U.S. equities are pushing higher on Friday thanks to a strong non-farm payroll report, the passage of a short-term government funding bill preventing a shutdown tonight and the seasonal tailwinds the bulls enjoy this time of year.
One sector group in particular looks ready to profit from the upward drift are the biotech stocks, which have been on the decline in recent weeks as investors focus on Big Tech stocks and more recently on high-tax issues most likely to benefit from the GOP’s corporate tax cut plans.
That’s changing now, with the iShares Nasdaq Biotech (NASDAQ:IBB) looking ready to rise up and out of a three-month holding period taking the fight back toward its 50-day moving average.
This sets up a possible return to the highs not seen since October. If so, here are five cheap biotech stocks ready to surge:
Biotech Stocks to Buy: Acadia Pharmaceuticals (ACAD)
Shares of Acadia Pharmacueticals Inc. (NASDAQ:ACAD) are rising off of support from a multi-year pennant pattern, setting up another run at overhead resistance near the $40-a-share level.
That would be worth a 33%-plus gain from here. In a recent note to clients, Needham analysts highlighted potential sales momentum building for the company.
The company will next report results on Feb. 28. Analysts are looking for a loss of 57 cents per share on revenues of $45 million. When the company last reported Nov. 7, a loss of 53 cents per share beat estimates by 10 cents on a 5.7x rise in revenues from the previous year.
Biotech Stocks to Buy: ImmunoGen (IMGN)
ImmunoGen, Inc. (NASDAQ:IMGN) shares are creeping higher, rising on support at its 20-day moving average capping a multi-month consolidation from the massive rise off of the lows seen last December.
Watch for a move back to the highs seen in late August, which would be worth a gain of 40% from here.
The company will next report results on Feb. 2 before the bell. Analysts are looking for a loss of 14 cents per share on revenues of $39.6 million.
When the company last reported on Nov. 3, a loss of 61 cents per share missed estimates by 40 cents on a 10.4% Riss in revenues
Biotech Stocks to Buy: Viking Therapeutics (VKTX)
Viking Therapeutics Inc (NASDAQ:VKTX) shares have more than quadrupled from their summertime low, rising above the $4-a-share threshold returning to levels not seen since January 2016. Just the past month has seen a 33%-plus gain.
The gain hasn’t been affected by a float of more than five million shares in a secondary offering this week, priced at $2.50 per share.
Positive analyst coverage has helped, with Maxim Group raising their price target to $8 on positive results from a hip fracture study. HC Wainwright has a $7 target.
Biotech Stocks to Buy: Alexion Pharmaceuticals (ALXN)
Alexion Pharmaceuticals, Inc. (NASDAQ:ALXN) shares are rising off of a three-month consolidation range setting up a run at its 50- and 200-day moving averages.
Shares are down from a peak of $210 set back in 2015 but look ready for a rise in efforts by activist investors to shake up the management team and turn its fortunes around. M&A chatters could bolster prices as well.
The company will next report results on Feb. 15 before the bell. Analysts are looking for earnings of $1.27 per share on revenues of $878 million. When the company last reported on Oct. 26, earnings of $1.44 per share beat estimates by 12 cents on a 7.5% rise in revenues.
Biotech Stocks to Buy: Immunomedics (IMMU)
Merely a return to its October high would be worth a gain of 16% from current levels.
The company will next report results on Feb. 8 after the close. Analysts are looking for a loss of 12 cents per share on revenues of $4.7 million.
When the company last reported on Nov. 9, a loss of 91 cents per share missed estimates by 91 cents on a 6.8% drop in revenues.