We recently compiled a list of the 10 Best Hot Stocks To Buy Right Now. In this article, we are going to take a look at where Edgewise Therapeutics, Inc. (NASDAQ:EWTX) stands against the other hot stocks.
While the market is seeing significant positives after the Fed rate cut, there have been some pressures. For example, dockworkers from the International Longshoremen’s Association (ILA) have gone on strike at major U.S. ports along the East and Gulf coasts, marking the first such strike in nearly 50 years. The dispute involves a six-year contract covering 25,000 workers, with the ILA demanding significant wage increases and addressing concerns over automation.
While the US Maritime Alliance has offered wage and pension boosts, negotiations have still stalled. The strike could cause major disruptions to imports, especially food, clothing, and car shipments, with potential economic losses of $4 or $5 billion per week.
Moreover, CBS reported that Hurricane Helene is projected to be one of the most expensive storms in U.S. history, with Moody’s Analytics estimating property damage between $15 and $26 billion. AccuWeather forecasts that the overall damage and economic loss could reach up to $110 billion.
Central Banks, Port Strikes, and Inflation Risks: What Lies Ahead
Deepak Puri, Deutsche Bank Private Bank CIO of the Americas, recently joined CNBC’s ‘Money Movers’ as he discussed the current high expectations in the U.S. economy and noted that while inflation and employment are relatively stable, challenges lie ahead due to factors like the port strike, global conflicts, and post-hurricane reconstruction.
He mentioned that Chicago Fed President, Austan Goolsbee has highlighted the difficulty in maintaining the current economic balance. Puri advises patience in the markets due to various uncertainties, including the upcoming election.
Puri explained that while many central banks are lowering interest rates, it is uncertain whether the U.S. economy will avoid a downturn. Inflation remains a risk, and the U.S. port strike could cause serious economic problems if it lasts long, even though it hasn’t yet impacted the market much. He warned that several issues combined could affect inflation and overall economic performance.
When discussing the balance between inflation and jobs, the CIO said that concerns about the job market were bigger until recently, but now inflation is becoming more of a risk. He highlighted how challenging it is for the Fed to manage this situation, especially as consumer spending remains steady but is shifting. Meanwhile, sectors like housing and manufacturing, which are sensitive to interest rates, will need to take up the slack.
Finally, Puri talked about whether the Fed could pause rate cuts like the European Central Bank did. He thinks the Fed will keep lowering rates, but the size of future cuts will depend on upcoming labor market data.
Our Methodology
For this article, we made a list of the top 55 best-performing stocks on a year-to-date basis with a market cap of over $2 billion, as of October 1. We narrowed our list to 10 stocks that were most favored by analysts. The best hot stocks to buy right now are listed in ascending order of the average price target upside. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
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 using a microscope to study a cultured biopharmaceutical product.
Edgewise Therapeutics, Inc. (NASDAQ:EWTX)
Number of Hedge Fund Holders: 30
Year-to-Date Share Price Gains: 148.27%
Average Price Target Upside: 53.79%
Edgewise Therapeutics, Inc. (NASDAQ:EWTX) is a biopharmaceutical company focused on developing new treatments for muscle diseases, including muscular dystrophies and severe heart conditions. Its lead drug, Sevasemten, is an oral skeletal myosin inhibitor in advanced trials for Becker and Duchenne muscular dystrophies.
Another key drug, EDG-7500, is being developed for heart conditions like hypertrophic cardiomyopathy and is currently in Phase 2 trials. The company recently announced promising results from the Phase 1 and Phase 2 trials of EDG-7500.
In the Phase 1 trial with healthy participants, EDG-7500 was well tolerated, with no significant side effects on heart function. In the Phase 2 CIRRUS-HCM trial, patients with obstructive HCM showed significant reductions in heart pressure and a key heart failure biomarker without affecting their heart’s pumping ability.
Edgewise’s (NASDAQ:EWTX) early data on EDG-7500 has made the analysts quite bullish on the company. On September 19, TipRanks reported that Leerink Partners analyst Joseph Schwartz reaffirmed a Buy rating on the company stock with a $42 price target.
The analyst believes that EDG-7500 shows promise for treating hypertrophic cardiomyopathy (HCM). Early results indicate that EDG-7500 is well-tolerated and does not significantly affect left ventricular ejection fraction (LVEF), which is an advantage over other heart medications.
Schwartz pointed out that EDG-7500 effectively lowers the left ventricular outflow tract gradient without reducing LVEF, making it a safer and potentially better option. The analyst believes that there is an increased likelihood of success for EDG-7500 in treating obstructive HCM and expects more positive data to further improve the company’s value.
On September 20, RBC Capital analyst Leonid Timashev maintained an Outperform rating on Edgewise (NASDAQ:EWTX) and raised the price target to by $10 to $42. Timashev believes the early data for EDG-7500 is very encouraging, showing effectiveness and no safety issues, with the potential for the drug to get even better over time.
He is also positive about upcoming developments in the next six months, including data on Becker muscular dystrophy, Duchenne muscular dystrophy, and the multiple-dose trial of EDG-7500, which could help increase the stock’s value even more.
With average price target upside of 53.79%, Edgewise (NASDAQ:EWTX) is one of the best hot stocks to buy now.
Overall EWTX ranks 5th on our list of the hot stocks to buy. While we acknowledge the potential of EWTX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EWTX 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.
