Everyone’s searching for that next great Penny Stocks To Buy. With markets trading near all-time highs, finding a stock with huge potential for return is certainly difficult.
But not impossible…
There are always stocks ready to take off, just waiting for investors to buy up shares. Amazingly, there’s one out there now that’s just barely preparing to take off- even after a huge news announcement last month that can change the course of the diabetes industry forever.
If you’ve invested in biotech stocks in the past, there’s a better chance than not you’ve been burned. Waiting for the various stages of testing and trial results to be announced can be trying. Then there’s the almighty FDA approval of a commercial product which always send a stock on a roller coaster ride.
Shareholders get tossed about pretty hard and many times those very investors who would have been rewarded if they had just held on in the bad times end up brutally burned. They end up giving up when short sellers crush their dreams causing them to do what they believe is the “conservative” thing – sell their shares before they were worthless.
But this time around for shareholders in MNKD, things are looking up. There are 3 reasons why this penny stock is poised to take off. And for starters, we will see a sharp move upon the release of the FDA’s approval decision of Afreeza.
But should you be investing in this company now?
I say there’s no doubt about it. Here are those three reasons I mentioned…
1. This penny stock is in position to benefit from the massive short position that still remains in the stock. Currently, over 28% of the float… or more than 65 million shares of MNKD are being held short. I just don’t know what in the world these folks are thinking. The FDA is on the verge of approval of a blockbuster drug. And this very product about to be approved could revolutionize the multi-billion insulin market.
Even if you believe that the nearly unanimous voting by the FDA’s advisory committee earlier this year won’t hold any weight in the FDA’s decision, where is the financial risk management? The upside potential for MannKind on good news, which by the way is widely expected (just read other expert opinions)… is massive.
2. If the FDA announces approval of Afreezza, MNKD will then need to find a big-phara partner for the product. Can you imagine anyone currently in the diabetes marketplace not wanting to get in on this new insulin tech?
It would be like massive oil companies ignoring clean, natural gas and other alternative fuels they can resell under their current business model (or a similar one). It would be bad business to ignore this product. It seems clear to me that some pharma giant will pickup a piece of MannKind’s product – and the big pharma company that sees this inevitability can only hope there isn’t a biding war already ensuing…
3. If and when all these event come to pass, investors will want confirmation that Afreeza is a commercial success. Will patients switch over to the certain-to-be more expensive… and more than likely not-covered-by-insurance Afreeza. That’s the billion dollar question!
But given the reasons stated by the FDA’s advisory committee as to the populations that this drug can help, we may end up seeing a government subsidy on it. Hell, if that little blue pill can end up covered by Medicare, I sure hope a life altering inhaler-based insulin would end up making the cut!
I believe MNKD could see a short-term move from $7 to $11 immediately following a positive FDA decision. Additionally, the announcement of a commercial partner could drive this penny stock even higher – say to the tune of $13-$15 per share.
And after the first initial quarter where Afreeza sales are tracked by the company, we will see the stock move pretty aggressively once again.
Even as positive as I am on this stock, trying to pretend I can see that far out would be absurd…
Again, what if this stock pops even harder due to the massive 28% short position? Well, then it’s a whole different ball game, and my conservative price targets could be out the window for sure! However, should the FDA fail to approve Afreeza at this stage of the game – the shorts could be proven right, and the stock could absolutely tank.
But from what I’ve seen so far this year, and heard during the advisory board’s meeting… I wouldn’t bet against MNKD from here out.
Next year this time, I could see MNKD trading north of $20 per share. But only time will tell…
PS. I’m personally long this stock- and you should be too. There are fewer “good bets” in the penny stock world than MNKD right now.
Keeping you one step ahead,