10 Speculative Stocks With 50% to 300% Upside Potential

The nine-and-a-half-year-old bull market of 2018 has run into some headwinds in the major equity indexes, but the United States has remained far better with positive gains in 2018 than the negative performance in many international and emerging markets. Investors recently have had to be much more nimble due to the selling pressure seen in October. Despite that pressure and the market volatility, investors need to consider that the major U.S. indexes just hit all-time highs in September. And investors have to evaluate how they want their assets positioned for the rest of 2018 and into 2019.

24/7 Wall St. reviews dozens of analyst upgrades, downgrades and initiations each day of the week. This ends up being hundreds of analyst calls by the end of each week. The goal is to find new investing and trading ideas for our readers. Some calls cover stocks to buy, and some cover stocks to sell or to avoid. When it comes to “buy” ratings, there are many different names and many different levels of risk and return to consider. Most stocks receiving new Buy or Outperform analyst ratings in Dow Jones industrial average stocks and S&P 500 stocks come with projected upside of 8% to 10% at this stage in the bull market. There is another type of Buy rating that is far more speculative, one in which the projected upside can be 50%, 100% or exponentially higher.

Investors must understand that speculative stocks generally are much riskier than Dow or S&P 500 stocks. They rarely come with dividends, and many of the companies have limited operating history. Revenues and earnings in the most speculative companies are either limited or may not be expected for years.

The most speculative classes of stocks often tend to fall within biotech and technology, but they can sometimes include energy, metals, minerals and other high-risk areas. Investors must never forget or ignore the notion that they may be risking their entire investment in highly speculative companies.

24/7 Wall St. has identified 10 highly speculative stocks that have been received Wall Street analyst calls in the past 10 days in which the analysts have projected upside of 50% to 300%. Again, these are highly speculative by nature, and they should be avoided by investors who are very conservative and are looking for stable earnings and dividends.

AcelRx Pharmaceuticals Inc. (NASDAQ: ACRX) was raised to Buy from Hold and was given an $8 price target at Jefferies on October 15. Its shares had closed previously at $3.98, after a 10.7% gain the day. Yet, the stock closed down 12.5% at $3.63 on Friday, so the new price would imply even that much more than 100% upside. AcelRx has a $220 million market cap and a 52-week trading range of $1.65 to $5.03. This call was after an FDA Advisory Committee recommended approval of Dsuvia, a non-invasive opioid, for the treatment of moderate to severe acute pain.

As a reminder, formal FDA decisions do not always follow panel recommendations. That said, the committee voted 10 to three in favor of recommending the approval of Dsuvia, and its Prescription Drug User Fee Act (PDUFA) date is November 3, 2018. AcelRx was among the speculative exponential upside stocks in mid-August as well.

Aimmune Therapeutics Inc. (NASDAQ: AIMT) was reiterated as Outperform at Wedbush, along with a $72 price target that was double and then some over the $28.28 prior closing price. The call from the morning of October 17 still had a lower price by Friday’s closing bell of $27.29. Aimmune initiated its Phase 2 AR101 and Dupilumab trial for peanut allergy, which is also as part of a collaboration with Regeneron and Sanofi. The Wedbush report noted that management is confident of an AR101 Biologics License Application (BLA) submission by the end of 2018 and anticipates a priority review with potential U.S. approval in the fourth quarter of 2019.

The company is also studying egg allergy as well, and Wedbush sees potential updated information on its follow-on trial and a BLA filing in the fourth quarter of 2018. Aimmune has nearly a $1.6 billion market cap and a 52-week trading range of $24.56 to $42.00.

Eiger Biopharmaceutical Inc. (NASDAQ: EIGR) shares were up about 8% at $11.75 on Wednesday morning (10/17) after releasing positive results from its Phase 2 study of Avexitide targeting GLP-1 in patients with post-bariatric hypoglycemia. Ladenburg Thalmann has been rather bullish here, and the firm raised its price target to $28 from $23 after the release.

Other firms are even more positive on Eiger, with a consensus target price that was about $30 and a street-high that somehow gets it up to a $53 price target. The 52-week range is $7.46 to $18.00, and the market cap is $170 million.

