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: Agenus Inc. (NASDAQ: AGEN)
Today’s penny stock pick is the clinical-stage immuno-oncology company, Agenus Inc. (NASDAQ: AGEN).
Agenus Inc. discovers and develops immuno-oncology products in the United States and internationally. The company offers Retrocyte Display, an antibody expression platform for the identification of fully human and humanized monoclonal antibodies; and display technologies.
It develops vaccine programs comprising Prophage vaccine candidate; AutoSynVax, a synthetic neo-antigen; PhosPhoSynVax, a vaccine candidate to treat tumor; and QS-21 Stimulon adjuvant, a saponin-based vaccine adjuvant.
The company also develops Balstilimab, an anti-PD-1 antagonist that is in Phase II clinical trial to treat second line cervical cancer; AGEN1181, an anti-CTLA-4 monospecific antibody that is in Phase 1/2 clinical trial for dose escalation study; AGEN2373, an anti-CD137 monospecific antibody that is in Phase 1 clinical trial; AGEN1223, a novel bispecific antibody to deplete regulatory T cells, which is in a Phase 1 clinical trial; AGEN-1423, a tumor microenvironment conditioning anti-CD73/TGFÃ TRAP bi-functional antibody that has completed Phase 1 clinical trial; AGEN1777, an anti-TIGIT bispecific antibodies; and AGEN1327, an anti-TIGIT monospecific antibody.
In addition, it develops INCAGN1876, an anti-GITR monospecific antibody; INCAGN1949, an anti-OX40 monospecific antibody; INCAGN2390, an anti-TIM-3 monospecific antibody; INCAGN2385, an anti-LAG-3 monospecific antibody; and MK-4830, a monospecific antibody targeting ILT4, as well as AGENT 797, an iNKT cells that is in Phase 1 clinical trial for the treatment of COVID-19-related pneumonia; and in preclinical stage to treat multiple myeloma/B cell malignancies and solid tumors.
The company has collaborations with Incyte Corporation, Merck Sharpe & Dohme, Recepta Biopharma SA, and Gilead Sciences, Inc.
Website: www.agenusbio.com
Latest 10-k report: https://sec.report/Document/0001564590-21-013619/
Analyst Consensus: As per TipRanks Analytics, based on 3 Wall Street analysts offering 12-month price targets for AGEN in the last 3 months, the stock has an average price target of $12.00, which is nearly 360% upside from current levels.
Source: TipRanks.com
Analyst Forecasts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- The company showcased encouraging data from its second-generation anti-CTLA-4 asset, AGEN1181.
- Hedge Funds Increased Holdings by 263.8K Shares Last Quarter.
Hedge Funds
Source: TipRanks.com
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern: The daily chart shows that the stock has been forming a falling wedge pattern for the past several months. These are marked as purple color lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock currently looks poised for a breakout from the falling wedge pattern. Once the stock breaks out of the falling wedge pattern, it could move higher.
AGEN – Daily Chart
#2 Oversold RSI: The RSI is currently near oversold levels and has started moving higher, indicating possible bullishness.
#3 CCI moving higher: The daily chart shows that the CCI has started moving higher after reaching below -200. This is a bullish sign.
#4 Downtrend Broken: The weekly chart shows that the stock has currently broken out of a downtrend, which is marked as a pink color line. This is a possible bullish sign.
AGEN – Weekly Chart
#5 Bullish Stoch: The weekly chart shows that the %K line is above the %D line and is also moving higher from oversold levels. This is a possible bullish sign.
#6 Oversold RSI: In the weekly chart as well, the RSI is moving higher from oversold levels, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for AGEN is above the price of $3.20.
Target Prices: Our first target price is $4.10. If it closes above that level, the second target price is $5.20.
Stop Loss: To limit risk, place a stop loss at $2.60. Note that the stop loss is on a closing basis.
Our target potential upside is 28% to 63%.
For a risk of $0.60, our first target reward is $0.90, and the second target reward is $2.00. 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 had a history of net losses since its inception. AGEN’s net losses for the years ended December 31, 2020, 2019, and 2018, were $182.9 million, $111.6 million, and $162.0 million, respectively.
AGEN – Net Loss
- The company was formerly known as Antigenics Inc. and changed its name to Agenus Inc. in January 2011.
- Agenus’s Biologics License Application for balstilimab as a treatment for second-line cervical cancer was set for accelerated approval based on response rate data. However, after the FDA approved a similar drug, Keytruda from Merck, for similar patients based on positive long-term survival data, the application had to be withdrawn at the suggestion of the Food and Drug Administration. This is a major setback as the company’s business was highly dependent on the success of its balstilimab and zalifrelimab programs.
- Despite being a loss-making company, the executives are being paid millions in compensation.
AGEN – Executive Compensation
- The company’s obligations to the holders of its promissory notes could materially and adversely affect AGEN’s liquidity. In February 2015, the company had issued senior subordinated promissory notes in the aggregate principal amount of $14.0 million, of which $13.0 million remains outstanding, with an annual interest of 8%.
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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