Looking for stocks that could ignite your portfolio quickly and aggressively? Then we could have the catalysts you need. We’ve compiled a list of stocks with upcoming catalysts to boost your portfolio, so let’s dive into it.
Best Stocks With Upcoming Catalysts
Eli Lilly And Co (NYSE: LLY)
Eli Lilly is a pharmaceutical giant and a biotech stock that operates at the same level as companies like Pfizer (PFE).
They are best known for their insulin products but also develop a wide range of drugs. That includes treatments for oncology, immunology, neurodegeneration, and cardiovascular disease.
As with all significant drug manufacturers, the company has a pipeline of drugs in various stages of development. One of those drugs is Donanemab—a monoclonal antibody medication.
The drug applications include the treatment of Alzheimer’s disease. It seeks to treat the condition by targeting a protein called amyloid-beta, which is believed to play a role in the progression of Alzheimer’s.
Donanemab has already shown promising results in its clinical trials. The results include a slowing in the decline of cognitive function and reducing amyloid-beta plaques in the brain.
In fact, the second phase of the trial data demonstrated a 32% reduction in cognitive decline. A significant reduction when compared to a placebo after 76 weeks of treatment.
The results have sparked the interest of both investors and the medical community alike. But the company might have jumped the gun and moved too quickly with the approval process.
Recently, Eli Lilly presented an accelerated approval submission of Donanemab to the US Food and Drug Administration (FDA).
On their website, Eli Lilly reported that it received a response. Unfortunately, the request was denied, citing the need for more information.
The FDA requested data from at least 100 adult patients who received at least 12 months of continued treatment.
However, the letter also highlights that the Phase 3 readout and submission for traditional approval are still on track for mid-2023.
Donanemab’s safety profile has also remained consistent since the accelerated approval submission. This is a good sign that the drug could be on track for approval.
Final results are expected in the fall of 2023. This timeline could offer investors enough time to dollar-cost-average their way into the investment.
If the drug is approved and launched it’s possible that the news could catalyze shares of Eli Lilly.
On the other hand, delays in medical trials or a lack of approval could ultimately work against the company. As always, do your research and manage your risk.
Barrick Gold Corp (NYSE: GOLD)
There’s been much uncertainty surrounding the banking sector for part of 2023.
News about bank failures struck the tabloids during the first part of the year. These worrisome announcements have incited fears of financial instability looming over the economy.
The price of gold and other assets like Bitcoin and silver has gained momentum after the news of SVB bank’s failure, which has prompted depositors to seek safe havens for their capital.
For now, the situation appears to be under control. FED Chairman Powell has hinted at the ability of the government to protect all depositors.
This could, in turn, mean—you guessed it—the creation of new money as the FED fires up the printers to pay for any depositor losses.
A scenario where banks are at critical risk, and the FED bails out with new money creation could benefit gold prices.
The failure of banks, particularly those with systematic risk, could be a catalyst for gold to catapult to new heights.
If that happens, Barrick is well-positioned to benefit from gold’s rising price and deliver investors appealing returns.
The Canadian mining company operates mines in several countries that engage in the production and sale of both gold and copper.
Their mines span the United States, Canada, Argentina, Chile, Peru, and the Dominican Republic.
This diversification is key in helping them mitigate the impact of any operational issues or geopolitical risks in a particular country.
When it comes to gold, size is better, and Barrick helps Barrick position itself as a leader in the space.
They are, in fact, considered to be one of the largest gold mining companies in the world, including one of the top three gold miners by market cap.
In 2022 the company reported having nearly 76 million ounces of attributable proven and probable mineral reserves 2022. The number is up from 69 million ounces in 2021.
If demand increases along with the price of gold, the company could decide to sell some of its reserves.
This could help revenue grow significantly, considering the heightened prices of the precious metal.
Lennar Corp (NYSE: LEN)
Lennar is one of America’s largest homebuilders, with a capitalization of nearly $30 billion.
The company is headquartered in Miami, Florida, and operates in more than 20 states nationwide.
Being one of the largest real estate developers in the country exposes Lennar to changes in interest rates from the FED.
The FED has been hiking rates over the past year to get inflation under control. The change has made it more difficult for Americans to obtain a fairly priced mortgage.
This has affected the housing market and Lennar’s bread and butter.
A reversal of the FED’s policy could reignite the real estate market. In turn, it could catalyze a trend change in Lennar’s performance.
While there is no set date for this one, signs are starting to show that the FED might soon reverse its policy.
Cracks have commenced appearing in the banking system. This has prompted the FED to take a step back and lower the rate of interest rate hikes.
During the last FOMC meeting, Chairman Powell only announced 25 basis points, which was lower than at previous meetings.
Lennar printed a new all-time high in the price charts on February 2022 before retracing nearly 50% over the following months.
