We recently compiled a list of the 10 Best New Penny Stocks To Buy Now. In this article, we are going to take a look at where 60 Degrees Pharmaceuticals, Inc. (NASDAQ:SXTP) stands against the other new penny stocks.
Fears of a US recession are growing, sending stock markets down, and investors around the world are on edge. The US Bureau of Labor Statistics (BLS) released July job figures that were worse than anticipated, revealing only 114,000 new jobs generated in July compared to the predicted 175,000. These data alarmed investors, as did the disappointing latest earnings from tech giants. As a result, the manufacturing industry in the US had an eight-month low in activity and the unemployment rate reached a three-year high of 4.3% due to a decline in new contracts.
Monday was the worst day for Wall Street in nearly two years as key indexes fell on worries about a US recession. The average of the 500 largest publicly traded companies plummeted 3% to 5,186.33. However, the 500 large companies are still up more than 10% for the year.
Chris Weston, of the US online stockbroker Pepperstone, said global markets were “at a truly important juncture”. “What really matters now is whether money managers and traders feel sentiment has become too pessimistic, or if this deleveraging and risk aversion manifests into even higher volatility and drawdown.
Opinions among analysts regarding the gravity of the problem differ. James St Aubin, chief investment officer at Ocean Park Asset Management, “We’re witnessing the fallout from the curse of high expectations,”, while Art Hogan, chief market strategist at B. Riley Wealth, said that markets may be overreacting. He stated:
“This isn’t a Category 3 hurricane, but we are seeing how markets react to signs that the economy is normalising after turning hot in the first half of this year.” “Markets can find themselves overreacting and investors [latch] on to anything as an excuse to take profits.”
The 500 large companies have gained more than 15% this year, despite recent setbacks.
The market’s anxiety may be heightened by the possibility that fewer initial public offerings (IPOs) might take place this year. However, 154 IPOs were listed on the US stock market in 2023, but this was 85% fewer than the record-breaking 1,035 IPOs in 2021 and 15% fewer than the 181 IPOs in 2022, 82.5% fewer than in 2021. IPOs totaling 6,203 have occurred between 2000 and 2024. 2009 had the fewest, with just 62. With 1035 IPOs in total, 2021 established an all-time record, surpassing the previous high of 480 in 2020.
George Chan, EY Global IPO Leader, says:
“As 2024 unfolds, participants in the IPO market are entering uncharted territory. IPO candidates are influenced by the recent pivot in investors’ preference toward proven profitability in an altered interest rate landscape, and are doing this while facing the intricate dynamics of an intensified geopolitical climate and the buzz around AI. To succeed in this shifting environment, IPO prospects must remain flexible and prepared to seize the right moment for their public debuts.”
Recent data from EY Global IPO Trends Q2 2024 show that in 2024, the US IPO markets saw a strong start that increased global proceeds. On the other hand, the Asia-Pacific area had a poor start, which affected the worldwide volume overall. In the first half of 2024, the industrials (21%), technology (19%), and materials (11%) markets led the way in global IPO issuance, with India dominating in terms of deal volume. Meanwhile, the technology (21%), health and life sciences (17%), and industrials (15%) markets topped the IPO proceeds rankings, with the US attracting the lion’s share of these sectors. As the home to many of the world’s leading technology and healthcare companies, the US has a strong ecosystem for startups. Driven by favorable market conditions, expectation of interest rate cuts, and innovations in artificial intelligence (AI), IPO deal values have skyrocketed in both these markets. Moreover, a handful of large deals contributed to a 67% increase in proceeds from IPOs in the US in the first half of 2024.
Methodology:
In this article, we first used a stock screener to list down all stocks trading under $5 (as of the writing of this article) with high institutional ownership. We have limited our selection to stocks that went IPO over the past year. From the resultant dataset, we chose 10 stocks with the highest number of hedge fund investors, using Insider Monkey’s database of 920 hedge funds in Q1 2024 to gauge hedge fund sentiment for stocks. We have used the stocks’ market cap as a tie-breaker in case two or more stocks have the same number of hedge funds invested.
