Penny Stocks and Preparing for 2024

As we enter 2024, investors wonder if it will be another volatile year for stocks. Maybe we see some stabilization after 2023’s ups and downs; maybe not. For those interested in penny stocks, the high-risk but potentially high-reward nature of these cheap stocks continues to hold appeal. That’s even during uncertain times.

The number one rule when it comes to penny stocks is doing thorough research. Penny stocks are cheap for a reason. They tend to be offered by smaller companies facing financial distress or startups still working to prove viability and profitability.

Before making any investment decisions, dig deeper. Look into financial filings, company leadership, products and services offered, market opportunities, and analyst views. Get to know all operational and financial details possible around leadership experience, debt levels, cash burn rates, intellectual property, etc. Understand why shares are priced so low and the possibilities that may drive higher long-term growth.

Mitigating Overall Risks With Penny Stocks

While penny stocks themselves carry plenty of inherent risk, you should still look for ways to reduce other potential pitfalls in 2024. Consider setting stop-loss orders to help limit downside damage if a penny stock craters unexpectedly.

Stop losses allow you to finalize losses at a defined price threshold before losses widen beyond what you had hoped. Meanwhile, ensure you have accessible cash reserves set aside for opportunities. This allows you to average down on promising investments when short-term price drops hit instead of panicking.

Avoid overleveraging yourself with debt, as that only amplifies risks beyond penny stocks alone. Define the portion of your overall portfolio you are comfortable dedicating to these cheap, speculative stocks while allocating the rest to safer assets. This article looks at a few penny stocks to watch before 2024. Winter might be bringing a chill; these cheap stocks seem to be heating up at the end of the year.

Penny Stocks To Watch

Oncology Institute Inc. (NASDAQ: TOI)

The Oncology Institute specializes in value-based cancer care. They offer advanced treatments and services in community settings. It’s known for its comprehensive oncology services. The company recently expanded its specialty medication business by opening a pharmacy in California.

This pharmacy, approved by the California State Board of Pharmacy, will serve MediCal patients and others. The new pharmacy supplements TOI’s existing medication dispensaries, enhancing its capability to manage oral and injectable cancer medications.

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Headlines come a few weeks after the company reported earnings. Its financial results for Q3 2023, showed significant growth. Oncology Institus also reaffirmed its full-year 2023 guidance. The report highlights increased revenue and expansion in services. TOI’s focus on value-based care contributes to its growth strategy.

Meanwhile, insiders are picking up shares of TOI stock. CFO Mihir Shah is the most recent to buy before 2024. The Chief Financial Officers snagged 100,000 shares at an average price of $1.27 this month.

Delcath Systems Inc. (NASDAQ: DCTH)

Delcath Systems is a specialized pharmaceutical and medical device company. It focuses on oncology, specifically liver cancer treatments. They are known for their proprietary Chemosat Hepatic Delivery System and have gained attention after recent headlines.

Delcath Systems announced the publication of a retrospective analysis in the “Journal Melanoma Research.” The study evaluated the Quality of Life in patients with metastatic uveal melanoma treated with Delcath’s Chemosat System. The findings support the system’s tolerability, indicating no significant negative impact on patients’ Quality of Life.

“The publication of these results by independent investigators supports the rationale for the percutaneous hepatic perfusion procedure, whether utilizing melphalan delivered by Delcath’s CE marked Chemosat or the FDA approved HEPZATO KIT, as an important treatment option for patients with liver-dominant uveal melanoma,” said Dr. Vojo Vukovic, Delcath’s Chief Medical Officer. “We look forward to making this treatment option available to patients in the US in January 2024.”

Vukovic isn’t only in the spotlight for comments on this milestone. The CMO has also done some shopping in the market for DCTH stock. With the purchase of 40,000 shares at an average price of $3, Vukovic has grabbed another $120,000 worth of DCTH shares.

Wave Life Sciences Ltd. (NASDAQ: WVE)

Insider trading before the end of the year is generally an interesting proposition. In some cases, the market presumes a bullish outlook from company leadership. On the other hand, insiders aren’t only limited to leadership and can include large funds or “10% owners,” which may have plans of their own.

In the case of Wave Life Sciences, Ra Capital Managemen, a 10% owner, snagged 1 million shares of WVE stock this month. The firm bought at $5 per share as part of a public offering. While this isn’t an open-market purchase, it was a $5 million investment that adds to an already large position of more than 18 million shares before the latest purchase.

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Wave Life Sciences is a clinical-stage genetic medicine company. They focus on developing RNA-based therapeutics for serious, life-threatening diseases. The company recently announced that it has begun Phase 2 of the FORWARD-53 trial for Duchenne muscular dystrophy (DMD) treatment. This trial evaluates WVE-N531, targeting exon 53 skipping in boys with DMD. The initiation of dosing marks a significant milestone in the development of this potential treatment.

The initiation of Phase 2 could be seen positively by the market, reflecting progress in Wave Life Sciences’ drug development pipeline. However, it will be only a source of speculation until the final results come out. In the meantime, analysts are starting to weigh in. This week Leerink Partners upgraded WVE stock to Outperform. The firm also announced a $12 WVE stock forecast target price.

Nkarta Inc. (NASDAQ: NKTX)

Nkarta, Inc. is a clinical-stage biopharmaceutical company. They specialize in developing engineered natural killer (NK) cell therapies. Their focus includes allogeneic, off-the-shelf NK cell therapy candidates, derived from healthy donors​​. The company announced a poster presentation at the 2023 American Society of Hematology Annual Meeting. This featured follow-up data from a Phase 1 clinical trial of NKX101 in patients with relapsed or refractory acute myeloid leukemia (r/r AML).

In June 2023, patients receiving NKX101 after a lymphodepletion regimen showed promising results. Four out of six patients achieved complete remission. At a 4-month follow-up, three remained in remission. Notably, no severe side effects like cytokine release syndrome were observed.

Dr. David R. Shook, Chief Medical Officer, highlighted the significance of these results. He emphasized the need for treatments for r/r AML patients lacking targetable mutations. The study’s objective is to aid this high-need patient population. Nkarta intends to update on the NKX101 Flu/Ara-C LD cohort in the first half of 2024. This will include preliminary safety and response data from an additional 12 to 20 patients.

This month, analysts are updating ratings on NKTX stock. Needham is the most recent with its reiterated Buy rating. The firm also maintains a $15 NKTX stock forecast price target. Based on recent levels, that target sits 337% higher.

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