We recently compiled a list of 7 Best Russell 2000 Stocks to Buy According to Analysts. In this article, we will look at where Capricor Therapeutics, Inc. (NASDAQ:CAPR) ranks among the best Russell 2000 Stocks to Buy According to Analysts.
The investor sentiment remains bullish toward the market, especially since the Fed’s recent decision to cut interest rates by half a percentage point, which is seen as a move to sustain economic health rather than a response to economic distress.
Moreover, the recent inflation report also showed positivity. After the first rate cut since March 2020, the August inflation report showed that the Personal Consumption Expenditures (PCE) price index rose 2.2%, the lowest level since early 2021. Core PCE, which excludes food and energy, also rose 0.1% for the month and recorded a 12-month increase of 2.7%.
While the market is reacting positively to the news, some experts are slightly worried about the market trends.
Bernstein’s Insights on Market Trends
Richard Bernstein, CEO of Richard Bernstein Advisors, joined CNBC ‘The Exchange’ on September 23 to discuss what’s happening in the market. He mentioned that stocks of small companies are not doing as well as riskier investments like cryptocurrencies. He is worried that the Federal Reserve is putting too much money into the economy, and it is not being spent wisely.
However, Bernstein believes that small and mid-sized companies will grow a lot by the end of the year, especially compared to the slower growth of big tech companies, such as the “Magnificent Seven.” Bernstein is also concerned that the Fed is lowering interest rates even though the profits are getting better, which might make the situation worse.
When asked if it’s time to focus on big tech stocks, Bernstein said many investors are doing that because of the current market trends. He thinks smaller companies offer better value and growth in the long run. He criticized risky investments like cryptocurrencies, saying they take money away from important areas like infrastructure, which could harm the economy. He warned that financial bubbles, where prices go too high too fast, can be just as harmful as regular inflation.
The bullish sentiment around small-cap stocks is also shared by Greg Tuorto, a portfolio manager at Goldman Sachs Asset Management, as we discussed his interview with Yahoo Finance in our article, 7 Cheap Small-Cap Stocks To Buy Now. Here is an excerpt from it:
“He [Greg Tuorto] highlighted several supportive factors for small caps, including a stable U.S. economy and opportunities in sectors like technology, healthcare, and consumer industries. Despite recent underperformance, he believes small caps are positioned for a rebound, driven by strong earnings growth rather than multiple expansions.
Tuorto also emphasized the potential for small caps to outperform large caps in 2025, given that their earnings outlook appears more favorable.”
Our Methodology
For this article, we made a list of the 35 biggest best weekly performers of the small-cap index in the week ending September 27. Next, we narrowed our list of 7 stocks with the highest average analyst price target upside. The stocks are listed in ascending order of their price target upside. We also added the hedge fund sentiment around each stock, which was taken from Insider Monkey’s database of over 900 elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? 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).
Capricor Therapeutics, Inc. (NASDAQ:CAPR)
Average Price Target Upside: 291.96%
Number of Hedge Fund Holders: 6
One of the best Russell 2000 stocks, Capricor Therapeutics, Inc. (NASDAQ:CAPR) is a biotechnology company dedicated to developing innovative cell and exosome-based therapies. They are aimed at treating and preventing muscular diseases and other select conditions.
At the heart of its efforts is deramiocel (CAP-1002), an allogeneic cell therapy currently advancing through Phase 3 clinical trials for Duchenne muscular dystrophy (DMD). The groundbreaking therapy harnesses specialized cells sourced from healthy human heart tissue, which have demonstrated significant potential in repairing damaged muscle and improving heart function. The cells support the immune system and help minimize scar tissue formation, which promotes healing in both cardiac and skeletal muscles.
The ongoing Phase 3 trials for deramiocel are critical as they seek to validate the therapy’s safety and eficacy for patients suffering from DMD. Previous studies have already indicated that this treatment can substantially slow the progression of muscle deterioration and improve cardiovascular health over time.
The positive data could play a crucial role in securing regulatory approval and offering a much-needed solution for a disease that currently lacks effective treatments for its cardiac complications.
In addition to deramiocel, Capricor (NASDAQ:CAPR) is exploring its exosome technology as a next-generation therapeutic platform. The technology aims to create exosomes capable of delivering nucleic acids and proteins to combat a range of diseases.
The stock is a Buy as per the coverage of 5 analysts. As of September 27, the average price target of $39.00 represents an upside of 291.96% to the stock’s current price.
On September 24, the company announced its plans to file a Biologics License Application (BLA) with the U.S. Food and Drug Administration, utilizing existing data related to cardiac health and natural history for patients diagnosed with DMD cardiomyopathy.
It is also planning a post-approval expansion to include treatment for DMD skeletal muscle myopathy. By combining trial cohorts for a more comprehensive study and delaying the unblinding of specific data, the company shows its commitment to expediting a novel treatment in a space with significant unmet needs.
Recent analyst activity has further boosted confidence in its prospects. On September 25, Oppenheimer raised the price target on Capricor (NASDAQ:CAPR) to $43 from $15 and kept an Outperform rating.
It came after the favorable regulatory update and suggests that deramiocel is on a well-defined path toward FDA approval by the latter half of 2025 for addressing cardiomyopathy associated with DMD. The firm expects high demand for this first-of-its-kind therapy.
6 hedge funds tracked by Insider Monkey held positions in Capricor (NASDAQ:CAPR) at a stake value of $4.156 million in Q2. Millennium Management has increased its stake in the company by 64% to 479,510 shares worth $2.287 million and is the most significant shareholder, as of the second quarter.
Overall CAPR ranks 3rd on our list of best Russell 2000 stocks to buy according to analysts. While we acknowledge the potential of CAPR 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 CAPR 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 on Insider Monkey.