NeuroBo Pharmaceuticals (NASDAQ:NRBO), a clinical-stage biotech operation, shot up nearly 41% in trading yesterday on volume around 250 times the level normally seen. Early trading this morning has seen some decline as investors take profits. The company made some changes recently that may have drawn interest, but social media seems to be leading the charge in NeuroBo's recent run-up. However, social media traders are also joining a small but unanimous chorus of “buy” recommendations from the financial analyst sector.
NeuroBo to Join the Meme Stock Ranks?
NeuroBo Pharmaceuticals is currently at work commercializing new treatments for a range of diseases, including viral diseases as well as neuropathic and neurodegenerative. Once these treatments are effectively commercialized, doctors and larger-scale medical facilities will be better placed to attack these diseases and help patients recover.
NeuroBo also released word that, back during its Annual Meeting of Shareholders, the company added two new members to its board of directors: Hyung Heon Kim and Andrew I. Koven. Kim and Koven were slated to replace Akash Bakshi and Jeong Gyun Oh, neither of whom stood for re-election during the meeting. The board thanked Bakshi and Oh for their service in a later press release, suggesting no significant issues with their performance or similar issues, and also pointed out that the NeuroBo board of directors now consists of seven directors, six of which are considered “independent.”
However, that's not what led the charge in NeuroBo's recent jump. That can be traced mainly to the “meme stock” phenomenon, in which social media traders put their collective weight behind a company that looks attractive for certain reasons. In this case—as has been the case with several other pharmaceutical companies so far—the “low float” seen with NeuroBo stock proved particularly attractive. NeuroBo had been trading in the $2 to $6 range for the last six months, and starting in early April, the price per share slipped under $4, which it hasn't left since. The recent pop saw the share price nearly double from Monday's close to early afternoon trading on Tuesday.
What Are Financial Analysts Saying About NeuroBo Pharmaceuticals Stock?
While social media traders are chasing NeuroBo stock for its low float and attractive pricing, the word from the larger financial analyst community is equally positive. Our latest research notes NeuroBo as a consensus “buy”, a rating that's been in place since February 2020.
Back in February 2020, Ladenburg Thalm/SH SH started coverage of NeuroBo Pharmaceuticals, rating it a “buy” with no price target. In April 2021, HC Wainwright joined in, reiterating a “buy” rating on the company and establishing a price target of $16. With NeuroBo Pharmaceuticals stock currently trading around $3.30 per share, the upside potential this stock represents is substantial.
Thus, from July 2020 to just ahead of April 2021, NeuroBo stock had two “buy” ratings to its credit. After April 2021, though, that fell to just one “buy” rating. NeuroBo stock is not well-covered by analysts, but those who do cover it are quite pleased with its potential.
A bit of less-formal analysis contributes to the outlook, though; short interest in the company has plummeted in recent days. As of June 30, reports note, short interest stood at 226,400 shares. This may not mean much in isolation, but when compared to the June 15 short interest of 479,300 shares, it's a substantial decline approaching 53%.
Moreover, several hedge funds and other institutional investors have been stepping in to improve their positions in NeuroBo. The California State Teachers Retirement System, for example, now owns 9,817 shares, upping its position by around a third in the first quarter. BlackRock Inc. bolstered its position as well by an extra 2.7%, adding an extra 6,024 shares to hit a grand total of 226,013. Three separate banks—JPMorgan Chase (NYSE:JPM), Goldman Sachs (NYSE:GS), and Wells Fargo (NYSE:WFC)—all stepped up their ownership rates. Wells Fargo actually bought over 12 times its previous stake, going from its original 1,337 shares to 17,562.
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