We recently started a series called “Penny Stock of the Day”. These ideas are geared for traders with an extremely high risk appetite.
Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.
Penny Stock of the Day: Nymox Pharmaceutical Corp (NASDAQ: NYMX)
Today’s penny stock pick is the biopharmaceutical company, Nymox Pharmaceutical Corp (NASDAQ: NYMX)
Nymox Pharmaceutical Corp engages in the research and development of drugs for the aging population in Canada, the United States, Europe, and internationally.
Its lead drug candidate is Fexapotide Triflutate (NX-1207), which has completed Phase III clinical trials for the treatment of benign prostatic hyperplasia, and Phase II clinical trials for low grade localized prostate cancer, as well as is in preclinical studies for hepatocellular carcinoma.
The company also develops and markets NicAlert and TobacAlert test strips that use urine or saliva to detect the use of tobacco products. In addition, it offers AlzheimAlert, a proprietary urine assay that aids physicians in the diagnosis of Alzheimer’s disease.v
Website: www.nymox.com
Latest 10-k report: (Form 20-F): https://sec.report/Document/0001640334-21-000680/
Analyst Consensus: Not covered by analysts.
Potential Catalysts / Reasons for the Hype:
- The upcoming filing date for marketing approval of Fexapotide Triflutate for benign prostatic hyperplasia (BPH). This is expected by around 15 September 2021.
- The company insiders buying the stock during the past six months.
NYMX – Insider Buying
- The company’s 44.97% of shares are held by insiders.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern Breakout: The daily chart shows that the stock was forming a falling wedge pattern for the past several weeks. These are marked as purple color lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out of the falling wedge pattern, indicating possible bullishness.
NYMX – Daily Chart
#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI and the ADX lines are above the -DI line, and the ADX line has started to move higher from below the +DI and -DI lines.
#3 Price above MA: The stock is currently above the 50-day SMA, indicating that the bulls have currently gained control.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates possible bullishness.
#5 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#6 Above Support Area: The weekly chart shows that the stock is moving higher after taking support near a long-term support area. This is marked as a green color dotted line. An upmove from this area looks like a bullish sign.
NYMX – Weekly Chart
#7 Other bullish indications: The weekly chart shows a bullish MACD, bullish stochastic, and bullish ADX and DI, as well. All these indicate bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for NYMX is above the price of $2.13. However, you can purchase half the intended quantity of shares of NYMX above the price of $1.84.
Target Prices: Our target prices are $2.80 and $3.50.
Stop Loss: To limit risk, place a stop loss at $1.28 (for entry near $1.84) and $1.70 (for entry near $2.13). Note that the stop loss is on a closing basis.
Our target potential upside is 31% to 90%.
- Entry near $1.84: For a risk of $0.56, our first target reward is $0.96, and the second target reward is $1.66. This is a nearly 1:2 and 1:3 risk-reward trade.
- Entry near $2.13: For a risk of $0.43, our first target reward is $0.67, and the second target reward is $1.37. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Potential Risks / Red Flags:
- The company has incurred operating losses since its inception. NYMX had reported a net loss of ~$13.2 million in 2019 and $11.7 million in 2020 as per the latest annual report. As of December 31, 2020, Nymox’s accumulated deficit was approximately $180.0 million. The company also has negative cash flows from operations of $10,037,453 for the year ended December 31, 2020.
NYMX – Annual Report – Consolidated Statements of Comprehensive Loss
- Despite beginning operations in 1995, the company is now only in the early stages of commercial marketing of its diagnostic products, NicAlert™ and TobacAlert™. Simply put, Nymox Pharmaceuticals has existed for decades, without bringing any product or drug to market.
- Although the company has been consistently reporting losses, the company executives are being well-compensated. Specifically, CEO Averback has been increasing his own stock-based compensation with the help of relaxed Bahamas corporate governance standards.
NYMX – Executive Compensation
- As per the company’s Q2 results, net losses were $3,990,108, or $0.05 per share, for the quarter, and $6,429,573, or $0.08 per share, for the six months ended June 30, 2021, compared to net losses of $2,940,157, or $0.04 per share, for the quarter, and $5,554,818, or $0.08 per share, for the six months ended June 30, 2020.
NYMX – Q2 Report
- The company had reported top-line failure of the two Phase 3 studies of NX-1207 for benign prostatic hyperplasia (BPH). This is expected to materially affect the Corporation’s current ability to fund its operations. Meanwhile, Sophiris Bio’s PRX302 (topsalysin) Phase 3 trial in BPH successfully met the same 12-month endpoint that NX-1207 missed, and later received positive feedback from FDA.
- NYMX has a history of broken promises, delays, and a withdrawal regarding applying for marketing approval in the US and EU.
- A class-action lawsuit was filed against NYMX wherein Nymox was accused of misleading investors regarding its proprietary drug NX-1207.
- On December 16, 2014, the Corporation was notified by the Nasdaq Listing Qualifications Department that the Corporation’s Nasdaq Capital Market requirements were currently deficient for the preceding 30 consecutive business days.
- On January 15, 2019, the company completed one private placement to an accredited investor for an amount of $5,000,000 and 2,500,000 shares were issued at $2.0 per share and 2,500,000 warrants were issued connect with it. This had resulted in share dilution.
As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!
Happy Trading!
Trades of the Day Research Team
READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.
Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.
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