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Hey folks, Jeff Bishop here, and I have to say: I love stocks that are hovering around a dollar. |
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They're my bread and butter when I'm looking for big upward moves on non-options plays. |
There's just something magic about that price range… |
Magic… or is it? |
It's not just because I can buy a lot of shares for the price of a nice dinner. |
If you've spent any time watching and researching Nasdaq-listed stocks at that valuation, you know that if they drop below the $1.00 mark for 30 consecutive business days, they are put on notice that they risk being delisted, which is a major blow to a company. |
REREAD THAT 👆 , IT'S IMPORTANT INFO FOR TRADERS. |
If you didn't know it, you can read all about that here. It's an interesting thing most people don't know about unless they are hardcore small-stock trader like I am. |
Most companies will naturally pull out all the stops to prevent this from happening. Company insiders are likely to cling to their shares and new share issuances are unlikely. |
The upshot for profit-seekers is a great, low-price buying opportunity with something of a floor of resistance. |
Of course, savvy investors must exercise due diligence and ensure the company is fundamentally sound… |
With that in mind, today's Bright Idea 💡 is a company that should definitely be on your radar 📡: |
Citius Pharmaceuticals, Inc. (Nasdaq: CTXR) |
I brought this late-stage pharmaceutical company to your attention back in early March when I said it was in a very tight "bull flag" formation that could lead to a big move… |
Sure enough, after a brief wind-up, it rattled off a 58% gain in just five weeks (not bad, huh?). |
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The stock price has pulled back since then, but I've kept it on my watchlist since it's around that special $1.00 mark. |
Looking at the chart yesterday, I noticed this trend: |
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As you can see, so far this year, every time CTXR has based at a new level, it makes a bounce (sometimes those have been nearly triple-digit bounces!) |
If that level is below $1.00, the percentage move has been even bigger too.. |
Well, have a look at where CTXR is basing right now! |
The past doesn't guarantee the future, of course, but it can be suggestive. A deeper dive into CTXR gives more reasons for optimism… |
For starters, I found an article about the company from three days ago. |
In it, we learn that the company has been shrinking the gap between loss and breakeven, and that three industry analysts covering the company are projecting its final loss in 2024 before – get this – a whopping $45 million in profits in 2025 💰(analyst estimates). |
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At a current market cap of around $135 million (according to Yahoo!), that's a dramatic projection for earnings per share (EPS). |
Another critical factor to look at when evaluating these small pharma companies is what their cash burn 🔥 looks like relative to their reserves. |
According to this August 14 press release, the company had $33.3 million in cash and cash equivalents as of June 30, and it had extended its "cash runway" to August 2024. |
That means its runway extends to where analysts project its revenue will pick up… a very good sign. |
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And as the article mentioned above notes: |
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This is especially good news in our era of high interest rates; it means the company is spending its money on salaries and research and not on loans and interest. |
In addition, while the company has a diverse pipeline of developing therapies, its most promising one, Mino-Lok® — an antibiotic treatment to salvage catheters in patients with catheter-related bloodstream infections — reached the critical 92-event milestone of its Phase 3 trial last month. |
This heralds the successful end of the Phase 3 trial pending confirmation from independent reviewers. |
For those unfamiliar with clinical trial phases, a successful Phase 3 trial generally means FDA approval… and for CTXR, that means revenue. |
All of this bodes well for the technical pattern I see lining up… |
If you're going to take a big leap, it helps to have a firm footing, and CTXR has just established that beneath the $1.00 line. I won't be surprised if it takes off in the next few days. |
I think this is a great idea that merits your attention, and I've given you my impressions. But please… as always, do your own homework, and make sure you have a game plan in place that makes sense for you before you ever trade anything. |
You can start by checking out CTXR's website here. You'll see an entire "Investors" menu tab that has great resources. |
In the meantime, happy trading! Let's hope for a nice bounce in the markets today… |
To Your Success, |
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P.S. If you're new (or just haven't done it yet), make sure you join our exclusive SMS list. 📲 All you need to do is text the word "RAGE" to (888) 404-5747 to get all of my latest HOT STOCK ideas and access to live trading events! |
*This investment involves substantial risk. Please see full disclosure below, and detailed discussion of risks and atypical results. |
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