2 Tiny Stocks That Should Be This Week's Biggest Movers
For beginning investors, it's often difficult to tell the difference between solid, long-term decisions and dumb, short-term luck. When a stock you own makes huge moves -- up or down -- in a single day, it's easy to let emotions run wild and make a buy/sell decision that you'll end up regretting.
If you own shares in either Galena Biopharma Inc. or ExOne Co. , three forces are combining to create such moves this week. The first is that both are small companies, each worth less than $1 billion. The second is that each is reporting earnings, and Wall Street watches extra closely when this happens. And the final factor is that a lot of investors are shorting -- or betting against the success of -- each company's stock.
To make sure you're prepared for the week ahead, here's what to look out for:
% of Shares Short
Expected Revenue (Millions)
Galena Biopharma Inc.
Sources: finviz.com, E*Trade.
Galena Biopharma Inc.
Though Galena already has one medication -- for relieving cancer pain -- approved by the FDA, the company's future rests squarely on the success of its NeuVax line of breast and gastric cancer drugs. The former is already in phase 3 trials, while the latter is just beginning phase 2 testing.
Investors in the company have endured quite the roller-coaster ride. Between November and January, the company's stock rose almost 250%. The first catalyst was an announcement of successful early-stage trials for a drug targeted at preventing ovarian and endometrial cancer relapses. Several institutional investors started buying shares shortly thereafter, and then Galena announced they were acquiring Mills Pharmaceuticals. These events combined to create a snowball effect, sending the stock soaring.
But the market hasn't been so kind to shareholders since then. Shares have lost more than half of their value, in part because the company was alleged to have paid a firm to pump up Galena's potential.
When Galena reports this week, meeting revenue expectations won't be nearly as important as listening to the company's conference call. Of course, there may be questions about the stock-pump allegations. Some earlier-stage treatments may report positive developments. But investors should remain squarely focused on any progress coming from the company's line of NeuVax treatments.
The preceding images paint a picture for the diverse number of objects that can be printed in glass, sand, or metal using ExOne's industrial 3-D printers. Though the company has brought in a scant $42 million in revenue over the past year while losing $0.26 per share -- versus a $600 million valuation -- investors think there's lots of reason to get excited about ExOne's potential.
For starters, the company is squarely focused on the industrial sector. Although these customers usually take longer to win over, in the end, they're usually far more lucrative than commercial or consumer users. ExOne's only real competition -- focused solely on the industrial sector -- is voxeljet , a German company that has already earned the ire of some investors for foolishly overspending and misallocating some of the proceeds from its recent IPO.
That being said, ExOne shareholders have had to endure a tough year so far, with shares trading down about 35% from early January highs. That's largely because the company announced that a few key customers put off their purchases until the first quarter of 2014 began. Investors should listen in to make sure these purchases were, in fact, made by now, and what the company sees in terms of sales for the rest of the year.
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The article 2 Tiny Stocks That Should Be This Week's Biggest Movers originally appeared on Fool.com.Brian Stoffel has no position in any stocks mentioned. The Motley Fool recommends and owns shares of ExOne. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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