Are These Silver Penny Stocks On Your List This Week?
The story of the last few weeks has centered around Reddit penny stocks. I’m not talking about the social media platform all of a sudden becoming a trading platform. I’m talking about a mad dash by users to rally behind certain stocks. Last week we saw GameStop (NYSE: GME), AMC Entertainment (NYSE: AMC), Express Inc. (NYSE: EXPR), and countless others experience higher than average activity thanks to the platform. The push coming from retail traders focused on making their presence known in a world where large funds usually called the shots.
With this, we’ve seen a resurgence and an awakening of sorts. No longer were Robinhooders without a voice. Every outlet from CNBC to Fox reported on this craze. Even major brokers got caught up in the mix. But unlike retail traders gaining acclaim, the brokers were under severe scrutiny. Brokers went as far as restricting access to certain stocks. How far?
Brokers like Robinhood and Webull restricted access to actually buying shares in these companies. It was closing transactions only. This brought with it a tidal wave of backlash. Everyone from Mark Cuban and Dave Portnoy to Chamath Palihapitiya and even Elon Musk were voicing their disgust with what was going on.
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While there are still restrictions going into the new month, there’s something else to be aware of. That is silver. Late last week and over the weekend, the discussion began building around the precious metal. One base case was that economies beginning to turn around could spur momentum for industrial metals like silver and related metals.
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This wasn’t a conversation about a short squeeze in its traditional sense. But more of a supply and demand scenario and uncovering potential misconduct. One of the main focus points was a nearly $1 billion ($920 million to be exact) payment JPMorgan made in a misconduct settlement. In particular, the bank settled charges that it engaged in manipulative trades of futures tied to precious metals & certain treasury bonds.
“This action sends the important message that if you engage in manipulative and deceptive trade practices you will be caught, punished, and forced to give up your ill-gotten gains.”
CTFC Division of Enforcement Director James McDonald
Aside from the “forthright” initiative to “stick it to the banks,” there may be an economic play here as well. Silver has a wealth of industrial uses, especially in different technologies. This ranges from medical to electrical components you might find in things like cell phones and computers. You’ve also got things like solar panels with demand for silver on photovoltaic cells jumping since 2000. It also has plenty of uses in things like battery technology. With the mad dash for renewable energy and electric vehicles, silver might also have a practical use to justify greater demand.
Silver Penny Stocks To Watch
One of the discussion topics among Reddit stock traders is that this silver excitement could be made up. One Redditor said that this is an attempt to take attention away from stocks like GameStop and AMC. Other accounts stated that it’s a media-fueled frenzy to help out the hedge funds. Regardless of the underlying reasoning, the market is speaking loudly about silver right now. In light of this, it might not hurt to have a few silver penny stocks on the watch list if the momentum continues this month.
- Comstock Mining Inc. (NYSE: LODE)
- Almaden Minerals Ltd. (NYSE: AAU)
- Great Panther Mining Limited (NYSE: GPL)
- Avino Silver & Gold Mines Ltd. (NYSE: ASM)
Comstock Mining Inc.
One of the things you’ll probably come across reading about mining stocks, in general, is that not many of them have the same news flow as you would see from a biotech company, for instance. Needless to say, the sector sentiment has become a big driver for silver stocks as it tends to be for most precious metals.
Comstock Mining develops mineral resources with a strategic focus on high-value, cash-generating, environmentally friendly mining. The company also has significant interests in property in the historic Comstock and Silver City mining districts. One of the standouts for Comstock is its approach to mining. It has become far more aware of its environmental responsibility and taken up a strategy to implement enhancements & technologies offering processes for precious and strategic metals recovery.
“We sustained all of our scheduled cost reductions and subsidies, repaid our senior secured debt, and implemented our realignment objectives in 2020, positioning ourselves for new, high-growth activities. The successful sale of Lucerne enabled the repayment of all of our senior secured debt and, together with monetizing non-strategic assets, funds the implementation of our strategic plan,” Corrado De Gasperis, Executive Chairman and CEO, stated in the company’s performance update earlier this month.
LODE shares saw a big jump last summer and have traded sideways since then. Last week Friday, however, saw a spark of momentum once again. Premarket on Monday that continued but will that be sustainable heading into February?
Almaden Minerals Ltd.
Shares of Almaden were in a strong uptrend for most of 2020. In December, AAU stock ended up cratering due to uncertainty surrounding the company’s Ixtaca gold and silver project in Mexico. But at the start of 2021, Almaden began to recover slowly. In fact, taking Friday out of the equation, shares of AAU stock have managed to rebound by as much as 75% from December’s lows.
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Last week, Friday, the stock ended up making new 2021 highs after trading some of its largest volumes in years. Almaden owns 100% of the Ixtaca project in Puebla State, Mexico, subject to a 2.0% NSR royalty held by Almadex Minerals Ltd.
Again, Almaden hasn’t had many new developments recently. However, the momentum behind precious metals, including silver, has helped give a boost on Monday.
Great Panther Mining Limited
Another one of the popular silver penny stocks to watch is Great Panther Mining. While it didn’t have the milestone day Almaden had, there was a noticeable move in the stock. Shares of GPL stock have weathered much of the storm that hit certain mining stocks in late 2020. However, GPL did have a bit of a slide early this year. The miner started the year trading around $0.89 and ended up dropping to lows of $0.75. Interestingly enough, this 75 cent area is one that GPL has bounced off several times over the last few months. In July, October, and November, shares dipped to this area on the chart and, like clockwork, ended up rebounding soon after.
The last few sessions have mirrored this same trend. What’s more, Great Panther also has a fundamental event to take notice of. Last week, the company filed its “Technical Report on the 2020 Mineral Reserves and Mineral Resources of the Tucano Gold Mine, Amapa State, Brazil.” The Report supports the Great Panther’s updated Mineral Reserve and Mineral Resource estimate for Tucano, announced in a release in December.
Aside from this, the company had announced its fourth quarter and annual 2020 production results from its three 100% owned mines in Brazil and Mexico. Consolidated metal production came in at 150,051 gold equivalent ounces. This was inclusive of 133,031 Au oz and 1,118,094 silver ounces, a 2% increase over 2019.
Avino Silver & Gold Mines Ltd.
One of the stand-outs among mining stocks is Avino Silver. The company is a silver producer with a pipeline of silver, gold, and base metal properties in Mexico. Similar to the other names on this list, ASM has benefited greatly from the excitement in the broader mining sector, specific to silver.
An interesting thing to note is what was recently filed amid the surge in silver momentum. Avino filed an At The Market share offering for up to $25 million last week. Usually, when companies announce financings, shares tend to drop on fears of dilution. However, with the rampant buying of silver penny stocks right now, this has almost been a “nonevent” for traders. Will that end up coming back to bite them down the line?
