CytomX Therapeutics (CTMX) wasn’t alone in having a miserable 2021 — nearly 80% of the biotech stocks on my screen lost ground last year as Wall Street struggled to digest dozens of new names chasing blockbuster targets, suggests Hilary Kramer, growth stock expert and editor of GameChangers.
But after shedding 36% of its market cap, CTMX trades at an 18% discount to cash and equivalents, with minimal debt to weigh on the balance sheet. Investors can buy the stock and get the clinical pipeline for free. And having reviewed the science and the FDA calendar, I suspect CTMX is a bargain down here below $5.
While preliminary Phase II results on a head-and-neck squamous cell cancer trial weren’t spectacular, the drug did a whole lot better getting advanced forms of lung cancer under control, comparing well to rival therapies and blowing conventional chemo away.
That single indication in isolation would be a company maker — with data coming on esophageal cancer and lymphoma as well as a breast cancer drug deep into its own Phase II trial.
There’s a reason Bristol-Myers Squibb (BMY) keeps pouring cash into these programs. The giants see the potential of adding CTMX antibodies to existing oncology “cocktails.” Now it’s time Wall Street adds the stock back to the core biotech portfolio.
A Look Back at 2021's Top Performers
Hilary Kramer selected two winners as her Top Picks last year; here she reviews those recommendations:
Sally Beauty Holdings (SBH) benefited from the market’s pivot back to “old economy” stocks, hitting my $18 target with upside to spare. Cosmetics are a notoriously recession-resistant category and as the pandemic finally recedes the sales trend looks stronger than ever. I’m looking for 35% earnings growth in 2022, which makes SBH a steal at barely 10X current EPS.
Airbnb (ABNB) did well in its post-IPO year but Wall Street’s flight from rich valuations has left the stock far from its ATH of $207. Here’s the thing: ABNB is still early in its transition from expansion at any cost to feeding the bottom line. Nobody was weighing the earnings multiples a year ago and I doubt they’re doing it now. The Fed is neither friend nor foe here. When the market figures that out, this will be a $200 stock again . . . and more.