In this article, we will discuss 5 micro-cap stocks to buy according to hedge funds. If you want to read our detailed discussion on investing in micro-cap stocks, go directly to 10 Micro-Cap Stocks to Buy According to Hedge Funds.
5. Ardelyx, Inc. (NASDAQ:ARDX)
Number of Hedge Fund Holders: 20
Market Capitalization: $108.28 million
Ardelyx, Inc. (NASDAQ:ARDX) is a biopharmaceutical company. The Fremont, California-based company has Tenapanor as its lead candidate in the FDA approval pipeline. The drug is targeted towards the control of serum phosphorus in adults on dialysis due to chronic kidney diseases (CKD).
The company has a firm belief that Tenapanor can be used for all patients on dialysis and suffering from a high level of phosphorus in the blood. This condition is known as hyperphosphatemia. The drug will control the excess phosphorus in the blood, which can be revolutionary in the treatment protocol of CKD. Ardelyx, Inc. (NASDAQ:ARDX) also has a program aimed towards developing drugs that can control the levels of potassium in the blood, known as RDX013.
Of the 873 elite funds being tracked by Insider Monkey, 20 funds reported owning a stake worth $241.1 million in Ardelyx, Inc. (NASDAQ:ARDX) at the end of Q2 2021, up from 17 hedge funds having a stake worth $192.8 million in the preceding quarter.
To further improve its liquidity, Ardelyx, Inc. (NASDAQ:ARDX) entered into a sales agreement with Jefferies on August 16 which entails an “at-the-market offering” of common stock worth $150M. Ardelyx, Inc. (NASDAQ:ARDX) plans to utilize the proceeds from this deal to expand its working capital, support research and development, and capital expenditures, among other things.
4. Atreca, Inc. (NASDAQ:BCEL)
Number of Hedge Fund Holders: 20
Market Capitalization: $192.8 million
Atreca, Inc. (NASDAQ:BCEL) is involved in developing novel immunotherapies for the treatment of cancer and COVID-19. The San Carlos, California-based company brings into play its proprietary Atreca Discovery Platform to develop these immunotherapies and also partners with leading pharmaceutical organizations like Pfizer Inc. (NYSE:PFE), GlaxoSmithKline plc (NYSE:GSK), and others.
Atreca, Inc. (NASDAQ:BCEL) revealed initial results of Phase 1b research using ATRC-101 in patients with advanced solid tumors. ATRC-101 is a monoclonal antibody. In order to gauge its efficacy, it will be used with pembrolizumab and afterward along with chemotherapy also. The expected data of the combination study with pembrolizumab can be expected next 2022, which if favorable can act as a catalyst in rising stock price.
In addition to this, Atreca, Inc. (NASDAQ:BCEL) recently entered into an agreement with Bill and Melinda Gates Foundation to develop a novel monoclonal antibody to prevent malaria. Atreca, Inc. (NASDAQ:BCEL) anticipates entering a candidate in the approval pipeline by early 2023. The antibody has shown positive results in the prevention of malaria in animals. Under the term of the partnership, the foundation will hold commercial rights for countries under the GAVI program. Meanwhile, Atreca Inc. (NASDAQ:BCEL) would have commercial rights for the US, Europe, and certain countries in Asia.
In October, Tony Butler at Roth Capital issued a Buy rating on Atreca, Inc. (NASDAQ:BCEL) shares with a price target of $30. This reflects a potential upside of nearly five times from the current stock price.
3. Sientra, Inc. (NASDAQ:SIEN)
Number of Hedge Fund Holders: 21
Market Capitalization: $264.5 million
Sientra, Inc. (NASDAQ:SIEN) produces and supplies plastic surgery implantable components. The company offers breast augmentation, breast reconstruction, and advanced scar treatment. The industry is in the growth phase as the market for augmentation is at an all-time high. Sientra, Inc. (NASDAQ:SIEN) considers itself in a strong position to reap the benefits.
