There is a common misconception that the vast majority of biotech stocks worthy of investment are priced well above the $10 mark. Some ignore the industry, assuming most of the stocks are traded at several hundred dollars per share. However, if you do your homework, you will find some affordable biotech stocks that can move significantly higher in the near future.
Suppose you have been hesitating to invest in biotech stocks due to the unpredictable nature of the industry or the comparably high price points. In that case, it is time to reassess your strategy. Add a couple of affordable biotech stocks to your portfolio, be patient, and your diversified holdings might work out to your benefit.
Here is a quick look at two biotech stocks priced under $10: Champions Oncology (CSBR) and Ovid Therapeutics (OVID).
Champions Oncology (CSBR)
CSBR develops advanced tech solutions for the personalized development/use of oncology drugs. CSBR has a forward P/E ratio of 47.28. This is an elevated ratio that indicates the stock might be overpriced.
CSBR has an overall grade of B, translating into a Buy rating in our POWR Ratings system. The stock has a grade of B in the Sentiment and Growth components. CSBR's Sentiment rank is ahead of more than 90% of all stocks traded on United States markets. Click here to find out how CSBR fares in the rest of the components, including Value, Momentum, Stability, and Quality.
Of the 494 publicly traded companies in the Biotech industry, CSBR is ranked 16th. You can find other top stocks in this industry by clicking here. Based on the average analyst price target, analysts believe CSBR has more room to run. The average analyst target price for the stock is $15. If CSBR hits this price, it will have increased by nearly 60%. The three analysts that cover the stock rate it a Buy.
Click here to checkout our Healthcare Sector Report for 2021
Ovid Therapeutics (OVID)
OVID is a biopharmaceutical company that makes therapies for individuals who suffer from rare neurological disorders. The company is currently developing a drug to treat the symptoms of Fragile X syndrome and Angelman syndrome. OVID is also working with Takeda Pharmaceutical (TAK) to develop drugs to treat epileptic encephalopathies.
OVID has an overall grade of B and a Buy rating in our POWR Ratings system. The stock has a grade of A in the Value component and Bs in the Sentiment and Quality components. Click here to find out how OVID fares in the rest of the components, including Momentum, Growth, and Stability. Of the nearly 500 publicly traded companies in the Biotech industry, OVID is ranked 15th.
Analysts view OVID as undervalued, setting an average target price of $4.88 for the stock. If OVID hits this price target, it will have increased by nearly 24%. Three analysts rate the stock a Strong Buy or Buy.
CSBR shares were unchanged in premarket trading Thursday. Year-to-date, CSBR has declined -13.62%, versus a 17.07% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management.
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