While most of Wall Street focuses on large-cap and mega-cap stocks, as they provide a degree of safety and liquidity, many investors are limited in the number of shares they can buy. Many of the biggest public companies, especially the technology giants, trade in the hundreds, all the way up to over $1,000 per share or more. At those steep prices, it is difficult to get any decent share count leverage.
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Many investors, especially more aggressive traders, look at lower-priced stocks as a way not only to make some good money but to get a higher share count. That can really help the decision-making process, especially when you are on to a winner, as you can always sell half and keep half.
Skeptics of low-priced shares should remember that at one point Amazon, Apple and Netflix traded in the single digits. Nvidia, which has exploded higher on AI semiconductor chips, traded under $10 for years. One stock we featured over the years, Zynga, was purchased by Take-Two Interactive. Cogent Biosciences, which we featured last March, has tripled since then.
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We screened our 24/7 Wall St. research database looking for smaller cap companies that could offer patient investors some huge returns for 2023 and beyond. All five of this week’s stocks are owned by Cathie Wood’s Ark Investments, which in and of itself is a huge endorsement.
However, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Adaptive Biotechnologies
Cathie Wood has bought almost 10 million shares of this stock for her Ark Genomic Revolution fund. Adaptive Biotechnologies Corp. (NASDAQ: ADPT) is a commercial-stage company that develops an immune medicine platform for the diagnosis and treatment of various diseases.
The company offers immunoSEQ, a platform and core immunosequencing product that is used to answer translational research questions, as well as to discover new prognostic and diagnostic signals. It also provides clonoSEQ, a clinical diagnostic product for the detection and monitoring of minimal residual disease in patients with multiple myeloma, B cell acute lymphoblastic leukemia and chronic lymphocytic leukemia, as well as available as a CLIA-validated laboratory developed test for patients with other lymphoid cancers.
In addition, Adaptive Biotechnologies offers a pipeline of clinical products and services that are used for the diagnosing, monitoring and treatment of diseases, such as cancer and autoimmune disorders. It offers products and services for life sciences research, clinical diagnostics and drug discovery applications. The company has strategic collaborations with Genentech for the development, manufacture and commercialization of neoantigen directed T cell therapies for the treatment of a range of cancers and with Microsoft to develop diagnostic tests for the early detection of various diseases from a single blood test.
Piper Sandler has a $15 target price on Adaptive Biotechnologies stock. The consensus target is $12.29, and shares last traded on Friday at $8.39.
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CareDx
This off-the-radar clinical play has solid upside Goldman Sachs objective. CareDx Inc. (NASDAQ: CDNA) discovers, develops and commercializes diagnostic solutions for transplant patients and caregivers. As of earlier this year Cathie Wood owned over 6 million shares of the company.
CareDx provides the following:
- AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients
- AlloMap Heart, a gene expression solution for heart transplant patients
- AlloSure Heart, a dd-cfDNA solution for heart transplant patients
- AlloSure Lung, a dd-cfDNA solution for lung transplant patients
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It also offers the following:
- Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence-specific primer technology
- QTYPE, which enables precision in HLA typing
- Ottr, a transplant patient management software
- AlloSeq Tx, a high-resolution HLA typing solution
- AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood
- AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients
- XynQAPI, offering transplant quality tracking and waitlist management solutions
- AlloCare, a mobile app that offers a patient-centric resource for transplant recipients
CareDx offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina for the distribution, development and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss.
Goldman Sachs has a $13 target price, while the consensus target is $12.80. CareDx stock closed on Friday at $7.96.
Compass Pathways
Cathie Woods owns approximately 2.4 million shares, and this stock could have the biggest upside potential of all of these red-hot stocks. Compass Pathways PLC (NASDAQ: CMPS) operates as a mental health care company primarily in the United Kingdom and the United States. It develops COMP360, a psilocybin therapy that is in Phase 3 clinical trials for the treatment of treatment-resistant depression, and it is in Phase 2 clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa.
The company announced earlier this month that the U.S. Patent Trial and Appeal Board reaffirmed decisions to uphold ‘257 Patent and ‘259 Patent, key patents covering COMP360 crystalline psilocybin polymorph A, the polymorph being used in the company’s Phase 3 clinical trials.
The Oppenheimer target price is $33, and Compass Pathways stock has a consensus target of $42.30. The shares last traded at $7.69 on Friday.
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Genius Sports
Cathie Wood owns over 5 million shares of this sports-betting-related stock, which has been hammered and holds massive upside potential, and it could even be a takeover target. Genius Sports Ltd. (NYSE: GENI) develops and sells technology-led products and services to the sports, sports betting and sports media industries.
Genius Sports offers technology infrastructure for the collection, integration and distribution of live data of sports leagues; streaming solutions, comprising of technology, automatic production and distribution for sports to commercialize video footage of their games; and end-to-end integrity services to sports leagues, such as full-time active monitoring technology, which uses mathematical algorithms to identify and flag suspicious betting activity in global betting markets, as well as full suite of online and offline educational and consultancy services.
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Genius Sports also provides live sports data collection; pre-game and in-game odds feeds; risk management services, including customer profiling, monitoring of incoming bets, automated acceptance and rejection of bets, and limit setting; live streaming services; creation, delivery and measurement services for personalized online marketing campaigns; and fan engagement widgets for digital publishers that offer live game statistics and betting-related content.
Genius Sports has an $8 price objective at Credit Suisse. The consensus target is $7, and shares closed at $5.66 on Friday.
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908 Devices
This is another Cathie Wood portfolio stock that also has the potential to be a huge winner. 908 Devices Inc. (NASDAQ: MASS) provides various purpose-built handheld and desktop mass spectrometry (Mass Spec) devices to interrogate unknown and invisible materials in life sciences research, bioprocessing, industrial biotech, forensics and adjacent markets. It operates in the Americas, Europe, the Middle East, Africa and the Asia Pacific.
The company’s products include:
- MX908, a handheld, battery-powered and Mass Spec device that is designed for rapid analysis of gas, liquid and solid materials of unknown identity
- Rebel, a small desktop analyzer that provides real-time information on the extracellular environment in bioprocesses
- Maven and Trace C2, an online device for bioprocess monitoring and control
- ZipChip solution, a plug-and-play, high-resolution separation platform that optimizes Mass Spec sample analysis.
The $20 SVB Leerink target price compares with a $17 consensus target. On Friday, 908 Devices stock closed at $8.48 a share.
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Cathie Wood’s investments always stir up interest and, after a dreadful 2022, all of her funds have continued to grab investors’ dollars. While they are not for the timid, for those investing for the future and a wide-open tomorrow, she may be just the person to get some outstanding stock ideas from.
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