On October 27, the US Food and Drug Authority (FDA) has made the safety standards for breast implants stringent by taking numerous actions to communicate the risk related to breast implants. Under the guidelines, manufacturers and suppliers of breast implants are required to restrict the sale and distribution of breast implants so that they make an informed decision. Furthermore, the companies are also required to update their labeling. All this needs to be done within a period of 30 days following the announcement.
Sientra, Inc. (NASDAQ:SIEN) posted Q3 2021 results on November 21. The company reported revenue of $19.6 million, which outperformed the analysts’ estimate of $18.34 million. Moreover, Sientra, Inc. (NASDAQ:SIEN) recorded GAAP EPS of -$0.08, beating the analysts’ estimate by $0.1.
2. Synchronoss Technologies, Inc. (NASDAQ:SNCR)
Number of Hedge Fund Holders: 22
Market Capitalization: $255.3 million
Synchronoss Technologies, Inc. (NASDAQ:SNCR) is a software company that was founded in 2000 with nine global offices and a headcount of over 1,500 employees. The Bridgewater, New-Jersey-based company has over 200 customers with more than 135 patents. The company develops white-label software that eases the engagement of the masses with the brands. After people are converted into subscribers, Synchronoss Technologies, Inc. (NASDAQ:SNCR) provides solutions that ease the onboarding and drive service adoption. Finally, the network component of their service streamlines networks to be more efficient and profitable.
Synchronoss Technologies, Inc. (NASDAQ:SNCR) is in the middle of restructuring. It was able to refinance its $278.6 million worth of preferred stock with a 14.5% dividend through a secondary equity offering of 42.3 million shares at $2.30 and a $120 million senior notes at 8.375% interest.
Synchronoss Technologies, Inc. (NASDAQ:SNCR) reported its Q3 2021 results on November 8. The revenues came in at $69.8 million and outperformed the consensus estimate of $68.6 million. Meanwhile, the non-GAAP EPS of 9 cents was higher than the consensus loss per share estimate of 3 cents.
1. Mereo BioPharma Group plc (NASDAQ:MREO)
Number of Hedge Fund Holders: 24
Market Capitalization: $233 million
Mereo BioPharma Group plc (NASDAQ:MREO) is working on providing new therapies against life-threatening oncology and rare diseases without proper treatment options available. Through Alvelestat (MPH-966), the UK-based biopharmaceutical company is working on countering the impact of rare and life-threatening antitrypsin deficiency (AATD)-related lung disease. Phase 1b/2 clinical study is also being conducted to observe the impact of Alvelestat to counter limited lung function in patients suffering from COVID-19. If Alvelestat receives approval from the FDA for the treatment of limited lung function in COVID-19 then it could propel Mereo BioPharma Group plc (NASDAQ:MREO) to new heights.
On October 26, the US Food and Drug Administration has given Alvelestat Orphan Drug status. This means that as AATD is a rare disease and it would not be profitable to produce the therapy with the support of the government. According to Mereo BioPharma Group plc’s (NASDAQ:MREO) CEO, Dr. Denise Scots-Knight, the approval by the FDA reflects that there is a “significant and urgent unmet need” for the treatment of AATD. Mereo BioPharma Group plc (NASDAQ:MREO) expects to give an update on the progress of its research by the end of 2021.
Analysts at Needham and BTIG initiated coverage on Mereo BioPharma Group plc (NASDAQ:MREO) with a Buy rating and a $10 price target in May 2021. Chad Messer at Needham highlighted Etigilimab as the growth driver for Mereo BioPharma. Etigilimab attaches itself to the human TIGIT receptor and works towards enhancing the performance of the T-Cell and NK cell anti-tumor activity. Both analysts highlighted the diversified pipeline of Mereo BioPharma Group plc (NASDAQ:MREO) to provide potential upside to investors.
You can also take a peek at the 10 Best Stocks to Buy According to Billionaire Carl Icahn and 10 Best REIT Dividend Stocks According to Hedge Funds.
