Special Report
4 Undervalued NASDAQ Stocks Under $20
At the same time, there are quite a few stocks that were also, apparently, left behind. That includes the four undervalued NASDAQ-listed stocks below that trade at less than $20 a share. Our goal with these four stocks is to simply buy high-quality, low-priced stocks that are not reflecting their long-term potential. And then hold them until everyone else wakes up.
Amicus Therapeutics (FOLD)
Undervalued, Amicus Therapeutics is a $3.82 billion biotech company focused on discovering, developing and delivering novel high-quality medicines for patients living with rare diseases.
There are a few major catalysts to be aware of with FOLD.
One, the company is moving closer to potentially receiving US FDA approval for its AT-GAA (cipaglucosidase alfa/miglustat) treatment of late-onset Pompe disease.
Pushing things along, Amicus recently noted, “The U.S. Food and Drug Administration (FDA) has very recently completed the required pre-approval inspection of the WuXi Biologics manufacturing site in China. The Company believes the comments and observations received at the close of the FDA inspection are all addressable and continues to expect regulatory approval of AT-GAA in the U.S. in the third quarter of 2023.”
With that inspection now complete, the company now moves closer to US FDA approval.
Two, the company is on track to achieve non-GAAP profitability in the second half of 2023, as noted in its earnings release. Three, its treatment for Fabry patients is the first and only approved oral treatment, according to its investor deck. Better, the treatment brings in over a quarter billion dollars in annual revenue, with expectations it can reach $500 million.
Earnings have been solid, as well.
First quarter revenue was up 10% year over year from $78.7 million. Its GAAP operating expenses of $117.0 million for the first quarter 2023 decreased as compared to $146.5 million for the first quarter 2022. Net loss was $52.9 million, or $0.18 per share in the first quarter 2023, an improvement from a net loss of $85.3 million, or 30 cents a share, year over year.
Analysts like the stock here, too.
UBS analysts, for example, just raised their price target from $15 to $17, with a buy rating. Bank of America also raised its price target to $17 from $16, with a buy rating.
Viking Therapeutics (VKTX)
Or, take a look at Viking Therapeutics (VKTX), a $1.55 billion biotech company with a promising pipeline of blockbuster drugs.
One of those treatments is VK2809 for NASH, or non-alcoholic steatohepatitis, a liver disease that could impact as much as 5% of the global population.
Better, the company just announced positive top-line results from Phase 2b clinical trials, achieving its primary endpoint, with patients receiving VK2809 experiencing significant reductions in liver fat content from baseline to Week 12 as compared to a placebo. Further success could expose VKTX to a potential $16.3 billion NASH market by 2030.
Even more encouraging, analysts defended VKTX following a sell-off on Eli Lilly’s retatrutide for non-alcoholic fatty liver disease (NAFLD).
According to Seeking Alpha:
“Retatrutide, which belongs to a drug class known as incretins, normalized liver fat in patients with NAFLD in a small Phase 2 trial, LLY said, sparking a selloff in liver disease drug developers. Citing a potential misinterpretation of data, William Blair says the firm would be buyers on VKTX following what it called a disproportionate and unfounded selloff.”
Its other treatment – VK2735 — could be a blockbuster treatment for obesity, which could expose VKTX to a potential $13.2 billion obesity treatment market. VK2735 can lead to a feeling of fullness between the brain and the stomach, which can potentially lead to weight loss. In fact, Phase 1 trials found that patients treated with VK2735 lost 6% in mean body weight, as compared to a placebo.
Setting itself up for further success, Viking also initiated a Phase 1 clinical study to evaluate an oral version of VK2735. By doing so, patients now have a choice between an oral dosage of VK2735 and a subcutaneous dosage. A potential oral therapy could have a major advantage over injectables from companies like Eli Lilly, for example.
Analysts at H.C. Wainwright just raised its price target on VKTX to $33 thanks to Viking’s obesity drug. Roth MKM just raised its price target to $24 from $19 on the obesity angle, too.
Plug Power (PLUG)
Outside of biotech, we’re also finding a severely undervalued opportunity in Plug Power (PLUG).
The company is building an end-to-end green hydrogen ecosystem, from production, storage and delivery to energy generation, to help its customers meet their business goals and decarbonize the economy. In creating the first commercially viable market for hydrogen fuel cell technology, the company has deployed more than 60,000 fuel cell systems and over 180 fueling stations, more than anyone else in the world.
With plans to build and operate a green hydrogen highway across North America and Europe, Plug is operating a Gigafactory to produce electrolyzers and fuel cells, and is commissioning multiple green hydrogen production plants that will yield 500 tons of liquid green hydrogen daily by year end 2025.
Even more exciting, Plug Power could be exposed to a potential $12 trillion hydrogen market, as highlighted by Goldman Sachs and Bank of America.
Plus, Plug Power has been busy signing major deals all over the world. For example, it just secured an order for 100 megawatts (MW) of proton exchange membrane (PEM) electrolyzers. This is the largest announced project in the oil and gas sector in Europe. It was also just selected to supply two 5-megawatt proton exchange membrane electrolyzer systems for green hydrogen projects in Tasmania, Australia.
It also struck a deal with Avina Clean Hydrogen. “To help California reach its ambitious climate goals of slashing greenhouse gas emissions 85 percent by 2045, Avina will work with fleet operators and refueling station providers to provide green hydrogen supplied by Plug’s electrolyzers,” the company said in a separate news release.
Even better, the company just laid out a new path to growth and more deals.
“The company’s ambition is to produce more than 2,000 tons of hydrogen per day from its green hydrogen network including its first kiloton-scale plant by 2030,” Plug said in a press release. “Also, by 2030, Plug aspires to deploy one gigawatt of stationary power products, ship five gigawatts of electrolyzers per year, and deliver 500,000 fuel cell-powered forklift trucks.”
With a good deal of patience, and a potential $12 trillion opportunity in front of it, Plug Power is another “must own” stock for your portfolio.
SunPower (SPWR)
Another promising, and undervalued stock to consider is SunPower (SPWR), a $1.98 billion provider of photovoltaic solar energy generation systems and battery energy storage products.
There has never been a better time to invest in solar power, and related stocks like SPWR.
As the world fights climate change, it’s ramping up spending on solar, for example. In fact, according to the International Energy Agency (IEA), the world’s annual pace of solar installations is expected to quadruple in about eight years, as noted by PV Magazine.
Plus, the IRA, or the Inflation Reduction Act offers tax credits to companies involved in solar power installations. The Defense Production Act has encouraged solar panel production. And countries have been busy investing in and promoting the use of solar energy.
Helping, Raymond James analyst Pavel Molchanov has a $21 price target on the SPWR stock, which more than doubles current prices. He also upgraded SPWR to a strong buy rating from an outperform rating. Plus, as noted by CNBC, the analyst added:
“The only real concern about SunPower specifically is its above-average exposure to California: the state accounted for half of SunPower’s customer additions in 2022. This overweight to California has not impeded SunPower from continuing to grow in 2023, having guided to 90,000-110,000 incremental customers, up 20% y/y. Even if the increase ends up being only 10%, it would still be ahead of the U.S. market overall.”
While first quarter earnings were nothing to write home about, the company does see improvements down the road. All thanks to a backlog, as it secures new customers.