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In our recent analysis, we explored the 11 Most Promising Penny Stocks According to Analysts, focusing specifically on Cogent Biosciences, Inc. (NASDAQ:COGT) and its standing among other notable penny stocks.
During a segment on CNBC’s ‘Closing Bell’ on April 15, market analysts Dan Greenhaus from Solus and Brian Levitt from Invesco discussed current economic conditions, particularly market volatility and tariff implications. Greenhaus suggested that the market has already integrated many adverse forecasts into current pricing. He recognized the caution that investors should maintain while noting a lack of extreme concern. Recent developments, such as exemptions on auto part tariffs and the postponement of tariff implementation, indicated to him that the Trump administration is heeding the advice of its advisors and avoiding drastic measures. This response, he claims, has contributed to a recovery observed in stock prices. However, he concurred with Morgan Stanley’s assessment that the administration’s inconsistency may lead to unpredictable market behavior, with investors often leaning towards pessimistic outcomes rather than optimistic ones. Greenhaus cautioned against overly dire narratives regarding potential price surges that have dominated media discussions.
Building on Greenhaus’s commentary, Levitt acknowledged the outstanding uncertainties tied to the administration’s direction, which he believes disrupts traditional policy predictability. He drew parallels to the market dynamics of 2018 when a sharp 20% decline was followed by a swift recovery due to trade negotiations and Federal Reserve interventions. He indicated that while current S&P 500 valuations do not reflect recessionary conditions, unresolved uncertainties could expose the market to risks. Despite the potential for short-term volatility demonstrated by business investment and consumer confidence metrics, both analysts indicated that periods of heightened uncertainty may also reveal lucrative long-term investment opportunities. Greenhaus noted that investors could capitalize on rising risk premiums if confronted with sudden shifts in tariff policies.
We utilized the Finviz stock screener to curate a selection of penny stocks trading below $5, ranked by their projected upside potential, which is at least 40%. This list includes hedge fund sentiment data from Q4 2024, sourced from Insider Monkey’s comprehensive database.
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Note: All data was sourced on April 15.
Our interest in stocks with significant hedge fund backing stems from research indicating that emulating the best hedge fund picks can lead to market outperformance. Our quarterly strategy, which recommends 14 small-cap and large-cap stocks, has achieved a substantial 373.4% return since May 2014, significantly outpacing its respective benchmark by 218 percentage points (see more details here).
Is Cogent Biosciences Inc. (NASDAQ:COGT) the Most Promising Penny Stock?
Share Price as of April 15: $4.58
Number of Hedge Fund Holders: 38
Average Upside Potential as of April 15: 249.34%
Cogent Biosciences, Inc. (NASDAQ:COGT) is a biotechnology firm focused on developing targeted therapies for diseases arising from genetic factors. Its lead candidate, bezuclastinib (CGT9486), is a selective tyrosine kinase inhibitor that is currently undergoing Phase 3 clinical trials. This therapeutic agent targets mutations within the KIT receptor tyrosine kinase, particularly the KIT D816V mutation associated with systemic mastocytosis (SM), as well as various mutations prevalent in patients suffering from advanced gastrointestinal stromal tumors.
The company holds a robust cash reserve of $312 million, which will enable it to sustain operations through late 2026. The firm’s expenditures on research and development surged to $62 million in Q4 2024, with total R&D costs reaching $232.7 million for the year, reflecting accelerated efforts in advancing bezuclastinib and other research initiatives. Noteworthy updates from the SUMMIT and APEX trials were shared at the American Society of Hematology (ASH) meeting in February, indicating positive advancements for both non-advanced and advanced SM patients.
Initial findings from the SUMMIT trial demonstrated patients receiving 100 mg of bezuclastinib experienced a 56% average improvement in symptoms over a 24-week period. In the APEX trial, bezuclastinib yielded a 52% overall response rate (ORR) based on mIWG criteria. Cogent anticipates releasing top-line results from the SUMMIT trial in July 2025 and from the APEX trial in the second half of 2025, with plans to submit its first New Drug Application (NDA) for bezuclastinib by the close of 2025.
Conclusively, COGT holds the 4th position among our identified promising penny stocks based on analyst ratings. While we recognize COGT’s potential for growth, we also believe that investments in AI stocks could offer substantial returns in a more condensed timeline. Notably, there is an AI stock that has appreciated since early 2025, even as other well-known AI stocks have declined by approximately 25%. For those seeking an AI stock with high promise trading at less than five times its earnings, we recommend checking our report on the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This content was originally published by Insider Monkey.
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finance.yahoo.com