. The biggest news for Mereo was the announcement on December 17 of a collaboration and licensing agreement with the California company Ultragenyx for further development of Setrusumab, a candidate that is being tested as a treatment for osteogenesis imperfecta, or disease of the brittle bones. This incurable condition is usually treated with lifestyle changes and exercise. However, setrusumab has been shown in phase 2b studies to cause a dose-dependent increase in bone formation in affected adults. Leerink analyst Joseph Schwartz writes about the Mereo / Ultragenyx partnership: “Although the RARE / MREO deal was unexpected, we are not surprised by the news considering that MREO has been looking for a partner and RARE has extensive experience developing and launching agents. successful bone … sight [the] “In light of these comments, Schwartz rates MREO’s stock as a Buy, and its $ 8 price target suggests that it is up 103% for a year. (To view Schwartz’s history, click here). Stocks go unnoticed, and MREO is one of them. MREO’s is the only recent analyst review of this company, and it’s decidedly positive. (Check out MREO’s stock analysis on TipRanks) To find good ideas for trading stocks of a penny with attractive valuations, visit TipRanks Best Stocks to Buy, a recently launched tool that ties together all TipRanks stock perceptions. Disclaimer: Opinions expressed in this article are solely those of prominent analysts. Content is intended to be used for informational purposes only, it is very important to do your own analysis before making any investment.