At the end of each quarter, both blue-chip and penny stocks usually report one form of earnings or another. This could either be a quarterly or full-year earnings report. Typically, quarters end on the last day of March, June, September, and December. Seeing its March 31st, a slew of earnings came out this week.
There’s almost always a speculative effect either leading up to or following the official numbers. Whether the earnings report is positive or negative, there is no doubt that it can have a high correlation to the prices of certain penny stocks. Often, we see that some companies will lose value right before earnings are reported. This is common and is a sign of jitters before financial data releases. Then you’ve got the bullish trend before earnings that can end in a sell-off on the earnings date. It’s a classic “buy the rumor, sell the news” event.
Outside of the market action, earnings season also provides invaluable insights into a company’s financial situation. As investors, balance sheets and income statements are some of the most important aspects of a business to consider. These can show whether a company is profitable, how much money it has on hand, and its future outlook.
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Often, we will see c-level employees commenting on earnings and giving information on where the company could be headed. So, as March comes to an end, we will continue to see earnings reports being released. With this in mind, here are three companies to watch with earnings on the horizon. After seeing the numbers, will any of these be on your list of top penny stocks to buy?
- SG Blocks Inc. (NASDAQ: SGBX)
- Jaguar Health Inc. (NASDAQ: JAGX)
- Ideanomics Inc. (NASDAQ: IDEX)
SG Blocks Inc.
Originally, SG Blocks was supposed to report its fourth-quarter results on March 25th, yet on that day, SG Blocks announced it would be postponing its earnings for an indeterminate amount of time. In the meantime, it may not hurt to take a deeper dive into SGBX stock ahead of this unknown earnings date.
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SG Blocks is one of the leaders in code-engineered cargo shipping containers. Its primary goals are greener construction, fast execution, and stronger buildings. Containers have risen to popularity as a building material in the past few decades. This is thanks to the low cost/high efficiency and the rapid speed at which these buildings can be constructed.
A few weeks ago, SG Blocks announced a new website, SG Home. This will offer a new product line of eco-friendly, affordable homes that utilize its containers. Paul Galvin, CEO of SG Blocks, stated that “It’s been a major goal for SG Blocks to offer our own factory-built homes since we accomplished our IPO. We have known for some time now that there has been a market gap that we believe we could fill very well, in terms of affordable homes that were of quality, sustainable, and eco-friendly.”
What’s more, the company has also gotten involved in things like electric vehicle charging stations using its container designs. We’ve also seen the company get into COVID-19 testing. Obviously, all of its developments from the 4th quarter and full year of 2020 will be revealed in the upcoming earnings release. But, right now, it looks like traders may be speculating ahead of this potential catalyst.
Jaguar Health Inc.
The commercial-stage pharmaceutical company develops plant-based, non-opioid prescriptions for both people and animals with GI disorders. This includes chronic and debilitating diarrhea.
On March 31st, Jaguar Health reported its consolidated full-year 2020 financial results. Its lead product candidate, Mytesi (crofelemer), generated around $9.3 million in net sales with more than $20.4 million in gross sales. This represents growth of over 64% and 148% year over year, respectively.
While total unit sales of Mytesi dropped slightly from the prior year, the company states that Covid had a small negative effect on its business. This resulted in a total yearly net loss of $33.8 million. However, it was around 12% less than the previous year’s net loss.
While the net loss mentioned above is slightly concerning, it’s worth noting that Jaguar’s business has improved over the previous year. You’ve also got to keep in mind that the company’s Italian subsidiary, Napo EU, is set to merge with Special Purpose Acquisition Company Dragon, or “the Dragon SPAC.” Why is this significant for Jaguar?
Napo EU has a license for Mytesi for the European marketplace (excluding Russia ). Napo team members had a scientific advice consultation meeting with a European Union regulatory authority on March 15. The consensus from the meeting is that diarrhea in infected COVID patients is a recognized unmet need in the EU. That means diarrhea treatment in this patient population would be eligible for the European Medicines Agency’s conditional marketing authorization pathway.
This essentially provides a fast-track application review process during public health emergencies. The regulatory authority requested that Napo develop a clinical protocol synopsis for a placebo-controlled trial in infected COVID-19 patients for their review, which has already been submitted. So with the potential for multiple upcoming milestones & strong earnings results, JAGX could be one of the penny stocks to watch heading into April.
Ideanomics Inc.
Similar to JAGX, Ideanomics reported its full year 2020 finical results on March 31st. Before we dive in, let’s take a closer look at what the company does. Ideanomics develops technologies for industries such as financial services and electric vehicles. Its mobility division provides services to aid in the adoption of electric vehicles for fleet operators. This includes services such as vehicle procurement, sales, financing, leasing, and energy management solutions. Its Ideanomics Capital business provides tech and service used in increasing the efficiency and transparency of high potential, growth industries.
In its full-year report, IDEX brought in revenue of $26.8 million. Alf Poor, CEO of Ideanomics stated that “we are very pleased with the transformation that took place this past year. Despite a year highlighted by Covid-19, we were able to build the groundwork for 2021 and beyond for Ideanomics and we are excited for what the future holds with our recent activity across the EV ecosystem and developments in EV charging infrastructure.”
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One of the interesting aspects of its financial report is the growth of its EV division. In 2019, EV only accounted for $2.7 million of its revenue. Last year, however, EV brought in more than $19.5 million, representing an increase of more than 600%. Ideanomics reported a gross profit of $2.1 million and ended the year in a strong cash position, with around $166 million on hand. These figures show several positive signs about the company and could be hot button items for the market to keep in mind.
