Value is sometimes seen as an indicator of quality in equity markets. After all, if a company has great prospects, investors flock to its shares, bidding for them. Corporations with relatively low per-share prices are therefore often considered less safe and risky investments.
Still, there are exciting stocks that can be had for less than $15 per share and that can provide solid returns for patient investors who can handle some risk and volatility. For two examples, consider Published by Medicine (Edit -0.78%) and Snap (SNAP -0.47%).
1. Published medicine
Editas Medicine is a biotech company focused on gene-editing therapies. Like many of its peers in this space, Editas Medicine currently has no approved products and is not profitable. Also, one of its candidates faced problems in clinical trials last year.
Editas is developing EDIT-301 as a potential treatment for Leber congenital amaurosis 10 (LCA10), a rare eye disease. Interim data from a clinical trial shared by the company last year revealed that EDIT-101 is likely to be effective for only about 300 patients in the United States, a small patient population that makes it difficult for the small biotech to justify developing the treatment. Editas Medicine therefore decided to pause enrollment in this trial while it attempts to find a partner with additional funding to develop EDIT-101.
Still, there are things to like about Editas Medicine. The company is working on another gene-editing therapy called EDIT-301 that targets sickle cell disease and beta-thalassemia, two rare blood disorders. This is an area with opportunity and some competition. The company announced this year that it will begin dosing patients with those conditions in Phase 1/2 studies for a potential therapy.
Editas is looking to develop a new proprietary gene-editing method called SLEEK, which could help discover drugs for a variety of hard-to-treat diseases. Editas Medicines recently announced that it will license the rights to use its SLEEK technology to privately held biotech Shoreline Biosciences for an undisclosed upfront price and potential future milestone payments, along with several pipeline candidates.
Editas Medical: This is perhaps the best reason to consider the company’s innovative capabilities. While the biotech faces headwinds at a price of around $7.50 and a market capitalization of $463 million, there could be substantial returns for investors who get in now if the company’s programs make solid progress.
But be advised that Editas medicine remains somewhat risky. Invest accordingly.
2. Snap
Social media company Snap has been plagued by financial challenges and reduced ad spending last year. Its financial results worsened, and its share price fell. But now trading at more than $10 per share, the tech company could offer shareholders good returns down the road as it has created a popular brand and platform that hundreds of millions of people use daily.
The company ended 2022 with 375 million daily active users (DAUs), a 17% year-over-year increase. What’s more, users are spending more and more time on the Snapchat platform. For example, in the fourth quarter, the total amount of time people spent in Snapchat’s Spotlight (where users can share and watch short-form videos) more than doubled.
Snap’s revenue should grow faster as ad sales recover. The company’s huge user base is attractive to businesses, especially those targeting younger customers. Snap is especially popular with people aged 13 to 35. The company represents more than half of digital ad spending to over 70% of people in this age group across 12 countries.
However, Snapchat is less popular among other age groups, and its global penetration remains relatively low. But that should change over time as people born and raised in the age of social media come to represent a larger and larger percentage of the world’s population. Snap has a huge long-term opportunity to continue with targeted and highly cost-effective digital advertising.
In order to reach profitability – a goal that has yet to be achieved – the social media specialist has also looked for other ways to make money, especially with Snapchat+, the premium subscription version of the app with more than 2 million users. Finally, Snap is also a leading company in the augmented reality space, and that market continues to grow. Snap’s stock is now well below its all-time high near $80 in 2021, but patient investors could see the shares reach and exceed that price.