Despite a healthy recovery, the company has failed to make a new high. This could indicate investors are not yet ready to support a new upward trend.
AbbVie Inc (NYSE: ABBV)
AbbVie is a pharmaceutical and biotech company specializing in developing and marketing drugs for various health conditions.
The biotech stock primarily focuses on developing drugs for treating immunological and oncological diseases.
ABBV’s heavy investment in R&D is one of the key aspects that separates this company from its competitors.
In 2022, the company invested an estimated $6.5 billion in research and development.
This has allowed the company to develop a robust pipeline of new drugs. Many of these are waiting for regulatory approval that could catalyze its price to move drastically.
The biotech stock has a highly anticipated drug approval in the pipeline for 2023 for a new drug called Epcoritamab.
Epcoritamab, also known as GEN3013 or DuoBody-CD3xCD20, is an antibody being developed as a potential treatment for B-cell malignancies.
In other words, Epcoritamab is a lymphoma cancer treatment. One that leverages the patient’s T-cells to defend their body from the malign cancer cells.
The drug has already shown promising results in early-stage clinical trials. It’s possible that it could get approval in 2023.
In the primary studies, the drug demonstrated an objective response rate of 84% and a complete response rate of 64%.
In the last quarter of 2022, AbbVie submitted an application for Epcoritamab to the European Medicines Agency (EMA). Its co-developer, Genmab, also submitted a Biologics License Application to the US Food and Drug Administration (FDA).
If the applications are approved, investors could see their shares of ABBV propel to new heights.
Pfizer Inc. (NYSE: PFE)
Pfizer is one of the world’s leading pharmaceutical and biotech companies with over a century in operation.
The company has been under the spotlight recently due to its development of a COVID-19 vaccine.
But Pfizer has made significant breakthroughs in other areas and is responsible for other drugs. These include Lipitor, the best-selling drug in history, and Viagra, a male performance-enhancing drug.
The company recently completed the acquisition of Arena Pharmaceuticals for $6.7 billion.
Arena is responsible for developing Etrasimod. The drug could serve as a potential treatment for various autoimmune and inflammatory diseases, including ulcerative colitis.
Pfizer’s new drug application was accepted by the FDA in December 2022, setting it up for possible approval in mid-2023.
European regulators have taken similar action, with a decision expected in 2024.
The news was followed by another Pfizer report pointing to Positive Results for Phase 3 Trials of Etrasimod.
If the FDA approves the application on time, investors could expect some action between the second and third quarters. We’ll keep our eyes open for this one.
Are Stocks With Upcoming Catalysts a Good Investment?
Stocks with upcoming catalysts could be a great short-term investment opportunity, but one that comes with equally high risks.
Simply put, a stock catalyst is any information that could dramatically impact stock prices.
New drug applications are a popular catalyst sought after by catalyst investors. But that’s not the only circumstance that could help supercharge your portfolio.
Other potential catalysts include key events like earnings, investor conferences, product releases, economic events, court decisions, and corporate actions.
While most catalyst investments are considered to be short-term bets, it’s possible that they could also point to long-term results.
A study conducted by McKinsey & Company found that stocks with positive news momentum tend to outperform low-momentum stocks.
Many companies use PR and media to help them build momentum with a series of programmed catalysts. Keeping an eye out for companies that employ these practices could help identify long-term winners.
The stocks mentioned in this article might actually be worth exploring further as they could also offer long-term opportunities.
However, investing in stocks with catalysts might come with split odds. Nailing a short-term bet could really come down to a 50/50 chance.
But investors might be able to minimize their risk and improve their odds by doing extensive research.
For example, let’s assume one were to consider investing in a biotech company based on a potential catalyst.
Then it would serve the investor well to do in-depth research about the drug’s clinical trial. Thus, helping them better assess the likelihood of its approval.
You can also minimize your risks by ensuring the company you invest in has a positive long-term outlook. This way, your investment might still be safe even if the catalyst goes against you.
Now that you know more about stocks with upcoming catalysts, you might want to add one (or more) to your portfolio.
FAQs
What Are Catalysts in The Stock Market?
A catalyst in the stock market is any event that can cause a dramatic change in the price of a security. Catalysts can be both positive or adverse events, making the stock price move upward or downward accordingly. Catalysts in the stock market tend to cause short-term price changes, but long-term trend changes are also possible.
What Are Good Catalysts for Stocks?
Good catalysts for stocks include events or news that help the price of a security change dramatically. Some of the most common good catalysts for stocks include:
- FDA or CDC approval
- Earnings Results
- A product release
- Significant press releases
- Investor conferences
- Macroeconomic events
- Court decisions
What Is a Short-term Catalyst?
A short-term catalyst for stocks is any news or event that causes a short significant change in price. These tend not to be significant enough to disrupt the long-term trend. But can make the short-term price move much higher than the daily average.
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