These Stocks Are On My Shopping List*
* But I'm checking it twice and waiting to buy until the Fed speaks on Wednesday.
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We have mixed action on Monday morning, with breadth running close to even. There are 250 new 12-month highs and 215 new 12-month lows, which illustrates how mixed that action has been lately.
Nasdaq 100 QQQ and Magnificent Seven MAGS continue to lead, but the mighty Nvidia NVDA has turned into a major laggard. I believe there will be a good opportunity to accumulate Nvidia before it begins a run into first quarter 2025 earnings, but there is no rush at this point.
There is a little bit of bounce action out there, but investors aren't likely to do much chasing with the Fed interest rate decision that is coming up on Wednesday. There is a substantial risk that it could trigger a sell-the-news reaction, but if a dip buying opportunity does arise, it would be ideal for a Santa Claus rally to end the year.
Quite a few of the smaller stocks I favor have been pulling back, and I'm starting to do a little more buying. One name in particular that I've been trading is XERIS Biopharm XERS. XERS is an old favorite that has been chugging along with 20% revenue growth and is on the verge of posting positive earnings per share. It has several potential catalysts coming up in 2025. The first is the development of a drug using their patented drug delivery system, which has the potential for a billion dollars in sales should it go as planned. Currently, analysts are not pricing this new drug into estimates or price targets. As more detailed news about the development is released early next week, I expect to see much more interest in the stock.
In addition, the company's drug delivery product is being tested by at least two large biotech companies, including Amgen AMGN, which could result in a licensing or partnership deal. Deal news could come at any time, but if it doesn't, the company's three commercial products will sell well, and the stock will be cheap based on those sales alone.
On Dec. 6, the stock hit its highest levels since 2021 but pulled back into a very poor small-cap and biotechnology market. I believe there is a good chance of bouncing back if there is a Santa Claus rally, but even if there isn't, the market is a good value in the lower $3 area.
There are other stocks acting in a similar manner that are also on my shopping list, like Mereo BioPharma MREO, ADMA Biologics ADMA, and Sensus Healthcare SRTS, but I'm not ready to do substantial buying until the Fed is out of the way.
At the time of publication, DePorre was long NVDA, MREO, ADMA, SRTS, XERS
