We recently compiled a list of the 7 Best Rising Penny Stocks To Invest In Now. In this article, we are going to take a look at where Allogene Therapeutics, Inc. (NASDAQ:ALLO) stands against the other rising penny stocks.
Fed’s Rate Cut Sets the Stage for a Strong Q4
In an episode of Market Storylines on the Inside the Icehouse Podcast feed by Intercontinental Exchange, Jay Woods, Chief Global Strategist at Freedom Capital Markets, discussed Fed rate cuts and the Q4 outlook. Woods discussed the latest Fed rate cut and said that the market absorbed the rate cuts quite positively, with the S&P 500 reaching new all-time highs.
Woods mentioned that, historically, when markets hit new highs in September, the fourth quarter tends to perform well, especially in election years. As the fourth quarter approaches, he highlighted that sectors such as real estate, utilities, and industrials have led the market in the third quarter, while technology has lagged. However, it may rebound in Q4.
Woods also emphasized the importance of upcoming economic data, including the ISM manufacturing report, jobless claims, and the U.S. unemployment report, which will give insight into the labor market and the potential impact of the rate cuts.
Small and Mid-Cap Stocks Set for Major Gains
Ryan Dietrich, Chief Market Strategist at Carson Group, joined Yahoo Finance for an interview on September 29, where he expressed optimism about the stock market’s future. He believes the rate cut was necessary and should have been smaller earlier.
He mentioned that the labor market is showing signs of slowing, with initial jobless claims at a four-month low, and forward earnings for the S&P 500 improving. However, he does not foresee a recession.
Dietrich highlighted that historically, rate cuts near market highs have been followed by strong market performance, with an average annual return of around 14%. He thinks the broader market could see 12-15% gains in the next year, while small and mid-cap stocks might outperform with over 20% returns. His firm is especially focused on mid-cap stocks, which tend to perform well after rate cuts.
While the upcoming election may cause some volatility, especially in October, Dietrich remains confident that markets will stabilize afterward, as they usually react better once uncertainty passes. He expects a strong end-of-year rally and advises investors to remain diversified and take advantage of any market weakness.
Our Methodology
For this article, we used stock screeners to identify over 60 stocks under $5 with a 1-month share price gain of over 10%, as of September 30. The best rising penny stocks are listed in ascending order of their hedge fund sentiment, 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).
A biotechnologist in a laboratory testing an Immuno-oncology treatment.
Allogene Therapeutics, Inc. (NASDAQ:ALLO)
1-Month Stock Price Performance: 15.94%
Number of Hedge Fund Holders: 23
Allogene Therapeutics, Inc. (NASDAQ:ALLO) is a company focused on developing and commercializing advanced cancer treatments through genetically engineered allogeneic T-cell therapies. It specializes in CAR T cell therapy and seeks to revolutionize how certain blood cancers are treated.
A key product, UCART19, is designed for both children and adults suffering from CD19 positive B-cell acute lymphoblastic leukemia. In addition to UCART19, it is advancing other CAR T cell therapies, including cemacabtagene ansegedleucel, which targets a similar protein to treat large B-cell lymphoma.
It is currently undergoing a Phase 1b clinical trial for chronic lymphocytic leukemia, further expanding Allogene Therapeutics, Inc.’s (NASDAQ:ALLO) portfolio in the blood cancer segment. Additionally, the company is actively testing ALLO-715 and ALLO-605, both targeting multiple myeloma, which are also in Phase 1 clinical trials.
As of June 30, it reported a cash position of $444.6 million in cash, cash equivalents, and investments. The financial strength is important for funding ongoing operations and clinical trials, with expectations that this cash runway will support activities into the second half of 2026.
Moreover, the company maintains its guidance and sees a decrease of approximately $200 million in cash reserves throughout 2024.
Lastly, Allogene Therapeutics, Inc. (NASDAQ:ALLO) has a consensus Buy rating from 18 analysts. The average price target of $9.50 represents an upside of 226.46% to the stock’s current price, as of September 27.
Overall ALLO ranks 4th on our list of the rising penny stocks to invest in now. While we acknowledge the potential of ALLO 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 ALLO 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.