Wall Street sell-side analysts hold an optimistic outlook about Tonix Pharmaceuticals Holding Corp (TNXP, Financial) and Cleanspark Inc (CLSK, Financial), even though these two stocks fell by more than 59% over the past 52 weeks. These so-called "falling knives” are recommended for a buy rating on Wall Street.
Some investors buy shares of falling knives because they expect to gain impressive returns following a strong bounce back in the share prices of these kinds of holdings. However, investors should be aware that there are significantly high risks with this kind of investment.
Tonix Pharmaceuticals Holding Corp
Tonix Pharmaceuticals Holding Corp is a New York-based biotech developer of therapies to treat several conditions, including posttraumatic stress disorder, agitation in Alzheimer's disease, corticosteroid-induced neurocognitive dysfunction and various autoimmune diseases.
The stock traded at a price of $1.45 per share at close on Friday following a 73.13% decline over the past 52 weeks.
The stock has a market capitalization of $182.33 million, a 52-week range of $0.39 to $25.50 and a 14-day relative strength index of 69, which tells that the share price is still very far from oversold levels.
GuruFocus assigned a positive rating of 5 out of 10 for the company’s financial strength, driven by a low debt-equity ratio of 0.01. However, investors must be careful with this stock, as a Piotroski F-Score of 3 out of 9 may be a signal of weak business operations.
As of July, the stock has three buy recommendation ratings from Wall Street sell-side analysts with an average target price of $2.38, which mirrors a 64.2% upside from Friday’s closing price.
Cleanspark Inc
Shares of the Bountiful, Utah-based provider of energy software and control technology solutions to various U.S. industries traded at a price of $5.06 per unit at close on Friday following a 66% decline over the last 52 weeks.
The stock has a market capitalization of $81.59 million, a 52-week range of $0.97 to $34.10 and a 14-day relative strength index of 72, which tells that this stock is trading closer to overbought than to oversold levels.
GuruFocus assigned a low score of 3 out of 10 for the financial strength of the company, which is the result of a Piotroski F-Score of 3 out of 9, indicating poor business operation, and an Altman Z-Score of -3.19, pointing to a high risk of bankruptcy.
The stock has a buy recommendation rating with an average target price of $18 per share on Wall Street. The target price represents a 255.7% increase from Friday’s closing price.
Disclosure: I have no positions in any securities mentioned.
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