Steve Cohen is loading up on selected penny stocks is about as odd as wearing tropical beach wear to the Avoriaz ski resort in January in this current financial climate of heightened risk. The tighter for long Fed is showing no signs of heading for the ropes in the inflation fight, yields keep rising, and the veneer of a proxy war between the two great powers in Ukraine is giving way to a hot war, WW3.  

Is this the contrarian story of the year, as Steve Cohen loads up on selected penny stocks?

Just maybe billionaire hedge fund manager Steve Cohen heard something through the grapevine. 

Steve Cohen has a knack for knowing what and when to buy at the right time. His trades were too good to be true, and that triggered an SEC investigation, leading to an insider trading scandal. But Steve Cohen was too big to jail. He somehow wangled a get-out-of-jail card, but his employee sidekick was not so fortunate. 

“maybe billionaire hedge fund manager Steve Cohen heard something through the grapevine”

WEALTH TRAINING COMPANY

Fast forward, and Steve Cohen is loading up on selected penny stocks

Penny stocks trade for less than 5 USD a share. They are high-risk, high-risk rewards stocks that most investors prefer to keep a wide berth.   

Steve Cohen, Point72’s Chairman, CEO and President, walks among Wall Street titans, and insider trade dealing scandal aside, he has built a fortune of around 17 billion USD using a high-risk, high-reward strategy.

Throughout his career, Cohen has consistently delivered huge returns to clients, giving him credibility on the Street.

Here are the two penny stocks Cohen’s Point72 made moves on in the last few months. 

If Steve Cohen’s calls on these Penny stocks are profitable, he could potentially make more than 500% on his capital. 

“Cohen has consistently delivered huge returns to clients, giving him credibility on the Street”

WEALTH TRAINING COMPANY

Praxis Precision Medicines (PRAX)

Steve Cohen loads up on Praxis Precision Medicines, a biopharmaceutical company which focuses on diseases of the central nervous system, or CNS. Specifically, the company is working on new treatments for movement disorders and epileptic seizure disorders, two sets of CNS conditions connected by neuronal imbalances. The company is following a dual-track research pipeline, using two proprietary platforms to develop new drug candidates: Cerebrum, a small molecule platform, and Solidus, an ASO (antisense oligonucleotide) platform.

“We are pleased to report that PRAX has been making significant progress across their four pipeline programs” – Yasmeen Rahimi, Piper Sandler

Praxis Precision Medicines’ research and development focuses on the application of genetic insights and an understanding of the biological targets and circuits in the brain. Praxis has four active pipeline programs in the clinic between the two platforms.

Ulixacaltamide is the standout drug in its portfolio. 

In August, Praxis announced positive data from the randomized withdrawal sub-study and long-term extension of the Essential1 study for this candidate in the treatment of tremors. The study also showed that patients who switched from ulixacaltanide to placebo experienced worsening symptoms. The sub-study execution also confirmed the design features of the planned Phase 3 study, scheduled to begin during 4Q23. The company has already had a favorable end-of-phase-2 meeting with the FDA, in preparation for Phase 3 initiation.

Steve Cohen is loading up on selected penny stocks, and Praxis Precision Medicines is one of them

Steve Cohen is not the only prominent PRAX bull.

Piper Sandler analyst Yasmeen Rahimi covers this stock and is impressed with what she sees – especially on the ulixacaltamide track.

“We are pleased to report that PRAX has been making significant progress across their four pipeline programs, especially highlighting that the Ph3 program in ET with ulixacaltamide is on track to start enrollment as soon as October 1 (4Q23) with topline in 2H24. We continue to have high conviction on a positive readout of the primary endpoint of mADL11, given that Essential1 showed a significant -1.81 delta difference (-2.69 vs -0.88 placebo; p=0.042), despite not being powered on that measure… Overall we remain bullish on the stock and see a buying opportunity for PRAX with ~1 year out from topline Ph3 data,” Rahimi wrote. 

“Agenus is working on new immunotherapy drugs for the treatment of cancer” – Wealth Training Company

Steve Cohen is loading up on selected penny stocks with Agenus, a biotech company (AGEN), another of his bought penny stocks

Agenus is working on new immunotherapy drugs for the treatment of cancer. Immuno-oncology is an expanding field, based on using the patient’s immune system to fight cancer, aiming to control or cure the disease. The company’s research targets a large number of cancers, including pancreatic cancer, cervical cancer, colorectal cancer, melanoma, and general solid tumours. 

In total, Agenus is working on more than a dozen clinical-stage programs and estimates that its leading program has a potential patient base of 200,000+ in the US.

Steve Cohen’s Point72 boosted its holding by 125% in Agenus with his fund buying 9,776,083 shares in the company in Q2. This brought Point72’s total holding in the firm to 17,616,983 shares, a stake worth $22.2 million at August valuations.

Overall, this stock holds a unanimous Strong Buy consensus rating, based on 5 positive reviews set in recent weeks. The shares are currently trading at $1.25 and have an average price target of $7.66, pointing toward a 510% gain on the one-year horizon.

Steve Cohen is loading up on selected penny stocks in the pharmaceutical space

Growth stocks showing upside potential will most likely outperform the indices when the Fed pivots eventually from tightening to easing.

The economic fallout from the highest fed fund rates in a generation will soon be felt by households and businesses, as loans mature and reset to the new restrictive rates.

Perhaps that is why the Fed has paused its aggressive tightening campaign and has kept rates at the restrictive level of 5-5.25% in its latest two meetings.