Hedge Funds Say These Penny Stocks are Poised to Explode

Hedge funds also don’t stay away from healthcare penny stocks and their favorite is XOMA Corp (NASDAQ:XOMA), a $93 million developer of antibody-based therapeutics. Biotech stocks represent a nice bet, since they can skyrocket in a very short time if the company manages to succeed with one of its developments. Xoma Corp’s stock entered the penny-stock range after a significant slump at the end of July, after the company said that its Phase 3 study of gevokizumab in patients with Behçet’s disease uveitis did not meet its primary endpoint. Nevertheless, in August, Wedbush Securities reiterated its ‘Buy’ rating on the stock and lowered the price target to $11 from $13, which still represents a large premium on the current price. Among the funds from our database, 20 investors held stakes in XOMA Corp (NASDAQ:XOMA) with an aggregate value of $142.16 million at the end of June, up from 16 funds with long positions worth $1.13 million a quarter earlier. Moreover, these investors held over 31% of the company at the end of the second quarter. Julian and Felix Bakers’ Baker Bros. Advisors was the largest shareholder of XOMA Corp (NASDAQ:XOMA) in our database at the end of June, owning 14.68 million shares.