Penny stocks are the new options. A great options play might return 50% or 100% on a good day, or even 500% on a great day. Then again, your trade could go bust and you could lose all of the money you put in. Well the same is true of the seven biotech and medical equipment penny stocks I have for you today.
Investing in these penny stocks is just like trading options. They all trade for less than a couple bucks, and they have the potential to deliver life-changing profits. They could easily spike big, depending on news and performance, and be 5-, 10- or even 20-baggers. Or they could blow up and be next to worthless. But, for as cheap as you can pick them up, it's definitely worth considering.
Penny Stock #1: Cerus Corp.
Cerus Corp. (CERS) is one penny stock you have to own. It is a pioneer in something called "pathogen inactivation"―a technology that cleans blood, making blood banks almost completely indifferent to the health of donors. It's the perfect system in the age of AIDS, bird flu and other infectious disease. Cerus' INTERCEPT Blood System is currently sold in 18 countries, and a potential major catalyst is an expedited approval process in the United States.
The stock is trading around $1.30―down from nearly $8 about a year ago―and could very well be back around $8 in a couple of years.
Risk: Moderately speculative.
The stock ran earlier this week on pandemic flu fears, as the INTERCEPT Blood System has proven it can clean HN51-infected blood. Michael warns investors to be careful, saying this run-up could reverse itself in the short term.
Penny Stock #2: Compugen
Compugen (CGEN) is creating what are called "biomarkers" to aid in the diagnosis and treatment of a wide range of illnesses and diseases. It counts many Big Pharma companies as clients and is very well-respected within the biotech and drug industries. The company may need cash this year, hence the stock price, but given its partners, it should be able to raise it.
Currently trading for less than the cost of a value meal, this could be a five- to 10-bagger. I expect it to go to $3-$6―but over time, not a one-shot pop. Bottom line: A company with a great future at a very cheap price.
Risk: Speculative.
Penny Stock #3: Candela Corp.
Candela Corp. (CLZR) sells equipment to a segment hit hard by the recession―cosmetic procedures. Candela makes light- and laser-based devices to remove hair, fix dermatological anomalies, and make everyone look like sweetness and light. The stock was crushed as revenue and profits fell, but it should have enough cash to get through this recession―even in a crowded market.
Currently trading for less than $1, the business has stabilized. And if it stays that way and goes into the black, the stock should be a steady climb to $4-$5.
Risk: Speculative.
Penny Stock #4: Curis
Curis (CRIS) is a development-stage biotech start-up that focuses on cancer treatments with the mother of all partners―Roche/Genentech. The company currently has several trials under way. And one treatment is looking so promising in its mid-stage trial―the second phase in what is normally a three-phase process―that it's expected the results will be strong enough to go right to the FDA for approval without a Phase III trial. CRIS may need cash, but with Roche as a partner, this should not be a problem.
Currently trading around $1.20, CRIS would have been a $10 stock two years ago. One positive trial outcome and you could be looking at $11-$23 stock. With an approval, the stock could go to $22-$43.
Risk: Highly speculative.
Penny Stock #5: Novelos Therapeutics
Cancer treatment company Novelos Therapeutics (NVLT) is a development-stage outfit in clinical trials for adjuncts that boost the effectiveness of existing chemotherapies. It just raised $10 million, has a big partner to commercialize its leading compound in Europe and Asia, and is in late-stage trials.
Trading at 54 cents (wow), with good trial results and an approval it could go to $10.
Risk: Highly speculative.
Penny Stock #6: Cell Genesys
Cell Genesys (CEGE) is a cancer treatment biotech outfit best known for its GVAX immunotherapy for prostate cancer, which is similar to recent high-flier Dendreon's (DNDN) Provenge. The stock soared on Dendreon's positive news―to all of 62 cents! Cell Genesys cancelled two trials for GVAX last year, but the failed treatment may not have been such a failure after all, even though no new trials are planned.
Here are CEGE's stats: $57 million market cap; $86 million in cash as of year end 2008; 21 employees; and a wealth of intellectual property. This stock is as speculative as it gets. Plus, it has been on a run recently. But if Dendreon continues to rise or is acquired, CEGE might get taken out as well. And this 67-cent stock could be $1.50-$3.
Risk: Highly speculative.
Penny Stock #7: Pressure BioSciences
Pressure BioSciences (PBIO) is an itty-bitty company that makes the gear used in development laboratories to rip apart cells and proteins. It is a play on the overall growth in research in proteins and other cellular components, not a specific treatment pathway. It is slowly growing its business, system sale by system sale. This stock is so cheap because the company is in a race to break even with about one year (probably less) of cash on hand.
Trading around $1.20, the stock could see a slow and steady climb―if the company gets some cash―that pushes it to $5-$7.
Risk: Highly speculative.
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