Fitbit Inc. (NYSE: FIT) was raised Outperform from Neutral with a $6.50 price target at Wedbush. This call was back on October 12, and it compared to a $4.50 prior closing price. Unlike many other battered speculative stocks that sold off during the selling this last week, Fitbit shares closed at $4.75 on Friday. That means that for it to get into the 50% upside club it can only be acquired on pullbacks. Still, this $1.16 billion maker of fitness monitoring wrist devices is moving deeper into health care monitoring, and the 52-week high of $7.79 a share is a mere fraction of its earlier glory days.

The analyst call came as Fitbit expands into health care and med-tech verticals with a large share of both markets, and the firm cited underappreciated opportunities in medical technology. The prior consensus target price was $7.28, but that was more recently represented as $6.42.

LiveXLive Media Inc. (NASDAQ: LIVX) was started with a Buy rating and assigned a $10 price target at Ladenburg Thalmann on October 16, and H.C. Wainwright initiated coverage with a Buy rating and a more conservative $6 price target on October 19. What stands out is that these calls represent 100% to over 200% upside from the $2.77 close on Friday, but the shares were down 7% on Friday.

Shares of the operator of internet networks for live music and music-related video content were previously up by over 6% in Tuesday’s trading, but the price was up at $3.10 on Wednesday. Its market cap is $144 million, and the shares were briefly trading above $8 earlier in 2018.

Model N Inc. (NYSE: MODN) was started with an Outperform rating at Oppenheimer, which also assigned a $23 price target, on October 19. This represented about 52% upside from the $15.14 closing price on Friday, but that upside was even higher than the prior $14.99 closing price. Model N had a consensus target price of $23.80 and a street-high analyst target of $25.

This provider of revenue management cloud solutions for the life sciences, technology and manufacturing outfits has a $473 million market cap, a 52-week trading range of $13.36 to $20.33 and a market cap of $473 million.

Nightstar Therapeutics PLC (NASDAQ: NITE) was started with an Overweight rating and assigned a $36 price target at Cantor Fitzgerald. This October 11 call compared with a $15.03 price closing price, but Nightstar was down at $13.57 by this Friday’s closing price. The consensus target price is $34.50, the 52-week trading range is $10.01 to $29.55 and the market cap was $454 million on last look.

Nightstar is a clinical-stage gene therapy company focused on developing and commercializing one-time treatments for patients suffering from rare inherited retinal diseases that would otherwise progress to blindness. It may be worth noting that Nightstar did sell 4 million American depositary shares for $18 apiece back on September 28, but the underwriting group did not include Cantor Fitzgerald.

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Tellurian Inc. (NASDAQ: TELL) was started with an Outperform rating at Credit Suisse on October 11. The developing company is targeting natural gas delivery similar to Cheniere, and the Credit Suisse price target of $15 was well over 50% higher than the $8.85 most recent close. Tellurian has a 52-week trading range of $6.45 to $13.74, and its consensus analyst target is $12.71.

The street-high target price on Tellurian is even higher than Credit Suisse’s, and that was after Robert W. Baird raised its target to $17 from $15 back in September. Its market cap is still just over $2.1 billion.

Tilray Inc. (NASDAQ: TLRY) was started with a Buy rating and assigned a $200 price target at Benchmark on October 16. While this call is currently not in the 50% category, it is so volatile and any analyst metrics make the $13.5 billion Canadian marijuana stock an effective call option either way. Benchmark was not in the underwriting syndicate of Tilray’s recent convertible note financing. The stock closed up over 11% at $165.64 a share ahead of Benchmark’s call, but it was down at $145.30 by Friday’s close. Its post-IPO range is $20.10 to $30.00.

There seemed to have been a “sell the news” reaction going into Canada’s formal legalization of marijuana this past week. Tilray is so speculative and volatile that any positive analyst call is worth noting at this time.

ViewRay Inc. (NASDAQ: VRAY) was started with an Outperform rating at Robert W. Baird on October 19, and the firm’s $14 price target implied 49% upside from the prior closing price of $9.42. That said, ViewRay did close up almost 1% higher at $9.50 on Friday, and it has a 52-week range of $6.05 to $13.21.

ViewRay designs, manufactures and markets radiation therapy systems, and its MRIdian radiation therapy solution enables treatment and real-time imaging of a patient’s anatomy simultaneously. The market cap is $891 million.

As a final reminder, speculative stocks often pull back more in falling markets than established stocks. They also can rise more than traditional stocks, but their share prices may crumble even in good markets if they fail to develop as the analysts expected.