We recently compiled a list of 10 Stocks Under $10 With High Potential. In this article, we will look at where Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) ranks among the best stocks under $10 with high potential.
How Does the Market Look Like in the Current Geopolitical Environment
There has been ongoing geopolitical in the Middle East, which escalated recently when Iran launched a series of missiles toward Israel. These tensions are no longer restricted to just the Middle East but are having impacts globally. On October 1st Reuters reported that the Iraqi armed groups have threatened to attack US bases in Iraq and the region if it joins forces in response to its strike on Israel.
Tom Lee, managing partner and head of research at Fundstrat Global Advisors, appeared on CNBC to discuss what the stock market looks like in the current geopolitically tense environment. Lee has been bullish on small caps for a long time however, he has also remained cautious regarding some bumps in the start before the market for small caps starts to rise. He maintained a bullish stance, projecting a year-end target of 6,000 for the S&P 500, despite acknowledging potential short-term volatility due to upcoming events like the election and geopolitical tensions in the Middle East.
He emphasized that current market conditions are tricky, with headline risks stemming from a potential port strike that could impact the economy. Lee suggested that if a significant dip occurs, it would be a good opportunity to buy, as he believes the long-term outlook remains positive despite temporary setbacks.
Talking about how the market has performed during wars in the past. Lee noted that historically, market reactions to geopolitical conflicts have often been more positive than anticipated. He cited past conflicts where buying during initial downturns proved beneficial, except for the recent Russia-Ukraine war which went otherwise due to concurrent Federal Reserve tightening.
He also discussed the implications of the ongoing longshoremen strike, indicating that each week of disruption could reduce GDP by approximately 0.3%. Lee believes that if this leads to a weakening labor market, the Fed might adopt a more dovish stance, meaning more interest cuts and money supply by the Fed.
China is one of the silver linings in the current market environment, Lee thinks China is currently one of the best-performing markets this year. He believes there is significant room for improvement in the Chinese market due to its historical underperformance when compared to the United States Market.
In one of our recent articles about the 8 Most Active US Stocks To Buy Now, we talked about how the market is expected to remain resilient moving into the elections. Here’s a piece from the article:
Liz Young Thomas, SoFi head of investment strategy, joined ‘Squawk Box’ at CNBC on September 30 and shared her insights regarding the market’s trajectory as it approaches an easing cycle. She acknowledged that while there has been a significant run-up leading to this cycle, much of the substantial gains may have already been realized.
However, she noted that this does not necessarily mean the market will slow down immediately. Historically, after the first rate cut, markets tend to remain flat or slightly up in the following 30 to 60 days. 3 months post-cut, the market evaluates whether these cuts were necessary due to cooling economic conditions or if they were merely opportunistic adjustments.
Young highlighted several positive factors contributing to the current market rally. Despite a slight pullback in technology stocks, she observed that many other stocks are performing well, with 80% of the S&P 500 trading above their 200-day moving averages. This indicates a strong internal market dynamic. Additionally, optimism surrounding potential stimulus measures from China adds further support to market sentiment.
When discussing valuation concerns, Young agreed that while US market multiples are relatively high, hovering around 21 to 22, this is not unprecedented when compared to historical standards. She pointed out that current valuations are above both the 5-year and 10-year averages but not at overbought levels. Young referenced Warren Buffett’s long-term investment philosophy, emphasizing that he does not focus on timing market multiples but rather on fundamental growth.
Young expressed a desire for the market to shift towards trading based on fundamentals rather than multiple expansions. She noted that while earnings stability is crucial, there are signs of strength in sectors outside of technology, particularly in industrial stocks. However, financials have shown mixed signals.
Our Methodology
To compile a list of 10 stocks under $10 with high potential, we used the Finviz stock screener. Using Finviz we screened stocks trading below the share price of $10 with analyst price target above 50%. Once we had an aggregated list we ranked these stocks based on the analyst upside potential sourced from CNN. Please note that the share price is accurate as of October 1st, 2024.
Why do we care about what hedge funds do? 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).
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA)
Share Price: $9.39
Analyst Upside Potential: 150.27%
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is a clinical-stage biopharmaceutical company that focuses on developing cancer treatments using a unique method called tumor-infiltrating lymphocyte (TIL) therapy.
Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) is the best stock to buy under $10 with high potential. The investment case for this biotechnology company is based on several reasons.
The first is the news that the company is set to open around 70 authorized treatment centers in the United States. Why is this important for the company? To understand this we need to look deeply into its treatment.
The company uses Amtagvi to treat patients with melanoma using the TIL therapy method. This method uses the body’s immune cells to fight cancer, specifically targeting solid tumors, which are often more difficult to treat than blood cancers. This treatment requires a month to culture the samples and also requires authorized treatment centers to take samples and keep the patients in care for at least a week.
This is where the news of setting up 70 authorized treatment centers becomes significant. With fewer treatment centers the addressable market of the company was restricted as it was difficult for patients to travel for the treatment. However, with a center in a 200 mile radius around 90% of the patients will automatically become eligible for the treatment thereby placing the company on a growth trajectory.
The second reason why Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) could be a solid investment case lies in its pipeline which indicates there is more growth to come. Currently, the therapy used by the company is not the first-line treatment. However, the company is in phase 3 of clinical trials to test whether Amtagvi is used in combination with the current first-line treatment drug. If the trial is successful the therapy will become the first line of treatment thereby increasing the total addressable market for the company.
Artisan Small Cap Fund stated the following regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) in its Q2 2024 investor letter:
“Among our top detractors for the quarter were Lattice Semiconductor and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Iovance Biotherapeutics is a biotechnology company focused on innovating, developing and delivering novel polyclonal tumor-infiltrating lymphocyte (TIL) cell therapies for cancer patients. The stock rallied significantly in Q1 after announcing that the FDA approved AMTAGVI™ (lifileucel) for advanced melanoma. Now that the scientific risk is behind the company, investor focus has shifted to the company’s commercial execution, and shares experienced weakness after the company reported earnings results. It announced the enrollment of more than 100 patients for therapy; however, this was not enough to alleviate investor concerns about patient attrition. In our view, there is no issue with the efficacy of its life-saving treatment. Headwinds have been caused by challenges in ramping production, which is understandable in the early days. We view these concerns as overblown and remain invested.”
While we acknowledge the potential of Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) to grow, 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 a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Overall IOVA ranks 1st on our list of best stocks under $10 with high potential. While we acknowledge the potential of IOVA 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 a promising AI stock that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure. None. This article is originally published on Insider Monkey.
