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QQQ   445.61
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S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
Critical asset just had biggest fall on record (Ad)
Dell, NetApp rise; Ginkgo Bioworks, New York Community Bancorp fall, Friday, 3/1/2024
How major US stock indexes fared Friday, 3/1/2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
Question of whether Nebraska public money can go to private schools still set for November ballot
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
Critical asset just had biggest fall on record (Ad)
Dell, NetApp rise; Ginkgo Bioworks, New York Community Bancorp fall, Friday, 3/1/2024
How major US stock indexes fared Friday, 3/1/2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
Question of whether Nebraska public money can go to private schools still set for November ballot
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
Critical asset just had biggest fall on record (Ad)
Dell, NetApp rise; Ginkgo Bioworks, New York Community Bancorp fall, Friday, 3/1/2024
How major US stock indexes fared Friday, 3/1/2024
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
Question of whether Nebraska public money can go to private schools still set for November ballot
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices

Small-Cap Catalyst Pharma Is Among Market's Best Price Performers

Small-Cap Catalyst Pharma Is Among Markets Best Price PerformersSmall-cap biotech Catalyst Pharmaceuticals NASDAQ: CPRX has been outperforming the broader market, amid recent earnings and revenue acceleration.

Key Points

  • Small-cap biotech Catalyst Pharmaceuticals recently joined the S&P 600 index, which means institutions must own shares to track the index 
  • The company has a steady history of price appreciation going back one year, even while the broad market declined
  • Catalyst has been outpacing the S&P 600 index by a wide margin
  • The company's earnings and revenue growth accelerated in the past three quarters, and analysts see double-digit top- and bottom-line growth ahead 
  • 5 stocks we like better than Catalyst Pharmaceuticals

The company also got some good news last month, as it joined the S&P 600 Small-Cap index, replacing defense contractor ManTech, which was acquired by private equity giant The Carlyle Group NASDAQ: CG

Joining a major index, such as the S&P 600, means funds tracking that index must purchase shares and maintain weightings roughly in line with the benchmark’s composition. 

This means Catalyst, makes amifampridine, a medication for a rare autoimmune condition called Lambert-Eaton myasthenic syndrome. This affects the neuromuscular and neurological systems. This condition can be associated with lung cancer patients, but also occurs in those without cancer. 

Catalyst has a market capitalization of $1.35 billion. The company went public in 2006, so is somewhat out of the 15-year post-IPO zone, when companies often notch their biggest price gains. However, the stock has posted significant increases recently:

  • 1 week: +8.09%
  • 1 month:-5.24%
  • 3 month: +83.02%
  • Year-to-date: +89.51%
  • 1 year: +142.08%

Shares rallied to an all-time high of $17.22 on September 13, on news of the index inclusion. But as the small-cap index, along with the broader market fell, Catalyst got swept up in the downtrend.

Nonetheless, it’s instructive to compare the stock’s performance against its index. You can track the S&P 600 by a number of ETFs, such as the SPDR Portfolio S&P 600 Small Cap ETF NYSEARCA: SPSM

The index is down 24.71% year-to-date, and also in shorter rolling time frames. Small caps underperformed Monday as large caps posted solid rallies. Catalyst bucked that trend, with a gain of 2.42%, or $0.31, finishing the session at $13.14. Trading volume was below normal.


Here’s one thing to watch for with a small stock like this: If you look at a one-minute chart, you’ll see gaps between price movements. That’s because with 87.4 million shares in float, and with 14% of shares owned by management, there aren’t really too many buyers and sellers. Sometimes that means it can take a minute (literally) to find an agreement on a price.

Despite that potential drawback, which actually doesn’t affect retail investors much at all, the company has plenty of positives: Revenue growth accelerated in the past three quarters, from 23% to 46%. 

Its three-year revenue growth rate is 36%. 

The three-year earnings growth rate is 54%. Earnings growth also accelerated in the past three quarters, from 17% to 75%.

The company reports its third quarter on November 8, with analysts eyeing earnings of $0.19 per share on revenue of $53.35 million. Those would be increases of 36% and 48%, respectively. 

MarketBeat earnings data show that Catalyst has a rocky history when it comes to beating or missing both top- and bottom-line views. 

The company’s return on equity is a very strong 31%, an indication of good management. 

Analyst ratings compiled by MarketBeat show that Catalyst has been designated a “moderate buy” with a price target of $14.81, a potential upside of 12.81%. That’s a more realistic buy zone, at the moment, rather than watching for the stock to zip past that prior high of $17.22, given the current market conditions. 

As a whole, biotechs are among the market’s biggest winners right now, with companies such as Apellis Pharmaceuticals NASDAQ: APLS, Aerie Pharmaceuticals NASDAQ: AERI, Belite Bio NASDAQ: BLTE, Verona Pharmaceuticals NASDAQ: VRNA and Revance Therapies NASDAQ: RVNC being some of the top price performers in the market right now, among all industries and sectors. 

With the exception of Apellis, which is a mid-cap, all the others fall into the small-cap category, where you’ll often find stocks with outstanding price action. As noted earlier, a small market cap and small float can help a stock rise to the top without much institutional support, but always use caution, especially in the notoriously volatile biotech sector, where a disappointing clinical trial can send a stock plummeting. 
Small-Cap Catalyst Pharma Is Among Markets Best Price Performers




 

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Should you invest $1,000 in Catalyst Pharmaceuticals right now?

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Catalyst Pharmaceuticals (CPRX)
4.8136 of 5 stars
$17.01+6.1%N/A27.89Buy$27.20
The Carlyle Group (CG)
4.6851 of 5 stars
$45.61-0.5%3.07%-26.99Hold$41.93
Apellis Pharmaceuticals (APLS)
4.0648 of 5 stars
$63.89+3.1%N/A-14.26Moderate Buy$76.40
Aerie Pharmaceuticals (AERI)
0 of 5 stars
$15.25flatN/A-19.80N/A
Belite Bio (BLTE)
1.0425 of 5 stars
$46.52+0.6%N/AN/ABuy$44.83
Verona Pharma (VRNA)
1.2593 of 5 stars
$18.19+5.6%N/A-26.36Buy$32.60
Revance Therapeutics (RVNC)
4.4687 of 5 stars
$6.98-2.2%N/A-1.84Moderate Buy$15.56
Compare These Stocks  Add These Stocks to My Watchlist 

Kate Stalter

About Kate Stalter

  • stalterkate@gmail.com

Contributing Author

Retirement, Asset Allocation, and Tax Strategies

Experience

Kate Stalter has been a contributing writer for MarketBeat since 2021.

Additional Experience

Series 65-licensed investment advisor, financial advisor, Blue Marlin Advisors; investment columnist for Forbes, U.S. News & World Report

Areas of Expertise

Asset allocation, technical and fundamental analysis, retirement strategies, income generation, risk management, sector and industry analysis

Education

Bachelor of Arts, Saint Mary’s College, Notre Dame, Indiana; Master of Business Adminstration, Kellogg School of Management at Northwestern University

Past Experience

Founder, financial advisor for Better Money Decisions; editor, stock trading instructor for Investor’s Business Daily; columnist, podcast host, video host for MoneyShow.com; contributor for Morningstar magazine


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