U.S. inflation soared to 9.1% in June, surpassing an 8.8% estimate by Dow Jones and marking the fastest pace since November 1981. With another 75 bps federal rate hike seemingly inevitable in July, recession possibilities are rapidly growing.
However, according to the U.S. Bureau of Labor Statistics, the unemployment rate remained at 3.6% in June. Job growth accelerated faster than expected in June, with non-farm payrolls up 372,000 in the month, compared with the 250,000 Dow Jones estimate.
“The strong 372,000 gain in non-farm payrolls in June appears to make a mockery of claims the economy is heading into, let alone already in, a recession,” said Andrew Hunter, senior U.S. economist at Capital Economics.
Given this backdrop, we think penny stocks Annexon, Inc. (ANNX), Aprea Therapeutics, Inc. (APRE), Yatsen Holding Limited (YSG), and Endo International plc (ENDP), which have outperformed the S&P 500’s marginal gains over the past month, could be worth adding to your watchlist now.
Annexon, Inc. (ANNX)
ANNX, a clinical-stage biopharmaceutical company, discovers and develops therapeutics for autoimmune, neurodegenerative, and ophthalmic disorders. The company is developing a pipeline of diversified product candidates across multiple mid to late-stage clinical trials.
On June 7, 2022, ANNX announced promising final data from its open-label Phase 2 clinical trial of ANX005 in patients with Huntington’s disease, a fatal ailment with zero established advanced treatment. Final approval of the product will mark a milestone achievement for the company.
ANNX’s cash and cash equivalents came in at $112.83 million for the period ended March 31, 2022, compared to $74.84 million for the period ended December 31, 2021. Its total liabilities came in at $49.95 million, compared to $55.13 million for the same period.
Analysts expect ANNX’s EPS to grow 38.6% per annum for the next five years.
The stock has gained 85.1% over the past three months and 35% over the past month to close the last trading session at $4.59.
Aprea Therapeutics, Inc. (APRE)
APRE focuses on developing and commercializing novel cancer therapeutics that target DNA damage response pathways. Its lead program is ATRN-119, a Phase 1-ready small molecule ATR inhibitor being developed for solid tumor indications.
On May 16, 2022, APRE completed the acquisition of Atrin, a privately held biotechnology company specializing in oncology research. With this acquisition, APRE aims to shift its primary focus to the ATR inhibitor ATRN-119 and enhance shareholder value.
APRE’s net loss decreased 17.9% year-over-year to $7.94 million for the first quarter ended March 31, 2022. Its loss per share decreased 21.7% year-over-year to $0.36. Moreover, its total liabilities came in at $6.75 million for the period ended March 31, 2022, compared to $7.32 million for the period ended December 31, 2021.
Analysts expect APRE’s EPS to improve 36.2% year-over-year in 2022.
The stock has gained 24% over the past month to close the last trading session at $0.99.
Yatsen Holding Limited (YSG)
Headquartered in Guangzhou, China, YSG and its subsidiaries develop and sell beauty products under the Perfect Diary, Little Ondine, Pink Bear, Abby’s Choice, GalÃnic, DR.WU, Eve Lom, and EANTiM brands in the People’s Republic of China.
On May 24, 2022, Mr. Jinfeng Huang, YSG’s Founder, Chairman, and CEO, said, “We remain focused on executing our strategy of building our brands, investing in R&D, and pursuing sustainable growth in the first quarter of 2022. We have already observed early progress, including the growing skincare business and narrowing net loss and non-GAAP net loss.”
For the first quarter ended March 31, 2022, YSG’s net loss decreased 8.3% year-over-year to $45.89 million. Its loss per share came in at $0.02, down 7.7% year-over-year. Also, its non-GAAP net loss decreased by 33.6% year-over-year to $24.54 million.
Analysts expect YSG’s revenue to increase 11.8% year-over-year to $685.67 million in 2023. Its EPS is expected to improve 29.4% year-over-year in 2023.
The stock has gained 119.3% over the past month to close the last trading session at $1.46.
Endo International plc (ENDP)
Headquartered in Dublin, Ireland, ENDP, a specialty pharmaceutical company, manufactures and sells generic and branded pharmaceuticals in the United States and internationally. Its segments are Branded Pharmaceuticals; Sterile Injectables; Generic Pharmaceuticals; and International Pharmaceuticals.
On June 13, 2022, ENDP’s subsidiary Endo Ventures Limited entered into an agreement with Taiwan Liposome Company, Ltd., a clinical-stage specialty pharmaceutical company, to commercialize TLC599, a TLC investigational product for treating osteoarthritis knee pain.
ENDP’s total specialty products revenues came in at $149.06 million for the first quarter ended March 31, 2022, up 4% year-over-year. Its cash, cash equivalents, and restricted cash came in at $1.59 billion, up 2% year-over-year.
ENDP surpassed EPS estimates in each of the four trailing quarters.
The stock has gained 36% over the past month to close the last trading session at $0.41.
ANNX shares were trading at $4.45 per share on Thursday morning, down $0.14 (-3.05%). Year-to-date, ANNX has declined -61.27%, versus a -21.12% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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