When it comes to penny stocks, there is always a possibility of even a small move resulting in substantial gains. There is a huge market for these stocks despite what some may say. But investors need to be extremely careful when putting together a list of penny stocks. Just as quickly as these stocks can jump, they can fall as well.
Therefore it’s very important to know the basics of investing at the very least. Keep an eye on penny stock news, technical moves, and stock volume, for instance. Negative news can result in bearish sentiment while lower volume could pose major risks to exiting a trade.
We put together an article about some of the basics of penny stocks: How To Make Money With Penny Stocks. With all of this in mind, take a look at two penny stocks to watch for August.
Penny Stocks Making Headlines #1 Catalyst Pharmaceuticals (CPRX)
The first penny stock to watch is orphan drug maker Catalyst Pharmaceuticals Inc (CPRX – Stock Chart). The company has had a very interesting year so far. Catalyst stock gained substantially after it launched its product Firdpase this year. The drug treats Lambert-Eaton myasthenic syndrome. The disease weakens and fatigues the body’s voluntary muscles (a very basic explanation).
However, another medicine meant for the same treatment was approved by the powers that be. But Catalyst has challenged its legality in court. Although it cannot be speculated how the challenge will work out, experts believe the company has the potential to grow its sales to $200 million a year from Firdpase alone. Based on the potential of this treatment, Catalyst could be a biotech penny stock to watch in the coming months.
Penny Stocks Making Headlines #2 Fitbit Inc (FIT)
Another penny stock to watch is wearable device maker Fitbit Inc (FIT – Stock Chart). This penny stock has been one of the most active penny stocks on Robinhood for months. But it hasn’t been for its breakout qualities. In fact, Fitbit has been in a downward spiral ever since the beginning of the year. This came as sales plunged significantly.
The company announced its Q2 2019 financial results this week. So what happened? Although it managed to beat analysts’ expectations, Fitbit cut its projection for the next quarter as well as for the full year. Stuff like this is not a great sign for investors. As a result, FIT stock is getting hammered this week.
Were there any positives? The answer: not really. Fitbit had introduced the cheaper Versa Lite product but the company announced the sales had been disappointing. After the guidance was cut, Fitbit stock sank to record lows. Fitbit reduced its full-year estimates and now expects 2019 revenue to be in the range of $1.43 billion-$1.48 billion, compared to its previous projection range of $1.52 billion – $1.58 billion in sales. Can Fitbit ever recover?
