We recently compiled a list of the 10 Best One-Dollar Stocks To Buy Now. In this article, we are going to take a look at where Adicet Bio, Inc. (NASDAQ:ACET) stands against the other one-dollar stocks.
The upward trend in the stock market has resumed, supported by strong first-quarter and second-quarter results that have relieved investor concerns about inflation. The US economy had a very strong year in 2023. Economic activity increased steadily, job creation was high, unemployment was low, real earnings rose, and inflation declined. Furthermore, the Federal Reserve maintained high interest rates throughout this time in an attempt to control inflation. June recorded a market increase of more than 10%. The large-cap market of the 500 biggest companies has already surged over 17% so far this year as analysts look forward to reduced interest rates in the second half of 2024, along with higher earnings growth and lower inflation.
Historically, since 1928, July has been the strongest month of the year for stocks in terms of performance. The market rose by 1.7% in July. Given that the market posted gains in May and June despite notable economic uncertainty, investors remain bullish that the market can sustain its positive trend.
In a May speech to the Foreign Bankers’ Association, Federal Reserve Chair Jerome Powell recognized the difficulty of bringing inflation down to the desired level. Powell stated that it could be essential to keep interest rates at their present levels for a longer period of time. Interest rates have been fluctuating between 5.25% and 5.5% since July 2023.
Amid concerns over an impending recession brought on by higher interest rates, the US labor market still remains stable. According to the Labor Department, the US economy created 175,000 new jobs in April, although this was less than the 240,000 jobs that economists had predicted. The US labor market maintains a low unemployment rate of 3.9%, while US wages have risen 3.9% YoY. Nonetheless, recession fears are maintained by the historical recession predictor, the inverted U.S. Treasury yield curve, and the New York Fed’s model, which projects a 50% chance of a recession within the next 12 months.
The second quarter of 2024 saw a gain of more than 3% in the US stock market. Under the hood, tech companies continued to lead the artificial intelligence trade, which showed no signs of slowing down throughout the quarter. One striking trend in the stock market this year has been the outperformance of the biggest companies. The large-cap market of the 500 biggest companies gained 4.4% in Q2, bringing its 2024 return to more than 15%. By comparison, the small-cap market had a decline of 3.3%, resulting in a reduced 2024 return of 1.6%.
With over half of 2024 already gone, the US stock market is expected to see significant increases for the second year in a row.
According to DataTrek Research co-founder Nicholas Colas, the 2024 stock market surge is about more than just this year; it also includes the outlook for 2025 and 2026. Colas stated:
“Markets are convinced that U.S. large cap companies will see many years (not just one) of improving earnings. Earnings for 2024 only have to come through slightly better than last year, and nothing occurs on the macro side (economic growth, geopolitics) to derail further earnings growth in 2025 and 2026.”
Investor confidence is supported by historical trends and recent earnings performance. The stock market does well in election years, according to historical statistics, especially when the president is serving his first term, as is the case with Joe Biden.
Methodology:
In this article, we first used a stock screener, Finviz, to list down all stocks trading under $1.5 and above $0.85 (as of the writing of this article) with over 40% institutional ownership. 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 stock’s Revenue Growth Rate (year-over-year) as a tie-breaker in case two or more stocks have the same number of hedge funds invested. We only considered stocks that received “buy” or “strong buy” recommendations from analysts.
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, holding a Petri dish with a culture growth of Gamma Delta T Cells.
Adicet Bio, Inc. (NASDAQ:ACET)
Number of Hedge Fund Investors: 22
The biotech company Adicet Bio (NASDAQ:ACET) is dedicated to creating readily available cell treatments for autoimmune disorders and cancer. Targeting B-cell non-Hodgkin’s lymphomas, they are presently doing a phase 1 study for their pilot cell treatment, ADI-001. The FDA approved its IND application to study ADI-270 in patients with relapsed or refractory renal cell carcinoma.
It is one of the best one dollar stocks to buy now since the consensus rating for ACET stock, according to analysts, is a “strong buy.” The 12-month average price target is $14.2, reflecting a possible 996.53% increase from the current price of $1.30. Analysts are optimistic about Adicet Bio because of its strong portfolio and forthcoming catalysts, that involve clinical data readouts. Secondly, Insider Monkey disclosed 22 funds that owned Adicet Bio, Inc. (NASDAQ:ACET) hedge funds in Q1 2024. Austin Wiggins Hopper’s AWH Capital is the largest stakeholder in the company.
Gamma delta T-cells are being used by Adicet Bio to construct a platform that exhibits both innate and adaptive immunological properties. These cells lower the likelihood of graft-versus-host illness by specifically targeting cancer and infected cells regardless of MHC presentation. This allows for on-demand usage and qualifies them for allogeneic (non-self) cell therapy.
ADI-001, the leading cell treatment from Adicet, targets CD20 in B cells associated with various leukemias and non-Hodgkin’s lymphomas. Early phase 1 trial data showed minimal adverse effects and promising cell growth and durability. The second part of the year is anticipated to provide further data, including those from patients with mantle cell lymphoma, and a phase 1 study for lupus nephritis is scheduled.
Adicet has $247.6 million in cash and equivalents as of the most recent financial report (Q1 2024), an increase of 6.89% over the same period the previous year. The business will have enough cash for eight or nine quarters, given that its operating expenses in Q1 2024 came to $30.9 million and its net loss in terms of revenue for the period was $28.0 million. It is doubtful that there will be any more dilution in the near future after a $98 million fundraising in January. Adicet and Regeneron have partnered on a GPC3 program for liver cancer, with Adicet receiving up to $80 million in exercise payments in addition to $45 million in upfront and milestone payments.
The gamma delta T-cell strategy used by Adicet has a good chance of having favorable safety profiles and great effectiveness. The preliminary findings are promising, especially in relapsed/refractory NHL, with response rates of over 70%. However, there is a risk associated with Adicet’s early development, as phase 1 data offer only a limited understanding of the drug’s long-term safety and efficacy. There is uncertainty about the timing for clearance, and larger trials may not replicate the early successes.
In the cell treatment space, Adicet Bio appears to be a strong contender based on preliminary evidence. Investors should use caution, nevertheless, considering the early stage of growth. The firm is not overpriced, it’s possible that the impending catalysts will be revolutionary.
Overall ACET ranks 4th on our list of the best one-dollar stocks to buy. You can visit 10 Best One-Dollar Stocks To Buy Now to see the other one-dollar stocks that are on hedge funds’ radar. While we acknowledge the potential of ACET 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 ACET 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.
