If the first rule in the film “Fight Club” is to not talk about fight club, then the same rule applies to penny stocks with potential: you do not talk about these penny stocks with upside. To clarify, the ideas present tremendous risks. You could see massive rewards but if we’re being completely honest, you’re likelier to see devastating losses.
It’s a good time to share with you all what my football coach once told us. When some of my teammates complained about certain protective gear slowing them down, the coach implored us to think about our biological future if you get my drift. And that’s kinda what I’m saying here. Go ahead and play football (a beautiful but dangerous sport).
But do wear your protective equipment. Regarding penny stocks with potential, we’re talking about never betting more than you can afford to lose.
Now, the positive here is that I’m not discussing purely garbage ideas. Rather, these underlying enterprises enjoy surprisingly strong analyst support. So with that, below are penny stocks with upside projected to 300% within the next 12 months.
An oncology specialist, Verastem (NASDAQ:VSTM) focuses on developing medicines to treat certain cancers. While cancer research and drug development has advanced dramatically over the years, several unmet needs exist. For example, some patients may lack any treatment option. And for those that do, side effects and other complications may render available therapeutics useless. Subsequently, Verastem seeks to address these unmet needs.
That’s a noble goal. Unfortunately, it has trended from an enterprise with a respectable market value to one that’s seemingly in danger of falling off the map. Presently, the company carries a market capitalization of less than $173 million. So, while its shares price of nearly $7 seems not to quality as one of the penny stocks with potential, don’t let that fool you: it’s a super-risky play.
At the same time, it genuinely ranks among penny stocks with upside. According to Fintel, VSTM’s short interest ratio stands at 10.15 days to cover. That means under current average trading volume, it would take bears more than 10 days to cover their short position. Also, analysts rate VSTM a unanimous strong buy with a $27.92 average price target, implying 305% upside.
EyePoint Pharmaceuticals (EYPT)
Based in Watertown, Massachusetts, EyePoint Pharmaceuticals (NASDAQ:EYPT) specializes in the application of microelectromechanical systems and nanotechnology to drug delivery. As its name suggests, the company focuses on therapeutics to improve outcomes for patients with serious retinal diseases. Its drug pipeline includes proposed therapeutics for conditions like wet age-related macular degeneration (AMD).
Since the start of the year, EYPT gained over 71% of equity value. That might seem to disqualify shares ass one of the penny stocks with potential. However, in the trailing half-year period, this performance drops to less than 5% up. It also cratered from its 52-week closing high. As well, the company’s market capitalization of less than $221 million demonstrates the high risks involved.
Still, just like Verastem shares above, EYPT features a short interest ratio of 10 days to cover. In addition, the short interest stands at a lofty 29% of its float. According to Fintel, it ranks number 122 among the most shorted securities. That might be a risk to bears, though, because analysts peg EYPT a unanimous strong buy with a $27.50 target. Translation? We’re talking 340% upside potential.
Syros Pharmaceuticals (SYRS)
Yet another biopharmaceutical enterprise with the possibility of delivering game-changing therapeutics, Syros Pharmaceuticals (NASDAQ:SYRS) specializes in leveraging gene expression. As its website points out, the wrong genes being expressed at the wrong time or in the wrong amounts can lead to disease. However, Syros identified cancer patients with aberrant gene expression that can be targeted with new therapies.
It’s one of the more promising ideas among speculative penny stocks with potential. However, investors aren’t exactly confident about the underlying enterprise. Since the beginning of the year, SYRS dropped more than 22% of equity value. It’s also a risking classification as a nano-cap play with a market value of only $58 million. Drop $8 million and it becomes a nano cap.
Naturally, bears feel relatively confident in shorting SYRS but that could change. Right now, it takes roughly eight days to cover all shorts based on average trading volume. Also, Fintel identifies SYRS as one of the top 500 most-shorted securities, heightening risk for the pessimists.
Finally, analysts rate SYRS a unanimous strong buy with a $12.33 price target, projecting 348% growth. That easily makes it one of the penny stocks with upside potential.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.