We recently compiled a list of the 10 Worst Middle East and Africa Stocks To Buy According to Short Sellers. In this article, we are going to take a look at where UroGen Pharma (NASDAQ:URGN) stands against the other Middle East and Africa stocks.
Moderate Growth Amidst Challenges
According to the IMF’s Middle East and North Africa Economic Update from April 2024, the MENA region is expected to see moderate growth of 2.7% in 2024, up from 1.9% in 2023. Both oil-importing and oil-exporting countries in the region are projected to grow at similar rates, with the gap between the Gulf Cooperation Council (GCC) economies and developing oil importers (excluding Egypt) expected to be around 1%. The region’s GDP per capita is forecasted to increase by only 1.3% in 2024, primarily driven by the GCC nations. However, ongoing conflicts continue to weigh on the region’s economic activity, especially in Palestine. Gaza’s economy, for instance, saw an 86% decline in Q4 2023 compared to the same period in 2022. Trade disruptions, notably through the Suez Canal, have also affected regional and global commerce.
Over the last decade, many MENA economies have faced rising debt-to-GDP ratios, particularly among oil-importing countries, which struggle to reduce these ratios due to high oil prices. The inability to lower debt through inflation, exacerbated by exchange rate fluctuations and off-budget factors (stock-flow adjustments), underscores the need for greater debt transparency. In contrast, oil-exporting nations tend to see smaller increases in debt-to-GDP ratios during periods of high GDP growth, and in some cases, a decrease.
Meanwhile, private equity (PE) and venture capital (VC) investments have gained momentum in the Middle East and Africa, reflecting a shift in investment trends. Data from Preqin and the Dubai International Financial Centre (DIFC) reveals that about 65% of regional investors plan to maintain or increase their exposure to private equity in 2024, with 56% expressing similar interest in venture capital.
Despite the challenges posed by geopolitical tensions, venture capital continues to play a crucial role in the region’s investment landscape. Investors remain optimistic, with many reporting that their PE and VC investments have met or exceeded expectations. Key sectors attracting interest include fintech, technology, healthcare, and infrastructure.
As the region navigates the complexities of economic growth, debt management, and investment trends, it’s clear that there are both challenges and opportunities on the horizon. Investors remain optimistic about the region’s potential, however, it’s essential for policymakers to prioritize debt transparency, economic diversification, and infrastructure development to unlock the full potential of the MENA region’s economies. With that in context, let’s take a look at the 10 worst Middle East and Africa stocks to buy according to short sellers.
Our Methodology
For this article, we used a Finviz stock screener to find 20 large companies in the Middle East and Africa, by market cap. From that list, we shortlisted companies that have the highest percentage of shares outstanding that were sold short. The list is sorted in ascending order of their short interest. We also mentioned the hedge fund sentiment around each stock.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A scientist examining a sample of hydrogel in a laboratory setting.
UroGen Pharma (NASDAQ:URGN)
Short Interest as % of Shares Outstanding: 16.87%
Number of Hedge Fund Investors in Q2 2024: 25
UroGen Pharma (NASDAQ:URGN) is an Israeli biopharmaceutical company specializing in solutions that treat urothelial and specialty cancers. The company is developing non-surgical options that enhance patient outcomes.
The company has developed RTGel, a reverse-thermal hydrogel, that delivers medications directly to the urinary tract and has the potential to improve the therapeutic profiles of existing drugs. The company’s flagship product, JELMYTO, leverages this RTGel technology and has demonstrated remarkable clinical results, including a 58% complete response rate for low-grade upper tract urothelial cancer. This innovation is noted for its durable, long-lasting effects, making it a significant advancement in treating cancer.
UroGen Pharma’s (NASDAQ:URGN) UGN-102 is currently under FDA review and targets a $5 billion market for low-grade intermediate-risk non-muscle invasive bladder cancer (LG-IR-NMIBC). Approval for UGN-102 is anticipated as early as Q1 2025. The company will provide 12-month durability of response results from patients who exhibited a complete response at three months following six weekly instillations of UGN-102. Additionally, UroGen Pharma (NASDAQ:URGN) is developing UGN-301, a potential treatment for high-grade bladder cancer.
If approved, UGN-102 will position UroGen Pharma (NASDAQ:URGN) as a leader in the urological oncology space and help the company enhance its revenue potential and strengthen its position as an innovator in bladder cancer therapies.
While 16.87% of the company’s shares are shorted, 25 hedge funds have maintained a bullish sentiment on the stock as of the second quarter with stakes worth $329.33 million. Adage Capital Management is the largest shareholder in the company and owns stocks worth $55.37 million.
Overall URGN ranks 3rd on our list of the worst Middle East and Africa stocks to buy according to short sellers. While we acknowledge the potential of URGN as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than URGN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.