Biotech Penny Stocks Novadel and Insmed
by Andrew Vaino
A couple of biotech penny stocks I've mentioned recently have had pretty good runs. I touted Novadel (NVD) in the Newsletter for the week of November 11. NVD opened the following Monday at $1.34, and has been as high as $1.95 since.
I mentioned Insmed (INSM) in the Daily Blog on November 17th, when it was trading at $1.40. INSM has climbed as high as $1.98 recently.
I still very much like these two stocks, but feel some caution is in order. Prices for both have "softened" in the past two days. In the case of INSM I think this is just jitters over the outcome of their patent trial: I did note this was highly speculative.
In the case of NVD I am wondering if a follow-on offering of stock is going to happen soon. NVD filed a proxy statement for their January Shareholders Meeting that would increase the number of authorized shares from 100M to 200M. Note, NVD currently has only 49M shares outstanding, less than half what they are currently authorized. Net Assets for NVD are around $10M, so, with the stock trading near 3-year highs a stock offering would not be a huge surprise. When this will be is impossible to gauge.
I think protective stops for both INSM and NVD might be a good idea. Even set as low as $1.60 profits of 15% and 20%, repsectively, would still be had---not bad for less than a month. To be clear, I still very much like NVD long term, but think maybe there's a chance to make some money with some deft timing. I also like INSM, but see it as just a trade based on the current trial.
A couple of biotech penny stocks I've mentioned recently have had pretty good runs. I touted Novadel (NVD) in the Newsletter for the week of November 11. NVD opened the following Monday at $1.34, and has been as high as $1.95 since.
I mentioned Insmed (INSM) in the Daily Blog on November 17th, when it was trading at $1.40. INSM has climbed as high as $1.98 recently.
I still very much like these two stocks, but feel some caution is in order. Prices for both have "softened" in the past two days. In the case of INSM I think this is just jitters over the outcome of their patent trial: I did note this was highly speculative.
In the case of NVD I am wondering if a follow-on offering of stock is going to happen soon. NVD filed a proxy statement for their January Shareholders Meeting that would increase the number of authorized shares from 100M to 200M. Note, NVD currently has only 49M shares outstanding, less than half what they are currently authorized. Net Assets for NVD are around $10M, so, with the stock trading near 3-year highs a stock offering would not be a huge surprise. When this will be is impossible to gauge.
I think protective stops for both INSM and NVD might be a good idea. Even set as low as $1.60 profits of 15% and 20%, repsectively, would still be had---not bad for less than a month. To be clear, I still very much like NVD long term, but think maybe there's a chance to make some money with some deft timing. I also like INSM, but see it as just a trade based on the current trial.
posted by Nico at
6:42 PM
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