Speculative Ventures: Two Stocks for the Discerning Investor

The vulgar pursuit of immediate riches continues to preoccupy many, but a more considered approach – the acquisition of undervalued assets – remains, for the patient investor, a path to modest prosperity. One need not chase the latest frenzy; a little digging often reveals opportunities overlooked in the general scramble. The market, after all, is rarely rational, and sentiment, that fickle mistress, often dictates price far more effectively than balance sheets. We shall consider two such ventures, both currently trading at figures that, while not precisely generous, suggest a degree of potential.

Viking Therapeutics (VKTX 1.91%) and PayPal (PYPL +1.95%) represent, in their respective spheres, a gamble. One a speculative flutter on the whims of pharmaceutical approval, the other a slightly bruised, but still substantial, titan of the digital transaction. Both, however, offer a prospect of return that exceeds the tedium of a savings account.

Viking Therapeutics

Viking Therapeutics, currently valued at a modest $3.8 billion, presents a case study in the perils and potential of biopharmaceutical development. Its shares, finishing last week at just under $34, have experienced a mild twelve-month return of a mere 4%. This is not a company generating revenue, naturally. It exists in the ethereal realm of ‘potential,’ a state favoured by optimists and venture capitalists. The hope, of course, lies in the approval of a GLP-1 weight loss product. A veritable gold rush is underway in this particular field, and Viking, with its VK2735 subcutaneous treatment, hopes to claim a modest share of the spoils. Early trials suggest encouraging, if preliminary, results – an average weight loss of 14.7% on the highest dosage over thirteen weeks. A figure sufficient to excite the more excitable elements of the market.

Last August witnessed a brief, but alarming, panic. News of high discontinuation rates for the oral version of VK2735 sent the stock crashing a rather dramatic 40%. The market, it seems, prefers certainty, and a hint of difficulty is often interpreted as impending doom. The drug, however, remains in development, and discontinuation rates are not necessarily indicative of catastrophic failure. Indeed, the drug did not induce any alarming injuries or side effects, merely a degree of discomfort sufficient to persuade some participants to withdraw. The reaction was, to put it mildly, excessive. The stock has since rallied, and a doubling of value within the next twelve months remains, while not guaranteed, a plausible scenario.

Approval, or even the credible anticipation of approval, could trigger a surge in Viking’s value. The potential revenue is, naturally, substantial, and the possibility of acquisition by a larger pharmaceutical conglomerate – eager to participate in the GLP-1 frenzy – is not insignificant. There is, of course, risk. But then, what venture is without it?

PayPal

PayPal, a considerably more established entity, currently trades at less than $60, with a market capitalization of $54 billion. A twelve-month loss of 36% suggests a degree of dissatisfaction amongst investors. The proliferation of payment options, and the attendant anxieties about PayPal’s continued dominance, are understandable. Yet, with over 45% market share, and more than 430 million active users, it remains the go-to option for a considerable number of transactions. The simplicity of the system, and the comfort derived from a familiar name, provide a considerable advantage.

Business is not, admittedly, booming, and the growth rate has decelerated in recent years. However, economic conditions are also less than ideal. As the economy improves, so too might PayPal’s fortunes. The company, meanwhile, is exploring new avenues, such as a partnership with OpenAI, the owners of ChatGPT, which will allow merchants to sell their products through the chatbot. A curious alliance, perhaps, but indicative of a willingness to adapt.

The expansion of the Venmo app, to encompass everyday purchases rather than merely peer-to-peer transfers, is another sensible initiative. The offer of cash back for Venmo debit card purchases is a modest, but potentially effective, incentive to encourage spending. Trading at just 11 times earnings, PayPal appears, at present, to be a deeply discounted stock, worthy of consideration. The business remains fundamentally sound, and while growth is currently in the single digits, management is, at least, making an effort to strengthen it.

2026-01-21 23:22

Viking Therapeutics

PayPal

Read More