Would You Buy These Penny Stocks Based On Analyst Ratings?
Penny stocks are some of the fastest moving names in the stock market. It might be stocks under 10 cents or a $4 stock. Whatever the case may be, traders buy and sell these with a simple goal, which is to make quick money. While some breakouts last longer than others, it’s important to understand that volatility plays a big role.
Take, for instance, Weidai Ltd (WEI Stock Report). Today, shares of this penny stock saw explosive gains, early with some of its highest volumes all year. What’s important to note is that yesterday, WEI stock hit a fresh 52-week low. Tuesday, with no apparent catalyst, shares of WEI rallied from $0.85 to highs of $4.68 before the lunch hour.
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One thing we can point toward is the fact that Chinese penny stocks with low floats and relation to either energy or electric vehicles have gotten play recently. In light of this, in an apparent sympathy move, WEI stock saw an explosive move echoing a similar breakout from another Chinese penny stock on Monday, KXIN.
Day Trading vs Swing Trading Penny Stocks
While these short-term breakouts are incredible for day traders, they can leave much to be desired by longer-term swing traders. This is the case with penny stocks and a lot of it comes down to the follow-through in the market. Short term breakouts tend to lack in that department. Meanwhile, longer-term swing trades lack the immediateness of big percentage gains. Needless to say, for those searching for a more fundamentally charged trend, seeking out info from analysts might help.
A quick disclaimer here, not all penny stocks covered by analysts end up going in the directions analysts say. However, the insight that is given can help you make a more educated decision when it comes to penny stocks to buy. If you’re just getting your feet wet in the stock market today, these analyst reports tend to highlight key points about the companies.
After taking a look through the details, you’ll have a good idea of what Wall Street might think about certain companies. From there, it’s up to you to continue researching, assess the current trend, and decide if such stocks are good to buy or avoid. In light of that, do you agree with analysts on these penny stocks?
Penny Stocks To Buy [according to analysts]: Oncolytics Biotech
Analysts appear bullish on Oncolytics Biotech (ONCY Stock Report) right now. Among this year’s ratings, Royal Bank, Roth Capital, Echelon Wealth Partners, and Canaccord Genuity all have Buy ratings on the stock. In looking at the penny stock’s current trend, ONCY shares have been on the move for the better part of the last month and a half. From September 4th to this week, the penny stock has rallied from around $1.60 to highs of $2.44.
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One of the larger focuses for investors recently has been on immunotherapy stocks. Thanks to a multi-billion dollar deal between Gilead & Immunomedics. The deal focused on Gilead gaining access to Immunomedics’ breast cancer platform. Where Oncollytics comes into focus is for its treatment candidate, pelareorep. It’s an intravenously delivered immuno-oncolytic virus. The compound induces selective tumor lysis and promotes an inflamed tumor phenotype turning “cold” tumors “hot” to treat a variety of cancers.
This week the company appointed Richard Vile, Ph.D., to its Scientific Advisory Board. He’s a notable key opinion leader in oncolytic viruses and adoptive T cell therapies. On the heels of this news, ONCY stock caught a surge of momentum this week. In fact, on Tuesday, the penny stock made a new 4-month high.
Penny Stocks To Buy [according to analysts]: Aileron Therapeutics
Aileron Therapeutics (ALRN Stock Report) is another one of the penny stocks analysts appear bullish on. Among William Blair, HC Wainwright, and Canaccord Genuity, all three have Buy ratings on the stock. Though there weren’t any price targets offered. Despite this case, ALRN stock has been one to watch for most of the year. This isn’t just for it’s short-term volatility but overall, its trend is very bullish. Year-to-date, the penny stock is up nearly 230%.
October has been one of the more explosive months for the penny stock and what has helped it were several updates. First, Aileron announced that its proof-of-concept data for ALRN-6924 would be featured in a late-breaking poster presentation during the 32nd EORTC-NCI-AACR Annual (ENA 2020) Symposium on Molecular Targets and Cancer Therapeutics. The event is being held virtually later this week. ALRN-6924 is the company’s chemoprotective medicine to selectively protect healthy cells in patients with cancers that harbor p53-mutations. The focus is on reducing or eliminating chemotherapy-induced side effects.
Following this presentation, the company plans on hosting a conference call next Monday. Management will discuss results from its Phase 1b proof-of-concept study of ALRN-6924. Aside from the analysts ratings on the stock, trading has clearly become more active. Leading up to this presentation, I’m sure traders will focus on momentum and, of course, follow-through. It’s also worth mentioning that ALRN stock has off and on our lists of penny stocks for some time now. Starting in late-June of 2019, we’ve watched-first-hand the volatile move this biotech penny stock has made.
Penny Stocks To Hold [according to analysts]: Southwestern Energy
Earlier today we discussed how energy penny stocks were gaining ground this week. Southwestern Energy (SWN Stock Report) is among those following this trend. Among numerous analysts covering this penny stock, the majority have a Hold or the equivalent to a Hold rating on the penny stock. Most recently Piper Sandler reiterated its Neutral rating but lowered its $3.50 target to $3. Needless to say, that doesn’t mean some analysts aren’t bullish on the natural gas stock.
Morgan Stanley analysts recently upgraded their rating from Underweight to Equal-Weight. This came just a few months after analysts at Wells Fargo did the same. The latter also has a $4.50 price target on the energy penny stock. The next few days could be interesting if SWN stock is on your watch list. Southwestern Energy is set to report its earnings in 10 days. While the recent trend in things like “blue gas stocks” remains strong, we’ve still got the election to keep in mind. Certainly, the discussion on energy will be a topic leading up to the final days of this election year.
One of the sticking points for energy companies this year has been access to capital. Rather, finding ways to deal with capital they’ve already raised and meeting debt requirements. Earlier this month, Southwestern Energy announced that its bank group took supportive actions in light of the current climate.
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“Our existing deep inventory of premium, Tier 1 locations in Appalachia supplemented by the high-quality assets of Montage, provide us with expanded asset coverage above our borrowing base. The acquisition and associated capital market transactions further enhance the financial resilience of Southwestern Energy and solidify our path to meaningful free cash flow generation and debt reduction while delivering differentiated shareholder value,” said CEO Bill Way.
