2 Hot Analyst Reads For Tuesday, October 23rd

A synopsis of a couple of late analyst calls that could buoy these small cap biotech stocks in trading tomorrow

“My husband and I have never considered divorce... murder sometimes, but never divorce.” ― Joyce Brothers

Sign Up Free Today: To comment on this article or to get and read these full articles free every day before the market open to your ‘in box’ as published, just hit the + Follow button in the upper right-hand corner of this site.

After deep early losses, the biotech sector has bounced back strongly. The SPDR Biotech ETF (XBI) is now up one percent as we head into the last trading hour of the day.

Hopefully we can end a day for once in the green here in October. Here are two small biotech stocks getting some analyst praise this afternoon.

Cantor Fitzgerald really likes Neos Therapeutics (NEOS) today. They reissue their Buy rating and $20 price target (the stock currently trades just over $4.00 a share) and the following commentary.

The peak sales potential of Neos’s ADHD platform and its pipeline are underappreciated, in our view. We think continued success with the uptake of: Adzenys ER in 2018+ as well as pipeline advancements will drive upwards earnings revisions to levels not reflected in the consensus and move Neos’s stock higher. Valuation Summary We use a blend of DCF and multiples (EV/EBITDA) analysis to get to our 12-month price target of $20.”

We agree this small cap biopharma is deeply undervalued even if we are not as optimistic as Cantor. The company did receive a lowball hostile $10.25 a share takeover offer from PDL Pharma earlier this year.

Free Report Available: Many of the names profiled here make suitable Buy-Write candidates**.** My colleagues at Investors Alley have published a free report entitled '10 Simple Rules To Trade Options Like A Pro' for those that want to learn more about profitably adding options strategies to their investing 'toolbox'. It is now available free via download HERE.

A different analyst at Cantor likes Intra-Cellular Therapies (ITCI). They reiterated their Buy rating and $32 price target and offer this view.

Core to our investment thesis is the complete NDA filing for lumateperone in schizophrenia, which we believe has a high probability of approval based on two large studies that met their primary endpoints and a positive pre-NDA meeting with FDA. In addition, Luma’s differentiated pharmacology results in tolerability and a benign safety profile unlike other approved APs.”

Lumateperone has an FDA decision date scheduled at the end of this year. I would look for the stock to run up somewhat into that event.

Are you a true 'contrarian' investor? Looking for some attractive small biotech stocks to buy during the recent dip in the sector during October? We are enabling free two week trials into The Biotech Forum at this time. Come browse our investment research archives, peruse our 20-stock model portfolio, and join us on Live Chat where scores of seasoned biotech investors swap trading ideas, recent news and option strategies during the trading day. To initiate your free 14 day trial, just click here.