Is It Time To Find Epicenter Penny Stocks To Buy Right Now?
You’ve probably read some of our articles discussing “epicenter stocks” over the last few months. In particular, epicenter penny stocks are what we’ve targeted. Earlier this year, Fundstrat Global Advisors’ Tom Lee broke down the trade idea behind these so-called epicenter stocks, also known as “reopening stocks”.
“I would say that the epicenter stocks, which are the companies hit hardest by the crisis, are no different than what internet [stocks] looked like post-bubble in ’02. People wanted to stay away from internet [stocks,]…”
Tom Lee, Fundstrat Managing Partner
His stance one the idea is that these epicenter stocks are oversold. Many could also be very undervalued in the long run. But a lot weighs on the future outcome of things like stimulus measures to ensure a speedy recovery.
“…as you know the best-performing stocks after the internet bubble crashed were internet stocks because you could buy 100 internet stocks and you could have 96% of them go to zero [even if] only 4% survived, and you still outperformed the S&P 500 over the next 10 years.”
Some of these so-called epicenter sectors include things like leisure, travel, technology, and even energy, which have all, in some respects, felt the immense burden of COVID blowback. While investors will search for the prime epicenter stocks to watch, we’ll focus on the smaller names. Those that have seen some momentum building recently as stimulus discussions show some semblance of hopefulness, be it soon or after the elections. With this in mind, are these epicenter penny stocks to buy or avoid right now?
Trending Epicenter Penny Stocks:
- Marathon Patent Group Inc. (MARA Stock Report)
- Drive Shack Inc. (DS Stock Report)
- Muscle Maker Inc. (GRIL Stock Report)
- Pioneer Power Solutions Inc. (PPSI Stock Report)
Epicenter Penny Stocks To Buy [or avoid] #1: Marathon Patent Group Inc.
Marathon Patent Group Inc. has been one of the tech names on our lists of stocks to watch for months. In fact, this year, we began following things more closely in May where MARA stock, at the time, was trading around $0.60. While we’ve seen this epicenter penny stock skyrocket to highs of over $5 and pull back in September, the recent trend is more bullish than anything else. Keep in mind that tech stocks felt the early brunt of COVID, which ultimately pulled an about-face with things like eCommerce and digital entertainment shining a more positive light on the sector. Marathon, in particular, is in a unique situation between tech and a subset, cryptocurrency/blockchain penny stocks.
The company recently inked a deal that expands its cryptocurrency mining footprint. Through its deal with Beowulf Energy, Marathon will deploy 11,500 next generation S19 Pro Antminers (110 TH/s) it previously acquired through its partnership with Bitmain Inc. at the Data Center. The company says these miners will generate 1.265 EH/s when fully deployed, which is full anticipated through Q2 2021.
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This week, the company appointed former Las Vegas Monorail executive, Simeon Salzman as the new CFO. This latest development gave another boost to the market. How the world will handle the “touchless” ideology some assume will take hold once reopening expands could involve crypto companies. Will Marathon stand to benefit from such a move? Year to date, MARA stock is up nearly 200%.
Epicenter Penny Stocks To Buy [or avoid] #2: Drive Shack Inc.
Drive Shack Inc. is another one of the epicenter penny stocks we’ve discussed for months as well. It hasn’t experienced the same level of follow-through as MARA stock has. However, the company continues navigating the volatile waters that COVID has brought. Similar to Top Golf, Drive Shack is a leisure stock with a corporate focus on driving ranges.
The first time we came across this company was in early summer after initial reopening discussions began taking shape. I won’t get into a history lesson on Drive Shack but just look at the chart to see how DS stock has faired over the last few months. Overall, it’s been a volatile swing. From May to early June, DS shares took off from around $1 to over $3. Since then it’s been a slow decline.
One of the recent developments that’s put Drive Shack back on the radar is what it announced Monday. The company reported that it sold its Rancho San Joaquin golf course, in Irvine, California. American Golf, a subsidiary of Drive Shack Inc., will continue to operate the facility under a management agreement. Furthermore, at closing, the company received net proceeds of roughly $33.6 million in cash.
“This is a key milestone in our long-term strategic financial plan focused on providing capital to fund a path to operating 50+ Puttery venues by the end of 2024. I look forward to sharing more details on our upcoming third quarter earnings call in early November.”
Hana Khouri, Chief Executive Officer, Drive Shack
Epicenter Penny Stocks To Buy [or avoid] #3: Muscle Maker Inc.
In a similar light as other restaurant brands, Muscle Maker Inc. has tried to weather the COVID storm. It’s also a very new public company in comparison to others on this list. Over the last few weeks, Muscle Maker has made attempts to right the ship, so to speak. In a climate where social distancing is the norm, any restaurant, regardless of fast-casual or high-end, has run into trouble.
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Late last week, the company came out with a letter to investors, which included a strategic update. In it, Muscle Maker outlined its growth strategy, which includes employing a “non-traditional location” approach. The company explained this as an asset so as to move with the market and stay ahead of emerging trends.
“Locations like military bases, airports, universities, casinos, kiosks, food trucks and ghost kitchens are all examples of non-traditional locations,” the company said. Muscle Maker also plans to deploy “ghost kitchens” where it will focus on “delivery-only”.
“We believe ghost kitchens are highly disruptive to the restaurant industry especially given the current Covid-19 climate and the growing need for off-premise food services and delivery.”
Whether or not this “ghost” approach ends up becoming a revenue driver is yet to be seen. However, what we can see is that since making that update, GRIL stock has climbed by a little over 12% so far. Will the reopening trend help bring further momentum moving forward?
Epicenter Penny Stocks To Buy [or avoid] #4: Pioneer Power Solutions Inc.
Obviously, energy stocks took a big hit this year. Pioneer Power Solutions Inc manufactures, sells and services a broad range of specialty electrical transmission, distribution, and on-site power generation equipment for applications in the utility, industrial, commercial and backup power markets.However, from a stock price perspective, Pioneer Power has actually traded more sideways than anything else leading up to October. That changed a few weeks ago after PPSI stock made an explosive move to highs of $9.43.
Speculation surrounding hurricane stocks, for instance, brought a focus on “backup power” companies. In addition, the overall bullish sentiment with regard to energy stocks, helped boost PPSI earlier this month. Following some recent consolidation, the epicenter penny stock is back in motion. Tuesday’s trading activity saw PPSI bounce from $2.70 to highs of over $4.20 during the morning session. Though, even in light of this market momentum, the general movement has been boosted by more sympathy momentum than anything else. Can this stock see follow-through into the second half of the week or is the rug about to get pulled from underneath it?
