We recently started a series called “Penny Stock of the Day”. These ideas are geared towards 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: Antares Pharma Inc. (NASDAQ: ATRS)
Today’s penny stock pick is the specialty pharmaceutical company, Antares Pharma Inc. (NASDAQ: ATRS).
Antares Pharma Inc. focuses primarily on the development and commercialization of pharmaceutical products and technologies that address patient needs in targeted therapeutic areas. It develops, manufactures, and commercializes novel therapeutic products using its drug delivery systems.
The company’s injection products include XYOSTED for subcutaneous administration of testosterone replacement therapy in adult males; OTREXUP a subcutaneous methotrexate injection indicated for adults with severe active rheumatoid arthritis, children with active polyarticular juvenile idiopathic arthritis, and adults with severe recalcitrant psoriasis; and NOCDURNA sublingual tablets indicated for the treatment of nocturia due to nocturnal polyuria in adults who awaken at least two times per night to urinate.
Its injection products also comprise generic Epinephrine Injection USP products indicated for emergency treatment of severe allergic reactions, including anaphylaxis in adults and certain pediatric patients; Sumatriptan Injection USP indicated for the acute treatment of migraine headaches and cluster headache in adults; and Makena subcutaneous auto-injector drug-device combination product indicated to reduce the risk of preterm birth in women, as well as Teriparatide injection used for the treatment of osteoporosis in postmenopausal women and men at increased risk of fracture, and glucocorticoid induced osteoporosis in men and women.
In addition, the company develops disposable pen injectors for diabetes and osteoporosis; QuickShot auto-injectors; TLANDO to treat deficiency or absence of endogenous testosterone in adult males; and drug/device products for urologic oncology, immunology, and endocrinology. The company has strategic alliances and partnerships with Pfizer Inc., Idorsia Pharmaceuticals Ltd, Teva Pharmaceutical Industries, Ltd, and AMAG.
Website: www.antarespharma.com
Latest 10-k report: https://sec.report/Document/0001016169-22-000028/
Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for ATRS in the last 3 months, the stock has an average price target of $5.00, which is nearly 21% upside from current levels.
Source: TipRanks.com
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- Rumors of FDA approval of Tlando (testosterone undecanoate), an oral treatment for testosterone replacement therapy.
- The company reported a strong Q4, with Non-GAAP EPS of $0.02 and revenue of $48.73M
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Symmetrical Triangle Pattern Breakout: The daily chart shows that the stock has currently broken out a symmetrical triangle pattern, which is marked as orange color lines. A symmetrical triangle pattern represents a period of consolidation before the price breaks out. This is typically formed when there is indecision in the price movements and uncertainty among the buyers and sellers. Once a breakout from the upper trend line occurs, it usually signifies the start of a new bullish trend.
ATRS – Daily Chart
#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.
#3 Price above MAs: The stock is currently above its 50-day and 200-day SMA, indicating that the bulls have currently gained control.
#4 Bullish Stoch: The %K line of the stochastic is above the %D line, indicating 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 currently trading above a support area, which is marked as a pink color dotted line. This is a possible bullish indication.
ATRS – Weekly Chart
#7 MACD above Signal Line: In the weekly chart as well, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for ATRS is above the price of $4.20.
Target Prices: Our first target is $5.20. If it closes above that level, the second target price is $7.70.
Stop Loss: To limit risk, place a stop loss at $3.60. Note that the stop loss is on a closing basis.
Our target potential upside is 24% to 83%.
For a risk of $0.60, our first target reward is $1.00, and the second target reward is $3.50. This is a nearly 1:2 and 1:6 risk-reward trade.
In other words, this trade offers 2x to 6x more potential upside than downside.
Potential Risks / Red Flags:
- The company has a history of net losses. ATRS had incurred net losses of $2.0 million for the year ended December 31, 2019, and has an accumulated deficit as of December 31, 2021, of $176.3 million.
ATRS – Consolidated Statements of Operations
- Hedge Funds Decreased Holdings by 180.0K Shares Last Quarter.
Hedge Funds | Source: TipRanks.com
- Even when the company was posting losses, the executives were being paid millions in compensation.
ATRS – Executive Compensation
- The company has ongoing litigations like Randy Smith, Individually and on Behalf of All Others Similarly Situated v. Antares Pharma, Inc., Robert F. Apple and Fred M. Powell; Chiru Mackert, derivatively on behalf of Antares Pharma, Inc., v. Robert F. Apple, et al.; and Robert Clark, Derivatively on Behalf of Antares Pharma, Inc. v. Robert F. Apple, et al.
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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