We recently compiled a list of the 10 Best Hot Stocks To Buy Right Now. In this article, we are going to take a look at where Viking Therapeutics, Inc. (NASDAQ:VKTX) stands against the other hot stocks.
While the market is seeing significant positives after the Fed rate cut, there have been some pressures. For example, dockworkers from the International Longshoremen’s Association (ILA) have gone on strike at major U.S. ports along the East and Gulf coasts, marking the first such strike in nearly 50 years. The dispute involves a six-year contract covering 25,000 workers, with the ILA demanding significant wage increases and addressing concerns over automation.
While the US Maritime Alliance has offered wage and pension boosts, negotiations have still stalled. The strike could cause major disruptions to imports, especially food, clothing, and car shipments, with potential economic losses of $4 or $5 billion per week.
Moreover, CBS reported that Hurricane Helene is projected to be one of the most expensive storms in U.S. history, with Moody’s Analytics estimating property damage between $15 and $26 billion. AccuWeather forecasts that the overall damage and economic loss could reach up to $110 billion.
Central Banks, Port Strikes, and Inflation Risks: What Lies Ahead
Deepak Puri, Deutsche Bank Private Bank CIO of the Americas, recently joined CNBC’s ‘Money Movers’ as he discussed the current high expectations in the U.S. economy and noted that while inflation and employment are relatively stable, challenges lie ahead due to factors like the port strike, global conflicts, and post-hurricane reconstruction.
He mentioned that Chicago Fed President, Austan Goolsbee has highlighted the difficulty in maintaining the current economic balance. Puri advises patience in the markets due to various uncertainties, including the upcoming election.
Puri explained that while many central banks are lowering interest rates, it is uncertain whether the U.S. economy will avoid a downturn. Inflation remains a risk, and the U.S. port strike could cause serious economic problems if it lasts long, even though it hasn’t yet impacted the market much. He warned that several issues combined could affect inflation and overall economic performance.
When discussing the balance between inflation and jobs, the CIO said that concerns about the job market were bigger until recently, but now inflation is becoming more of a risk. He highlighted how challenging it is for the Fed to manage this situation, especially as consumer spending remains steady but is shifting. Meanwhile, sectors like housing and manufacturing, which are sensitive to interest rates, will need to take up the slack.
Finally, Puri talked about whether the Fed could pause rate cuts like the European Central Bank did. He thinks the Fed will keep lowering rates, but the size of future cuts will depend on upcoming labor market data.
Our Methodology
For this article, we made a list of the top 55 best-performing stocks on a year-to-date basis with a market cap of over $2 billion, as of October 1. We narrowed our list to 10 stocks that were most favored by analysts. The best hot stocks to buy right now are listed in ascending order of the average price target upside. We also mentioned the hedge fund sentiment around each stock which was taken from Insider Monkey’s database of over 900 elite hedge funds.
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).
A microbiologist in protective gear studying samples in a laboratory.
Viking Therapeutics, Inc. (NASDAQ:VKTX)
Number of Hedge Fund Holders: 50
Year-to-Date Share Price Gains: 239.17%
Average Price Target Upside: 83.87%
Viking Therapeutics, Inc. (NASDAQ:VKTX) is a biopharmaceutical company that focuses on creating new treatments for metabolic and hormone-related disorders. It has three key drugs in clinical trials. One of these is VK2735, which works on two important receptors (GLP-1 and GIP) and has shown good results in early trials for treating metabolic issues.
VK2735, demonstrated significant weight loss in a Phase 2 study, with up to a 15% reduction in body weight over 13 weeks. Viking is advancing this drug into Phase 3 development, while also exploring a monthly dosing regimen.
It is also testing an oral tablet version of VK2735, which showed strong safety and tolerability in a Phase 1 trial, with promising weight loss results.
On September 30, TipRanks reported that Morgan Stanley analyst Michael Ulz maintained a Buy rating on Viking Therapeutics (NASDAQ:VKTX) stock with a price target of $105 as the analyst’s positive outlook is mainly driven by VK2735 oral drug’s Phase 1 results. It includes good safety and weight loss even at lower doses.
Ulz expects more weight loss data at higher doses to be revealed during Obesity Week, which could further boost the stock. He highlighted that VK2735 has a better safety profile, especially fewer gastrointestinal side effects, compared to its competitors. This advantage could help it stand out in the market.
Another drug, VK2809, targets thyroid hormone receptors and has shown success in treating liver diseases like non-alcoholic steatohepatitis (NASH) and fatty liver disease. In the Q2 earnings call, management said that VK2809 showed important improvements in both NASH and liver scarring and met key goals in its study. Viking plans to meet with the FDA to talk about the next steps for the drug.
Viking Therapeutics (NASDAQ:VKTX) is also working on a new class of treatments, DACRAs, for obesity and other metabolic disorders. Additionally, it is also working on VK0214 to treat X-linked adrenoleukodystrophy (X-ALD), a rare nerve and muscle disease, and has finished signing up patients for an early study.
Viking Therapeutics’s (NASDAQ:VKTX) stock has been covered by 14 analysts and all of them maintain a Buy-equivalent rating on the stock. The average price target of $114 represents an upside of 83.87% for the company as of October 1, which is why the company tops our list of the best hot stocks to buy.
Overall VKTX ranks 1st on our list of the hot stocks to buy. While we acknowledge the potential of VKTX as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than VKTX but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
Read Next: $30 Trillion Opportunity: 15 Best Humanoid Robot Stocks to Buy According to Morgan Stanley and Jim Cramer Says NVIDIA ‘Has Become A Wasteland’.
Disclosure: None. This article is originally published at Insider Monkey.
