We recently published a list of the 12 Best Canadian Penny Stocks to Buy According to Analysts. In this article, we are going to take a look at where AbCellera Biologics Inc. (NASDAQ:ABCL) stands against other best Canadian penny stocks to buy according to analysts.
According to a report by the Government of Canada, released on December 16, the country’s economic outlook has been revised upward, as private-sector economists forecast moderate growth of around 2% in the second half of 2025. The report highlights the average of private sector forecasts are used as the basis for economic and fiscal planning in Canada to ensure objectivity and transparency. The Department of Finance surveyed a group of 11 private sector economists in September 2024, who expect the Canadian economy to benefit from robust growth in the US, driven by rising equity markets and increasing confidence among US households and businesses. The economists forecast that the unemployment rate will also stabilize to 6.6% by the end of 2025 compared to 6.9% in the fourth quarter of 2024. The report also states that the government is reducing the federal debt-to-GDP ratio over the medium term. The federal debt-to-GDP ratio in 2023-24 was 42.1% and is forecasted to decline to 41.9% in 2024-25.
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In an interview with BNN Bloomberg on January 3, Gavin Graham, Chief Investment Officer and Portfolio Manager at Spire Wealth Management, discussed the investment landscape for 2025, particularly focusing on Canadian stocks. Graham acknowledged that Canada has been a market leader in cutting interest rates which provides them a much better position than their U.S. counterparts, specifically in sectors such as pipelines, utilities, REITs, telecom, and financials, which are interest-rate sensitive industries.
In the energy sector, Graham expressed a preference for natural gas companies which have performed well due to low cost structure and the potential for increased demand due to the anticipation of colder weather in the US. Despite the local weather-related volatility in North America, he sees a positive outlook for the sector due to the impact of geopolitical events, such as Ukraine ending its gas imports from Russia, which could further influence natural gas prices.
Graham also recommended that investors allocate 5 to 10% of their portfolios to gold, citing the robust performance of gold miners. He noted that while gold itself was up 27% last year, gold miners have underperformed relative to the metal and suggests that major gold miners have the potential to outperform. Gold mining stocks, being a leveraged play on the price of gold, could see significant gains if the gold price continues to rise and can offer attractive dividend yields and a hedge against economic uncertainty.
Canada’s economic outlook for 2025 appears optimistic, with moderate growth expectations, a stabilizing unemployment rate, and a declining interest rate along with the favourable federal debt-to-GDP ratio. Investors seeking diversification and high-growth potential should look at opportunities in undervalued sectors within the Canadian market.
A research team analyzing data on a computer screen, uncovering details about the antibody discovery platform.
Our Methodology
For this article, we used Finviz and Yahoo stock screeners to find the 30 largest Canadian companies trading under $5 as of January 5. We then sourced the analysts’ average price targets and picked the 12 stocks that had the highest upside potential. We also included their hedge fund sentiment, which was taken from Insider Monkey’s Hedge Fund database of 900 elite hedge funds as of Q3 of 2024. The list is sorted in ascending order of analysts’ average upside potential as of January 5.
Why do we care about what hedge funds do? 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).
AbCellera Biologics Inc. (NASDAQ:ABCL)
Upside Potential: 292.65%
Stock Price as of January 5: $3.13
Number of Hedge Fund Holders: 13
AbCellera Biologics Inc. (NASDAQ:ABCL) is a clinical-stage biotechnology company that has been making significant strides in the development of innovative antibody therapies. The company has a strong foundation in antibody discovery and development and has been transitioning to a clinical-stage biotech by focusing on advancing its internal programs and building its pipeline capabilities.
One of the key areas of focus for AbCellera Biologics Inc. (NASDAQ:ABCL) is its T-cell engager (TCE) platform, which has significant potential in the treatment of cancer. The TCE platform is a technology that enables the creation of bispecific antibodies that can selectively activate T-cells to attack cancer cells. The company believes that its TCE platform has the potential to be a game-changer in the treatment of cancer, and is investing heavily in its development.
AbCellera Biologics Inc. (NASDAQ:ABCL) has already demonstrated the efficacy of its TCE platform in preclinical studies and is now working to advance its lead TCE candidates into clinical trials. The company is also exploring the potential of its TCE platform in combination with other therapies, such as checkpoint inhibitors, to enhance its efficacy. With its TCE platform, AbCellera Biologics Inc. (ABCL) is poised to make a significant impact in the treatment of cancer and is well-positioned to establish itself as a leader in the field of immuno-oncology.
AbCellera Biologics Inc. (ABCL) is also prioritizing its internal programs, with a focus on advancing its lead assets, including ABCL635 and ABCL575, into clinical trials. The company is also investing in the development of a new industry-standard quality manufacturing facility and has established partnerships with major pharmaceutical companies, including Eli Lilly.
Overall, ABCL ranks 2nd on our list of best Canadian penny stocks to buy according to analysts. While we acknowledge the potential of ABCL to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ABCL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.