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 laboratory holding a test tube filled with a glowing blue solution, representing the company’s nano-biopharmaceutical research and development.
60 Degrees Pharmaceuticals, Inc. (NASDAQ:SXTP)
Number of Hedge Fund Investors: 3
Market Cap: $2.51 million
A specialist pharmaceutical firm known as 60 Degrees Pharmaceuticals, Inc. develops and markets treatments for the avoidance and management of infectious diseases in the US. The company provides Arakoda as a malaria preventive medication. Additionally, it works on the development of Tafenoquine (Arakoda regimen), which is being tested in a Phase IIb clinical trial for COVID-19 indications; Tafenoquine, which is being studied in Phase IIA clinical trials for fungal pneumonia, babesiosis, and candidiasis; and Celgosivir, which is being examined in clinical studies for dengue and respiratory viruses.
SXTP is one of the best new penny stocks to buy now. The date of the IPO for SXTP is June 14, 2023. As of Q1 2024, the firm’s investors included 3 of the 920 hedge funds surveyed by Insider Monkey, in line with the prior quarter.
60 Degrees Pharmaceuticals, Inc. (NASDAQ:SXTP) stock has fallen to a 52-week low in a volatile market environment, reaching a price of $0.12. This substantial decline represents a startling shift of one year, with the company’s stock value declining by 96.86%. Concerned observers have observed how SXTP shares slumped amid several difficulties, ultimately reaching this new low point. Per the analysts, the dramatic fall in the last year highlights the instability and challenges that the pharmaceutical industry faces, prompting concerns about the company’s strategy and its capacity to withstand the present economic storm.
On the bright side, 60 Degrees Pharmaceuticals has started a clinical trial to assess the safety and effectiveness of tafenoquine as a therapy for babesiosis. This is the first experiment of its sort, and by September 2025, preliminary findings should be available. Important initiatives, including the appointment of five board members and modifications to the incorporation certificate and equity incentive plan, have also been approved by the company’s shareholders.
In light of the company’s first-quarter financial report, which revealed a gross profit of $81,000 and a net profit of $309,000, Ascendiant Capital has decided to keep its Buy recommendation on the stock. Tafenoquine has been designated as an orphan drug by the US FDA, which provides market exclusivity, tax incentives, and fee exemptions to support the development of rare illness therapies. These represent the latest advancements in the company’s continuous endeavors to create novel therapies for contagious illnesses.
60 Degrees Pharmaceuticals (NASDAQ:SXTP) announced Q1 2024 net product revenues of $105.7 thousand, up by 515% compared to the same quarter the previous year due to ARAKODA’s domestic sales. While net income for common shareholders increased to $0.309 million, or $0.03 per share, from a $2.601 million loss, or ($1.13) per share, in Q1 2023, gross profit rose to $51.0 thousand from a $55.9 thousand loss. Higher R&D and commercial marketing spending caused operating expenses to rise to $1.41 million. The hiring of Kristen Landon as Chief Commercial Officer and the development of a clinical trial involving tafenoquine for the treatment of babesiosis are two significant commercial milestones.
The U.S. Army recently awarded 60 Degrees Pharmaceuticals (NASDAQ:SXTP) a contract for the commercial validation of new ARAKODA (tafenoquine) packaging after the company saw a 515% increase in sales in Q1 2024 compared to the same quarter preceding year. The potential of ARAKODA to treat babesiosis, a dangerous illness spread by ticks, is also being investigated by the company.
Analysts recommend a “buy” on SXTP. The stock has an average price target of $2.40 and offers investors a potential upside of 1,820.00%.
The FDA Orphan Drug Designation, a babesiosis clinical study, and successful ARAKODA sales put 60 Degrees Pharmaceuticals (NASDAQ:SXTP) in a strong growth position.
Overall SXTP ranks 10th on our list of the best new penny stocks to buy. While we acknowledge the potential of SXTP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than SXTP 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.