Epicenter Stocks To Watch As Economies Slowly Reopen
When you’re talking about popular penny stocks, some of the top names can be found among a list of epicenter stocks. What are epicenter stocks? Originally popularized by Fundstrat’s Tom Lee, epicenter stocks are those which have been beaten down the most by coronavirus restrictions. They are also the ones that could become the fastest to recover in light of an economic reopening.
With this in mind, traders and investors should begin thinking about which sectors and industries have suffered the worst. From there, what could a vaccine mean for reopening stocks? If you look at travel and leisure, which were some of the hardest hit, even a slight glimmer of hope sets these ablaze. However, it’s also important to understand that many of these companies have faced significant hardships.
Many of the travel names might spike periodically on good news but they’ve still been burdened by heavy debt loads and excessive cash burns. Then you’ve got other industries like energy and real estate. Many of these companies have worked tirelessly to restructure their finances in a way that would be appealing to long-term shareholders.
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But this isn’t to say that you should ignore this trend. In all honesty, some of the top names, no matter the financial situation, have been penny stocks working to recover their former glory. I’m talking about companies that’ve made continuous efforts to weather this pandemic storm. They may be penny stocks right now but will that remain the case should a full-fledged vaccine hit the marketplace? I’ll leave that decision up to you. With that in mind, are these on your list of epicenter stocks to buy or sell right now?
Epicenter Penny Stocks To Buy [or sell]: Ambev S.A.
Ambev S.A. (ABEV Stock Report) might be one of the companies that could do well whether the economy is reopened or not. Alcohol stock have managed to uphold a clear trend during the pandemic. When there’s news of a potential economic reopening, these same stocks also react favorably. The thing with booze is that people buy it when they’re happy, sad, bored, etc.
Ambev in particular has benefited from the latest bullish trend in consumer staples this month. Since the start of November, ABEV stock has managed to rally from around $2.15 to recent highs of $2.97 this week. Citigroup also recently upgraded the penny stock to Buy from Neutral, which came shortly after the company reported a stronger than expected third quarter.
Epicenter Penny Stocks To Buy [or sell]: Nokia
During the first quarter of the year, almost every industry was hit with a pandemic sell-off. Most of the tech and communications stocks weren’t immune either. Nokia (NOK Stock Report), in particular, suffered a blow that took it from around $4.50 to as low as $2.34 by mid-March. Since then it has made attempts at reclaiming its prior levels and actually did so in August. However, missed earnings, management changes, and the like didn’t help things toward the end of Q3.
Fast-forward to November, and NOK stock was #4 on the list of penny stocks on Robinhood to watch this month. The bigger point of focus was what would be revealed during the company’s Capital Markets Day. On November 15th, Nokia discussed a full review of its strategy, operations, and financial targets.
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While no details were given on the outcome of that so far, we can see that NOK has heeb recovering from its COVID slump. It’s also worth mentioning that Nokia has become one of the popular 5G penny stocks to follow. Over the last few months, the company has inked deals with major corporations including Deutsche Telekom most recently.
Epicenter Penny Stocks To Buy [or sell]: Party City Holdco Inc.
Party City Holdco Inc. (PRTY Stock Report) has been a long-standing name on our lists of epicenter stocks this year. Ever since hitting a low of 26 cents in March, PRTY stock has managed to steadily recover. This week, shares of PRTY reached their highest levels since the pandemic sell-off. What’s more, is that the Halloween season appears to become a boon to the company’s fundamental momentum. In its recent Q3 results, Brad Weston, Chief Executive Officer echoed this.
“Our Halloween results were ahead of our expectations, driven by strong results within décor and better than expected sales of costumes, despite the challenges of a pandemic-impacted backdrop.”
Weston said he was encouraged by the company’s core categories in October. This culminated in an evident continuation of the third quarter’s efforts. In Q3, Party city posted a strong earnings and sales beat with an EPS of 10 cents compared to estimates of a 32 cent loss per share. Sales also came in much higher at $534 million compared to analysts’ $489.3 million expectations. This week Party City participates in the Stephens Annual Investment Conference on Thursday.
Epicenter Penny Stocks To Buy [or sell]: SM Energy Company
SM Energy Company (SM Stock Report) is on this list of epicenter penny stocks as the stock has seen a solid surge this month. With highly speculative trading focusing on economic recovery, energy names have become part of the conversation. SM Energy produces crude oil and natural gas.
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Following the massive sell-off in oil during the first few months of the year, oil and gas stocks have been struggling to maintain operations in a low price environment. While the price of crude is higher compared to where it was in April, it’s still much lower than where it was at the start of the yea. Regardless, companies like SM have hit a bit of a stride in November as vaccine news helped boost optimism. SM stock is up almost 100% since the beginning of the month.
This week, the company reaffirmed its borrowing base and agreed to complete South Texas wells. The recent upbeat sentiment around energy stocks has also seen the analyst community grow bullish. In the case of SM, analysts at MKM Partners recently boosted their price target to $7 from $5. The firm maintains a Buy on the penny stock.
