The stock market is down again today. Why? Concerns stemming from last week’s Fed meeting and plenty of Fed speak this week have contributed to the latest stock market rout. But that hasn’t been the same when it comes to penny stocks. In this article, we look at a hand full of hot stocks to watch, heading higher while the broad market crash continues.
Are penny stocks immune to a stock market crash? In short, even during some of the most aggressive sell-offs, you’re sure to find a few cheap stocks to watch. One of the reasons why penny stocks are such a popular topic when things get bearish is that they move in a way that’s disconnected from the broader trends. Start-up and emerging phase companies have specific catalysts that tend to bode well for speculation-based trading.
Look at popular penny stocks today, like Lava Therapeutics (NASDAQ: LVTX). Last week the stock closed its Friday session at $2.40. This week, LVTX stock has reached highs of $5.67 during the regular session and highs of $6.10 during the pre-market session on Monday. Meanwhile, the S&P, Nasdaq, and Dow are all at or near 2022 lows. What was behind the 136%+ jump in LVTX stock? The company announced an exclusive worldwide license agreement with Seagen Inc. (NASDAQ: SGEN) to advance its LAVA-1223in treating solid tumors.
What is the next round of multi-bagger penny stocks to watch? Today we look at three companies seeing their shares trade higher while the stock market crash takes broader sectors lower. Will they be the best penny stocks to buy, or should you avoid them entirely? That’s something to weigh based on your trading strategy to weather this latest stock market volatility.
Penny Stocks To Buy [or avoid]
- Alaunos Therapeutics Inc. (NASDAQ: TCRT)
- Pulse Biosciences Inc. (NASDAQ: PLSE)
- Spero Therapeutics Inc. (NASDAQ: SPRO)
1. Alaunos Therapeutics Inc. (NASDAQ: TCRT)
Shares of Alaunos Therapeutics have pulled back with the rest of the market over the last week. But on Monday, TCRT stock deviated from the broader trend and bounced over 23% and back above its 50-day moving average. This had previously been a level of support since early June. As Alaunos stock attempts to maintain this technical level, traders look at it for other reasons.
The penny stock has continued climbing thanks to bullishness from advancements from its TCR-T cell library of targeted candidates. Last week the company announced that it would be presenting data from a Phase 1/2 trial at the CRI-ENCI-AACR International Cancer Immunotherapy Conference this week.
Alaunos will discuss the data on Friday and explain how the TCR-T cell therapy had a manageable safety profile with no dose-limiting toxicities observed. The first patient dosed was diagnosed with non-small cell lung cancer and, following initial treatment, was confirmed to have reached a partial response.
Since the presentation begins before the market opens on September 30th, it could be an interesting event to note if TCRT stock is on your watch list this week. In addition, with a 16.20% short float, according to Fintel data, this may have also found a place on the list of short squeeze stocks to watch heading into October.
2. Pulse Biosciences Inc. (NASDAQ: PLSE)
Another one of the biotech penny stocks to watch early this week is Pulse Biosciences. Shares of PLSE stock surged on Monday following news that its sebaceous hyperplasia platform, CellFX System, received FDA 501(k) clearance.
“We are pleased with the continued advancement of the CellFX System and its capabilities to enhance its value proposition for patients, clinicians, and any potential commercial partner. These clearances provide further validation of the system’s strong safety and effectiveness profile,” said Pulse CEO Kevin Danahy.
Danahy recently became CEO of the company, succeeding Darrin Uecker, who stepped into the Cheif Technology role. The shuffle was done in response to the new direction that Pulse will take in focusing on advancing its core NPS technology in the cardiac and oncology sectors. What could also help the company is last week’s loan agreement with Executive Chairman Robert Duggan. He loaned $65 million to Pulse.
With a new strategic focus, a multi-million dollar loan facility from its Executive Chairman, and the latest FDA clearance, PLSE stock has gained momentum in the stock market today. It will be interesting to see if that continues throughout the week.
3. Spero Therapeutics Inc. (NASDAQ: SPRO)
The bullish trend in biotech penny stocks continues with Spero Therapeutics. Shares popped last week after GSK PLC (NYSE: GSK) inked an exclusive license agreement for Spero’s tebipenem HBr platform for treating complicated urinary tract infections. A new Phase 3 study is expected to begin next year after solid feedback from the FDA.
GSK will get an exclusive license to develop and commercialize the treatment in all territories except Japan. Spero will handle the execution and costs of follow-up of the Phase 3 trial. Spero has the potential to receive milestone payments up to $225 million based on net sales targets, commercial milestone payments on delivery of a phase 3 program, royalties on sales over $1 billion, in addition to an upfront payment of $66 million. Meanwhile, GSK also committed to purchasing $9 million in SPRO stock.
The news sparked interest from retail traders and the analyst community as SPRO surged. Evercore ISI upgraded Spero to Outperform and raised its price target to $8. This week HC Wainwright maintained its Buy on Spero and bumped up its $6 target to $7.
Some other things traders could be looking for include pending milestone payments from other candidates. In July 2022, Spero achieved an SPR206 regulatory milestone under its license agreement with Pfizer (NYSE: PFE). It’s supposed to result in a $5 million milestone payment this quarter. It’s also finalizing a Phase 2 study of its SPR720 platform in treating nontuberculous mycobacterial-pulmonary disease. The trial is expected to begin next quarter with interim data in mid-2023. If SPRO stock is on your list of penny stocks to watch, these may be something to keep in mind in addition to other recent developments.