Penny Stocks Trading Higher As $1,400 Stimulus Checks Roll Out
Despite the market’s hesitation before the Fed meeting today, penny stocks have remained a broad focus for traders. These highly volatile shares trade for less than $5 and continue attracting swing traders and day traders alike. But with $1,400 stimulus checks rolling out this week, should you risk this money on cheap stocks?
Are Penny Stocks Good To Buy?
Before we get into the list of penny stocks to watch, you’ve got to ask yourself if these low-priced shares are worth the risk. Let’s face it; the stimulus was passed to get cash in Americans’ hands to help them weather the extended impact of the pandemic.
I think the ideal scenario in the government’s eye originally was that this would go toward things like catching up on bills, paying for groceries, and the like. However, as we’ve seen over the last year, the stock market has taken the attention of millions of people.
With the last round of stimulus, we saw Reddit boards light up with posts flaunting the fact that many had put their “stimmy” into a Robinhood account. Was this responsible? I guess that would all depend on who you ask. At the same time, it’s entirely your prerogative of what to do with your stimulus money, those who understood how to day trade were able to use the stimulus check as seed money.
Is Spending Your Stimulus Money On Stocks Worth It?
Let’s look at the history of “the stimmy” over the past 12 months. The first round passed last year, sending checks worth $1,200 out to individuals with adjusted gross income below $75,000. Those who filed 2018 and 2019 returns at the time would’ve received their deposits by April 15th.
For simple example purposes, a $1,200 stimulus check invested in the Russell 2000 Small-Cap Index ETF (NYSE: IWM) at the opening bell on April 16th – 1 day after deposit – would have gotten roughly 10 shares of the ETF. For some context, the IWM opened at $118.09 on that date. Today, those same 10 shares of the IWM ETF are worth over $2,200 based on the opening price on March 17th. That’s an increase of over 80% during that time period.
Those who were bolder and looked at individual stocks could have seen an even bigger move. Take, for instance, some of the popular electric vehicle penny stocks from last year. Nio Inc. (NYSE: NIO), for instance, was trading at $3.30 at the open on April 16th. At that price, 363 shares of NIO stock could’ve been bought for a little under $1,200. As of this week, shares of the former electric vehicle penny stock are trading above $42 per share. That means the same 363 shares from last year are now worth over $15,000 as of this week.
Penny Stocks To Buy [Or Avoid] Right Now?
Whether you use your stimulus money to pay your bills or buy a stock is totally up to you. With the market continuing to trade near record highs, it’s hard to ignore the bullish sentiment we’ve seen during last year. Needless to say, there are several active penny stocks to watch right now. Deciding if they’re best to buy or avoid entirely is something I’ll leave up to you.
- Liquid Media Group Ltd. (NASDAQ: YVR)
- Isoray Inc. (NYSE: ISR)
- Guardion Health Sciences (NASDAQ: GHSI)
- Allied Esports Entertainment Inc. (NASDAQ: AESE)
Liquid Media Group Ltd. (YVR)
Tech has been a big component of the breakout trend we’ve seen over the last 12 months. Despite a recent rotation out of certain tech names, many small-cap tech stocks have weathered the storm well. Liquid Media has been one of these. The company recently inked a distribution deal with Atari. Liquid’s video-on-demand platform, SlipStream, will be available for donload on Atari’s VCS PC/xonsole hybrid system that will be available for preorder at GameStop.com and AtariVCS.com.
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Ronald W. Thomson, CEO of Liquid explained that “Teaming up with Atari also supports our recalibrated business strategy, and offers wider exposure for Liquid’s Slipstream service, known as the Netflix for adventure outdoor films, and our Reelhouse video community.”
This was the first major step in Liquids transitional period. The recent focus is on shifting to a solutions-driven business. The transition has also come with the appointment of a new CEO, Ronald Thomson. Announced in January, Thomson has a strong background in business development building successful tech companies. With this latest trend, momentum has begun building as a tailwind, will YVR be one of the names on your list of penny stocks to watch?
Isoray Inc. (ISR)
One of the other parts of the market gaining interest has been biotech. Isoray is a clear example of this, as 2021 became a big year for the company and the stock. Shares of ISR have climbed from under $0.50 to over $2.80 at the start of the year and currently sit around $1.50 this week. This week the company presents at the Oppenheimer Annual Healthcare Conference. Management hosts one-on-one and group meetings with institutional investors.
Isoray’s subsidiary, Isoray Medical, produces Cesium-131 brachytherapy seeds. This treatment platform, also known as Cesium Blu, is designed for treating cancer. Earlier this year, ISR stock rallied following news that it received FDA 510(k) clearance for the use of C4 Imaging’s Sirius® positive-signal MRI Markers with Isoray’s Cesium-131.
With a broader focus on cancer stocks lately, many companies with novel treatment platforms have focused. Furthermore, in light of this week’s presentations, ISR could be one of the stocks to watch to see if its message is resonating with institutions right now.
Guardion Health Sciences (GHSI)
Another one of the biotech penny stocks to watch right now is Guardion Health Sciences. The penny stocks fell victim to strong selling pressure along with most of the market in late February. What also compounded this drop was news that the company would effect a reverse stock split of common shares.
However, fast-forward to this week and GHSI stock seems to have held support around its 200-day moving average. The company also participates in the Maxim Group Emerging Growth Conference this week. CEO Bret Scholtes presents details on the company at the conference. In a similar situation as Isoray, it will be interesting to see the reaction from the investing community in light of what Guardion says at the conference.
One of the biggest points of focus for the company has been on its ocular health nutrition offerings. In December, the company announced developing a new Vision/Energy support drink designed for adult consumers. There is also a formulation that Guardion planned to roll out targeting the youth market to support video gaming and other tasks requiring close-up device viewing.
Not much has been announced recently other than regaining compliance with Nasdaq’s minimum bid requirement. However, could the latest attention on esports be a catalyst for sympathy sentiment in companies like GHSI?
Allied Esports Entertainment Inc. (AESE)
Speaking of esports, Allied Esports has also gained a good amount of momentum recently. Since November, shares of AESE stock have climbed from under $0.90 to over $2.80 as of this week. One of the big updates that came about recently concerned one of the big names in gaming, altogether.
Bally’s Corporation (NYSE: BALY) offered to buy Allied Esports for $100 million. One issue is that Allied had already agreed to sell one of its major assets, World Poker Tour®, for a cool $78.25 million to Element Partners, LLC. Furthermore, Allied was in the process of looking for “strategic alternatives” and potentially turning into an entertainment holding company.
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This week, Allied announced that its Board (coincidentally) came to an understanding that Bally’s proposal was superior to Element’s. So, I guess $20 million makes a little bit of a difference in this case. I say this because, when the original details were revealed, Allied’s board was recommending stockholders to approve the transaction with Element.
