We recently compiled a list of 7 Best Russell 2000 Stocks to Buy According to Analysts. In this article, we will look at where Skye Bioscience, Inc. (NASDAQ:SKYE) ranks among the best Russell 2000 Stocks to Buy According to Analysts.
The investor sentiment remains bullish toward the market, especially since the Fed’s recent decision to cut interest rates by half a percentage point, which is seen as a move to sustain economic health rather than a response to economic distress.
Moreover, the recent inflation report also showed positivity. After the first rate cut since March 2020, the August inflation report showed that the Personal Consumption Expenditures (PCE) price index rose 2.2%, the lowest level since early 2021. Core PCE, which excludes food and energy, also rose 0.1% for the month and recorded a 12-month increase of 2.7%.
While the market is reacting positively to the news, some experts are slightly worried about the market trends.
Bernstein’s Insights on Market Trends
Richard Bernstein, CEO of Richard Bernstein Advisors, joined CNBC ‘The Exchange’ on September 23 to discuss what’s happening in the market. He mentioned that stocks of small companies are not doing as well as riskier investments like cryptocurrencies. He is worried that the Federal Reserve is putting too much money into the economy, and it is not being spent wisely.
However, Bernstein believes that small and mid-sized companies will grow a lot by the end of the year, especially compared to the slower growth of big tech companies, such as the “Magnificent Seven.” Bernstein is also concerned that the Fed is lowering interest rates even though the profits are getting better, which might make the situation worse.
When asked if it’s time to focus on big tech stocks, Bernstein said many investors are doing that because of the current market trends. He thinks smaller companies offer better value and growth in the long run. He criticized risky investments like cryptocurrencies, saying they take money away from important areas like infrastructure, which could harm the economy. He warned that financial bubbles, where prices go too high too fast, can be just as harmful as regular inflation.
The bullish sentiment around small-cap stocks is also shared by Greg Tuorto, a portfolio manager at Goldman Sachs Asset Management, as we discussed his interview with Yahoo Finance in our article, 7 Cheap Small-Cap Stocks To Buy Now. Here is an excerpt from it:
“He [Greg Tuorto] highlighted several supportive factors for small caps, including a stable U.S. economy and opportunities in sectors like technology, healthcare, and consumer industries. Despite recent underperformance, he believes small caps are positioned for a rebound, driven by strong earnings growth rather than multiple expansions.
Tuorto also emphasized the potential for small caps to outperform large caps in 2025, given that their earnings outlook appears more favorable.”
Our Methodology
For this article, we made a list of the 35 biggest best weekly performers of the small-cap index in the week ending September 27. Next, we narrowed our list of 7 stocks with the highest average analyst price target upside. The stocks are listed in ascending order of their price target upside. We also added 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).
Skye Bioscience, Inc. (NASDAQ:SKYE)
Average Price Target Upside: 380.00%
Number of Hedge Fund Holders: 12
Skye Bioscience, Inc. (NASDAQ:SKYE) is a biopharmaceutical company dedicated to pioneering treatments for metabolic health by exploring new therapeutic pathways. The focus is on developing next-generation molecules that target G-protein coupled receptors, an important area in biopharmaceutical research.
The company’s approach is to create first-in-class therapeutics that demonstrate clinical efficacy and stand out in the marketplace due to unique mechanisms of action. A key candidate in this pipeline is nimacimab, a negative allosteric modulating antibody that specifically inhibits the CB1 receptor, which is known to influence appetite and metabolism.
Currently, Skye Bioscience, Inc. (NASDAQ:SKYE) is conducting a Phase 2 clinical trial known as the CBeyond study to evaluate the effectiveness of nimacimab in addressing obesity. The trial will provide two important interim data updates in the second and fourth quarters of 2025, which could significantly impact the company’s trajectory.
The obesity treatment market is projected to reach an astonishing $130 billion by 2030, according to Goldman Sachs Research. While numerous weight loss drugs are in the pipeline by other companies, nimacimab’s unique mechanism may set it apart from the competition.
By inhibiting the CB1 receptor, this treatment seeks to facilitate weight loss while minimizing common side effects, such as gastrointestinal discomfort, that are often associated with other medications. Furthermore, nimacimab could help preserve lean muscle mass during weight loss, which is crucial for overall health and well-being.
In addition to evaluating nimacimab on its own, the CBeyond study also explores the possibility of combining this treatment with a GLP-1 agonist. GLP-1 agonists are already established in managing weight and diabetes, so this combination could improve the overall effectiveness of treatment, potentially offering a comprehensive solution for patients battling obesity.
Skye Bioscience, Inc. (NASDAQ:SKYE) is in a stable position, having cash and cash equivalents of $74.1 million, as of June 30. The financial cushion is expected to support operations through at least the first half of 2027, that provides a runway for continued research and development.
It is one of the best Russell 2000 stocks to buy according to analysts. The stock is a Buy according to 5 analysts and its average price target of $18.00 has an upside of 380.00%, as of September 27.
Overall SKYE ranks 2nd on our list of best Russell 2000 stocks to buy according to analysts. While we acknowledge the potential of SKYE 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 SKYE but 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.