Here’s one exciting healthcare penny stock currently on my radar!

Sumayya Mansoor explains why this penny stock piqued her interest after a positive update and a potentially lucrative breakthrough.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Young black man looking at phone while on the London Overground

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

I noticed that penny stock Angle (LSE: AGL) saw its shares soar at the beginning of the month. The update that caused the share price spike has me wondering if I should buy some shares now or hold off and see how things play out. Let’s dig deeper!

Medical diagnostics

Angle is a medical diagnostic business. It specialises in products to help cancer diagnostics. Its patented Parsortix technology seems to be making waves in the medical industry, and this is the reason for its recent share price spike.

On 4 January, the share price soared from 13p to 31p. It has since come down to 19p, as I write (16 January). Over a 12-month period, the shares are down 36% from 30p at this time last year, to current levels. It’s not uncommon for small-caps to experience such fluctuations.

Promising update, future outlook, and risks

The update that caused Angle’s share price spike seems hugely positive, if you ask me. A clinical breakthrough in recent trials announced by the business seems to have boosted investor sentiment. It’s also worth noting that its patented tech is currently the only one of its type cleared by the US Food and Drug Administration (FDA), which could be positive news for the firm’s future prospects.

So what about these prospects then? Based on recent positive news, and the sad fact that cancer numbers are set to rise exponentially in the coming decades, there could be an opportunity for Angle to boost growth, performance, and investor sentiment.

From a bearish perspective, the fact the business hasn’t yet turned a profit is something to be wary of. I’ve seen many small caps in the past fluctuate up and down during times of trials or product testing with lots of promise but eventually fall by the wayside.

Next, I’ve noticed that Angle has had funding issues in the past. Similar to share price volatility, this is not uncommon for smaller businesses just starting out. A natural worry of mine is that the business may need to borrow to keep the lights on, or is at risk of being bought out by a larger business in the sector. Based on the most recent financial update, Angle seems to have enough money in the bank to remain operational until the second quarter of 2025, according to its balance sheet.

What I’m doing now

I must admit Angle’s recent news was promising and caught my eye. However, I currently have more questions than answers. Where will the cash and funding come from for product development? When will the business turn a profit? Is there a chance of a takeover if the firm runs into difficulties? Could borrowing damage the long-term profitability of the firm?

When there are more questions than answers, I tend to steer clear of most stocks, whether that’s a blue-chip or a penny stock.

I won’t be buying any Angle shares today. I must admit Angle has some hallmarks to be a potential growth stock. However, I’ll place the shares on my watch list and keep a keen eye out for updates and developments.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Sumayya Mansoor has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

If I put £20k into a FTSE 100 tracker fund, I’d get this as a second income

A lot of UK investors have money in Footsie trackers. Here, Ben McPoland explores how big a second income he…

Read more »

Investing Articles

2 FTSE 250 stocks I reckon could be savvy buys ahead of the next bull market

Our writer explains why these FTSE 250 picks could be shrewd buys now, as economic sentiment at present could mean…

Read more »

Middle-aged white man wearing glasses, staring into space over the top of his laptop in a coffee shop
Investing Articles

Will the Reckitt share price finally recover after announcing a major shakeup?

The Reckitt share price has climbed slightly higher today after somewhat positive news. But I wonder if it's enough to…

Read more »

Investing Articles

I could turn £20K into a monthly passive income stream worth £1,685!

This Fool isn't interested in leaving cash in the bank. She wants to invest to build a passive income stream…

Read more »

Investing Articles

After rising 43% in a month, is Oxford Nanopore now a top UK stock to buy?

Shares of Oxford Nanopore (LSE:ONT) have been surging recently. Is this a growth stock to buy for my portfolio after…

Read more »

Investing Articles

Is this a great opportunity for UK investors to buy Tesla stock?

Tesla stock slumped 7.3% in post-market trading. With the pound looking strong, our writer explores whether UK investors should think…

Read more »

Investing Articles

These boring but beautiful picks will always have a place in my Stocks and Shares ISA

Harvey Jones is building his Stocks and Shares ISA around seven FTSE 100 dividend stocks that should slowly reveal their…

Read more »

Investing Articles

This FTSE 100 stock has crashed nearly 70%! Would I be silly not to buy?

The share price of FTSE 100 icon Burberry is on the floor. But is now the time for this Fool…

Read more »