Potomac Wealth Advisors president Mark Avallone joined CNBC's 'The Exchange' on November 16 to discuss where he sees investing opportunities following Trump's election. He believes investing in the tech sector makes the most sense given the implications of the 2024 election results for the financial markets. He noted that the election has shifted the underlying dynamics affecting businesses, particularly regarding regulation and taxation. The new administration has changed the previous climate of heightened regulation and discussions around increasing capital gains and corporate taxes. Avallone believes that the potential for reduced regulation and lower taxes on corporations could create a more favorable environment for business growth.
He emphasized that corporate America’s ability to deliver earnings will be crucial, relying on continued efficiencies and advancements in technology. This perspective supports his thesis that investing in technology remains a sound strategy for investors. When discussing specific stocks, Avallone highlighted major tech companies from the MAG7 as particularly attractive. He expressed confidence that the current administration would foster a more supportive environment for these companies, allowing them to thrive.
Avallone also touched on the defense sector, which has historically benefited from global conflicts. He pointed out that defense companies have shown resilience and believes that ongoing global tensions will sustain demand for defense stocks, providing a hedge against market volatility.
However, Avallone expressed caution regarding the healthcare sector, which has been lagging due to heavy regulation and political scrutiny. He noted that despite an aging population driving demand for medical equipment, regulatory pressures have hindered growth in this area. Overall, his analysis underscores a cautious optimism about investing in technology and defense while highlighting potential challenges within healthcare as businesses navigate the post-election landscape.
Methodology
We sifted through Finviz to compile a list of 30 NASDAQ stocks with high upside potentials. We then selected the 12 stocks with the biggest upside potential according to analysts. The stocks are ranked in ascending order of their analysts' upside potential.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
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Average Upside Potential as of November 21: 187.77%
Iovance Biotherapeutics Inc. (NASDAQ:IOVA) is a biotechnology company developing and commercializing cell therapies, primarily focusing on tumor-infiltrating lymphocyte (TIL) therapy for various solid tumors, including melanoma, renal cell carcinoma, non-small cell lung cancer, and gynecological cancers. Its lead product, Amtagvi, is a TIL therapy approved for metastatic melanoma.
Amtagvi's FDA approval and successful commercial launch happened in the third quarter of 2024, resulting in a massive 12,385.07% year-over-year revenue improvement for the company, generating an amount of $58.56 million, surpassing expectations.
Amtagvi's rapid adoption is evident in the increasing number of patient infusions, with 146 patients infused since its launch. This trajectory is expected to continue, with the company targeting a total of 70 authorized treatment centers (ATCs) by year-end. Favorable medical coverage policies and reimbursement are further facilitating broad access to Amtagvi, with ~75% of patients covered by private payers.
The company is well-positioned to capitalize on the significant commercial opportunity for Amtagvi. The US market alone represents a potential $1 billion peak opportunity, and the global market offers multi-billion dollar potential.
Artisan Small Cap Fund stated the following regarding Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) in its Q2 2024 investor letter:
“Among our top detractors for the quarter were Lattice Semiconductor and Iovance Biotherapeutics, Inc. (NASDAQ:IOVA). Iovance Biotherapeutics is a biotechnology company focused on innovating, developing and delivering novel polyclonal tumor-infiltrating lymphocyte (TIL) cell therapies for cancer patients. The stock rallied significantly in Q1 after announcing that the FDA approved AMTAGVI™ (lifileucel) for advanced melanoma. Now that the scientific risk is behind the company, investor focus has shifted to the company’s commercial execution, and shares experienced weakness after the company reported earnings results. It announced the enrollment of more than 100 patients for therapy; however, this was not enough to alleviate investor concerns about patient attrition. In our view, there is no issue with the efficacy of its life-saving treatment. Headwinds have been caused by challenges in ramping production, which is understandable in the early days. We view these concerns as overblown and remain invested.”
Overall IOVA ranks 1st on our list of the NASDAQ stocks with biggest upside potential according to analysts. While we acknowledge the potential of IOVA as an investment, our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than IOVA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
