Whether you’re trading penny stocks or higher-priced names, you can’t ignore what’s happening in the stock market today. Traders have remained cautiously optimistic following a week’s worth of data and more still to come on Friday when markets will be closed. Employment data, jobs reports, next week’s March Fed minutes, and the start of another earnings season are beginning to come into focus.
Today, comments from the Fed’s Bullard brought some more to the table in the form of speculation. “I’m less enamored with the story that credit conditions will tighten appreciably enough to send the U.S. economy into recession,” Bullard said Thursday. “You’re only talking about a portion of the total amount of intermediation that’s going on…It’s not big enough by itself to send the U.S. economy into recession. Other things would have to happen.”
Bullard also said, “The good news about where we are right now is the labor market is robust and financial stress seems to be abated at least for now…So it’s a good moment to continue to fight inflation and try to get on that disinflationary path.”
With this backdrop, the hawkish tone from before seems to have subsided – for now. But will this trend last, or is it the calm before the storm? Regardless, plenty of cheap stocks have moved higher even when the stock market is down. It’s one of the things that seems to have become an attraction to trading penny stocks.
Penny Stocks To Watch
Danimer Scientific Inc. (NYSE: DNMR)
A few weeks ago, we had Danimer on a list of short squeeze penny stocks to watch. According to Fintel and TD Ameritrade, that figure sits around 19%, which is still the case at the time of this article. The company develops and produces biodegradable materials.
This week the company’s shares continued higher in an uptrend that has remained intact since it reported Q4 earnings. Danimer beat EPS estimates and missed on sales expectations. Management appeared optimistic about its prospects. Michael Hajost, Danimer’s Chief Financial Officer, commented, “We are intently focused on revenue growth, which we expect to accelerate starting in our second quarter. As a result, we expect improving operating margins and operating cash flow as we move through the year.”
This month, analysts have begun weighing in on the penny stock. Piper Sandler is the most recent to give its take. The firm maintained an Overweight rating and raised its price target from $6 to $7.
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TH International Ltd. (NASDAQ: THCH)
Tim Hortons…in China? Yes, and that’s what TH International does. The company is the exclusive operator of T Hos in the People’s Republic and has seen a very volatile year-to-date. Shares have rallied from lows of around $2.60 to highs of over $6.70 during that time. Following a multi-month pullback that began in February, traders seem to be growing more optimistic about the penny stock.
Much of that may have to do with the recent earnings results. TH reported Q4 and full-year 2022 results, including sales of $43.7 million for the quarter and an EPS of $0.11. Company CEO Yongchen Lu said, “In 2023, we will continue to execute our differentiated ‘Coffee Plus’ growth strategy by offering creative and customized beverage and food combos at compelling values. This initiative has been highly successful: the percentage of orders with food increased from 38.5% in the fourth quarter of 2021 to 47.1% in the fourth quarter of 2022. We plan to surpass 1,000 system-wide stores by year-end and further enhance our customer-facing technology, key pillars of our strategy of driving ‘absolute convenience’ for our guests.”
With a stronger outlook for the year, THCH stock popped on Thursday.
Forte Biosciences Inc. (NASDAQ: FBRX)
Biotech penny stocks are usually on the watch list in some form daily. Today Forte Biosciences has been one of the many gaining attention. The company develops platforms to target autoimmune diseases, including its FB-102 candidate, which Forte believes could have myriad indications with large markets.
There haven’t been many new headline catalysts to point to related to the recent spike in action. However, statements in its recent earnings results may have prompted some speculation. Mainly statements about FB-102 and how the company continues to “progress toward the clinic” later this year or early next year. Forte also brought on industry veteran David Gryska who was CFO at Celgene before the Bristol-Myers Squibb acquisition.
Tellurian Inc. (NYSEAMERICAN: TELL)
Liquified Natural Gas or LNG stocks have come back into focus as global trade continues raising eyebrows. Tellurian has seen its share price climb amid bullishness in the energy sector. The company specializes in liquified natural gas sales, marketing, and distribution. The company logged a fourfold increase in natural gas production in the fourth quarter.
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President and CEO Octávio Simões said, “Tellurian is executing on our plans to progress Driftwood LNG and has invested approximately $1.0 billion in the project since inception. We have also significantly increased our natural gas production and reduced carbon impact through nature-based solutions. At the same time, we are diligent in our search to secure a financing package to support long-term returns for shareholders.”
This week’s momentum continued after Tellurian’s latest milestone. The company entered a binding letter of intent for a $1 billion deal for the sale and leaseback of an 800-acre property to be used for its proposed Driftwood LNG facility. The company said it would sell its interests in the property for $1.0 billion and lease it back for 40 years. The Driftwood LNG LLC subsidiary also has to post a letter of credit equal to a year’s rent, among other requirements.
