Three Health care Penny Stocks to Watch
Health
care industry shows a massive growth in U.S and U.K. It's one of the
huge capital industries which have a huge sum of investments.
Technology moved the health care industry to advanced levels.
The
health care industry can be precarious for stocks of large companies,
much less penny stocks. Nevertheless, smaller companies that capture a
niche can grow much faster than large caps. That higher reward potential
comes with higher risk. Of course, small-cap health care companies can
be nudged out of the market by big competitors, and they can simply
become unable to service debt when products and services don't sell
quickly enough. All of this makes the small-cap health care stalwarts on
this list more attractive.
None
of these are new companies they have made progress in developing
products and finding the marketing outlets that are needed to sustain
them. Because of the higher risk, investors should continuously perform
due diligence. It is important to watch for product failures, closing
markets or excessive competition moving in.
Before we look at the top three stocks, it's important for investors to know exactly what makes these a good option !!
We must know the following items:
What's in the pipeline?
This is the meat and potatoes for any company. You should really be
looking at what's in a company's Phase II programs. If there are
multiple items in the pipeline at various stages, even better, because
there's a good chance one of them may make it to market.
Partnerships:
Are there any big names that your company is partnering up with to help
bring its drug(s) to market? Big corporations can help bring value to
smaller companies, especially when it's time for production and
distribution.
Financial: Remember to take a look at how the company is performing. Does the company have enough cash on hand to meet its obligations?
What they promise to treat:
While viable cancer treatment can be very good for a company, make sure
the company you're invested in has a novel, unique drug or treatment.
After all, there are a lot of companies looking to market the newest
cancer treatment.
Curis
Curis
is engaged in biotechnology with a focus on developing drugs that treat
cancers. It does significant amounts of research and collaborates with
other drug makers in testing and developing drugs. Therefore, it must
put drugs through trials and obtain approvals, which means that the
stock can fluctuate depending on the outcome for any given drug. Profits
have been less than robust while the company focuses on research.
However, management says it is now ready to bring many drugs to market
that will produce profits going forward.
The
company already has one drug with FDA approval and was commercialized
by Genentech and Roche. Erivedge is used in the treatment of basal cell
carcinoma and is available to patients in the U.S., the European Union,
and several other countries. Its Fimepinostat drug has also been
fast-tracked by the FDA and is currently in the clinical trial stage.
The company has four other drugs, two of which are in the clinical
stage, while the others are in the pre-clinical phase.
Volatility
for this stock is high, but that can be a good thing for investors who
want to build a position by buying at support levels. The 50-day moving
average is currently below the 200-day moving average, so cautious
investors may want to wait until the 50-day line is back on top before
buying into this stock. The company has negative operating income, as
increasing research and development expenditures have negatively
affected the bottom line. Investing in this stock must be based on
whether investors see promise in the company's drug pipeline, so it is
important for potential investors to track the progress of various
treatments developed by the company through pre-clinical and clinical
trial stages.
Curis
announced plans to restructure after the third quarter of 2018, saying
it would lay off staff in order to concentrate on cutting its costs and
pipeline. Revenue increased in the quarter, while it reported a smaller
loss, compared to the same quarter of 2017. Management said it also
planned to focus on three of its drugs going into 2019 which are
expected to have efficacy data from their clinical development.
- Average Volume: 743,550
- Market Cap: $38.16 million
China Pharma Holdings
China Pharma Holdings develops and markets a broad range of products in China, targeting hospitals and retailers. The drugs are focused on cardiovascular applications, brain diseases, and infectious diseases. When the Chinese company reports results, it tends to have the majority of its assets as receivables, so potential investors should keep in mind that many companies do not collect all of their receivables.The stock dropped dramatically in May 2017, rebounded, then pulled back again. It spent the remainder of 2017 in a sideways pattern, forming a new base. In the first trading days of 2018, China Pharma shares broke out sharply, skyrocketing from under 20 cents per share to nearly 80 cents before declining throughout the year to current prices of around 27 cents.
Investors who buy this stock are hoping that share price momentum will pick up again with the release of effective and popular drugs. As with all penny drug stocks, buyers of China Pharma Holdings shares must be willing to wait out long periods of volatility while hoping for profitability to return. It is also important to remember that China monitors and controls companies closely, so any investor in this stock is obtaining exposure to the geopolitical influences that could affect its price.
One of the most important things investors need to consider is whether the company can meet its operating expenses, funding and financial obligations within a (short) period of time with whatever cash it has in its reserves. The company's cash and cash equivalents dropped to $0.7 million for the nine months ending Sept. 30, 2018, compared to $1.12 million for the same period in the previous year.
The company also moved into the health product market in November 2018. It launched its Noni Enzyme product (a small fruit used in traditional medicine) called Ararato. The product is targeted at the aging Chinese population and the country's growing middle class who are looking for alternative treatments.
- Average Volume: 686,441
- Market Cap: $12.64 million
Novavax
Shares of this vaccine developer could give your portfolio a shot in the
arm over the final months of this year. Novavax develops vaccines for
administration across life stages — from infants to older adults —
focusing on the prevention of diseases ranging from the seasonal flu to
the Ebola and Zika viruses. This company also brings some longevity to
the table, having been founded in 1987.
Novavax stock plunged in December 2017 when the markets reacted poorly
to an update on one of the company's influenza vaccines. The stock price
suffered additional setbacks in February 2018 along with the broader
markets and again in June in response to concerns over the effects of
the trade conflict with China. However, Novavax still has promising
products in the pipeline, including a vaccine for the respiratory
syncytial virus which causes significant hospitalizations and deaths
among children around the world. The hurdles that remain for the
clinical approval of its products make Novavax a risky stock, but
bringing a successful vaccine to market could imply significant profits.
The company came one step closer to bringing its NanoFlu vaccine to
market when it announced positive results for Phase II of its clinical
trials in older adults in January 2019. Results showed the vaccine was
well tolerated and 50% more effective than the current market leader
vaccine. The company said it planned to meet with FDA officials to
discuss its Phase III design.
- Average Volume: 27,646,275
- Market Cap: $782.31 million
Penny health
care stocks are high risk. Trials of drugs can produce negative
results, and the market may not readily accept a new drug. On the other
hand, a successful drug can cause a penny stock to soar and give
investors profits they would not expect from more expensive stocks.
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