We recently compiled a list of the 12 NASDAQ Stocks with Biggest Upside Potential According to Analysts. In this article, we are going to take a look at where Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR) stands against the other NASDAQ stocks.
Potomac Wealth Advisors president Mark Avallone joined CNBC’s ‘The Exchange’ on November 16 to discuss where he sees investing opportunities following Trump’s election. He believes investing in the tech sector makes the most sense given the implications of the 2024 election results for the financial markets. He noted that the election has shifted the underlying dynamics affecting businesses, particularly regarding regulation and taxation. The new administration has changed the previous climate of heightened regulation and discussions around increasing capital gains and corporate taxes. Avallone believes that the potential for reduced regulation and lower taxes on corporations could create a more favorable environment for business growth.
He emphasized that corporate America’s ability to deliver earnings will be crucial, relying on continued efficiencies and advancements in technology. This perspective supports his thesis that investing in technology remains a sound strategy for investors. When discussing specific stocks, Avallone highlighted major tech companies from the MAG7 as particularly attractive. He expressed confidence that the current administration would foster a more supportive environment for these companies, allowing them to thrive.
Avallone also touched on the defense sector, which has historically benefited from global conflicts. He pointed out that defense companies have shown resilience and believes that ongoing global tensions will sustain demand for defense stocks, providing a hedge against market volatility.
However, Avallone expressed caution regarding the healthcare sector, which has been lagging due to heavy regulation and political scrutiny. He noted that despite an aging population driving demand for medical equipment, regulatory pressures have hindered growth in this area. Overall, his analysis underscores a cautious optimism about investing in technology and defense while highlighting potential challenges within healthcare as businesses navigate the post-election landscape.
Methodology
We sifted through Finviz to compile a list of 30 NASDAQ stocks with high upside potentials. We then selected the 12 stocks with the biggest upside potential according to analysts. The stocks are ranked in ascending order of their analysts’ upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A scientist in a lab coat analyzing a Petri dish surrounded by scientific equipment in a research lab.
Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR)
Average Upside Potential as of November 21: 145.40%
Arrowhead Pharmaceuticals Inc. (NASDAQ:ARWR) is a biopharmaceutical company that specializes in developing innovative therapies using its proprietary RNA interference (RNAi) technology to target and silence specific genes responsible for various diseases. The lead product candidate, ARO-AAT, is designed to treat alpha-1 antitrypsin deficiency, a genetic disorder that can lead to liver disease and lung problems.
It’s working on a pipeline of 20+ drugs, with the first, plozasiran, expected to launch in 2025 in familial chylomicronemia syndrome (FCS) and revolutionize the treatment of several lipid disorders. A key advantage of plozasiran is its unique mechanism of action, which allows it to significantly lower triglyceride levels, positioning it as a potential best-in-class treatment.
A recent significant milestone for the company was the successful completion of the Phase 3 PALISADE study for plozasiran. The study met its primary endpoint and key secondary endpoints, demonstrating the drug’s efficacy and safety. This achievement validates its scientific approach and positions the company for future growth and success.
Baron Opportunity Fund made the following comment about Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR) in its Q1 2023 investor letter:
“Arrowhead Pharmaceuticals, Inc. (NASDAQ:ARWR), a biotechnology company specializing in RNA interference (RNAi) medications to treat a variety of diseases, detracted from performance. The company has lacked major wins in recent years, while also tallying some losses. Management’s late-stage drug licensing efforts to drive upfront and running royalties to bolster its balance sheet and ensure a longer cash runway have also pressured shares. Reinvigorating the company’s strategic story remains a key consideration for Arrowhead going forward. Last year, we reduced our portfolio weighting in Arrowhead but decided to maintain a foothold position. We believe Arrowhead’s efforts to target RNAi to the lungs will open a new therapeutic area of exploration. In our view, this initiative may lead to RNAi economies of scale, allow for an expansion of pipeline and collaboration opportunities, and generate a long runway for growth.”
Overall ARWR ranks 3rd on our list of the NASDAQ stocks with biggest upside potential according to analysts. While we acknowledge the potential of ARWR as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than ARWR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.