Penny Stocks Are Seeing A Renaissance & Retail Investors Are Profiting
If you haven’t noticed, penny stocks have been on fire and I think we’ve got retail investors to thank. In the wake of major industry shutdowns, 1 thing has become very evident. People bored at home are looking to learn new skills to make money outside of their former life and day job, “pre-covid”.
One of the increasingly popular “things to do” has been investing. The markets haven’t shut down and you might say that many stocks are trading at discounts. But while major hedge funds are dumping stock and going to cash, today’s retail investor is capitalizing on the “crumbs” that big investors have staunchly pushed to the side.
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The fact of the matter is penny stocks are producing some of the biggest gains in the stock market right now. And for day traders, fundamentals don’t matter as the short-term catalysts. When was the last time you heard of bankrupt company hemorrhaging cash jumping over 1,400%?
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Or maybe a company admittedly fraudulent, major exchanges set to delist it, but investors piled into the stock which saw a jump of more than 400%. Those are real-life examples of penny stocks we’ve actually covered due to the simple fact that momentum was driving the market and traders were interested in such penny stocks.
If one thing has helped, it’s been the Federal Reserve and the “brrrr” of its stimulus gun. Billionaire investor Stanley Druckenmiller said he’s been ‘humbled’ by markets after missing out on the historic stock rally. “I underestimated how many red lines and how far the Fed would go,” Druckenmiller said.
Whether you’re a traditionalist or a cowboy, there’s a clear opportunity right now to take advantage of the stock market’s momentum and it may not rely as heavily on long-term fundaments. With this in mind, here’ s list of penny stocks to watch as this asset class has presented some of the most volatile, high risk, and high reward opportunities in 2020. The main question, will these be penny stocks to buy right now?
Penny Stocks To Watch: Sequential Brands Group Inc.
As discussed on June 8th, the consumer cyclical/retail brands segment of the market hasn’t performed well in a post-COVID world. Sequential Brands Group Inc. (SQBG Stock Report) manages a portfolio of consumer brands in the active and lifestyle categories.
These include brands like Heelys, And1, Jessica Simpson, Joe’s, Spri, Gaiam, and even the Franklin Mint. In general, SQBG stock hasn’t been one of the top performers in 2020. During the first quarter, shares dropped from over $0.30 to under $0.15 seeing 52-week lows of $0.1028 in mid-March. However, since then, SQBG stock has seen an increase in trading volatility.
After recovering back to its 200-Day Moving Average (DMA) early last month, SQBG failed to break resistance and slid back to $0.1235. Over the last few days though, the penny stock saw both an increase in price and trading volume. On June 9, shares jumped to a high of $0.719 during premarket trading. There’s no news to note, and the last filing came on June 4th discussing executive compensation plans.
The specifics show executive compensation getting a 30% cut through the end of the year. Could this be a source of the recent surge in light of the economy reopening and companies looking to run lean through the end of the year to preserve capital? We’ll have to see as this story develops. Considering this move, if sustained, it would put SQBG stock above its 200DMA for the first time in over a year. Before this, the 50DMA was a level of support/resistance. So the 200DMA will be an important level to monitor in my opinion.
Penny Stocks To Watch: Ideanomics Inc.
Ideanomics Inc. (IDEX Stock Report) was one of the penny stocks to watch earlier this year. Shares surged from under $0.30 to over $1.35. But like SQBG, IDEX stock failed to break above its 200DMA. Furthermore, the 50DMA more frequently acted as a resistance level over the last year. In June, things have started to heat up a bit for the penny stock. This could warrant some attention in the stock market.
Ideanomics recently entered into a 50/50 joint venture with Business Big Data PTE, Ltd./Seasail Ventures. The venture will see the creation of an investment company focused on new infrastructure projects in China. The investment company will develop an AI-enhanced “China New Infrastructure” bond product, introduce capital, and fund advisory. According to the company, “this fund will capture two significant emerging trends: the application of AI in traditional financial services and China’s next economic upturn.”
This week, Ideanomics announced that auto dealers operating in its subsidiary, Mobile Energy Global’s expo center have sold 2,139 vehicles for a total value of $33 Million. Based on the level of sales activity in the first week of June, this month’s sales are expected to exceed May levels according to the company.
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“The initial activity combined with the projected growth for the remainder of 2020 reinforces our belief that the MEG Center will be a material source of revenue for Ideanomics,” said Chairman Dr. Bruno Wu. During premarket trading on June 9 IDEX stock jumped to highs of $1.20. In a similar situation to SQBG, sustaining this level would firmly put it above its 200DMA for the first time in almost a year.
Penny Stocks To Watch: Immuron Limited
Finally, shares of Immuron Limited (IMRN Stock Report) saw an explosive move on June 9th. If there’s been one sector that’s been hot this year it’s been biotech. Immuron is a clinical-stage biopharmaceutical company focused on the development and commercialization of “immunomodulator polyclonal antibodies”.
Essentially, it’s used to treat liver diseases, infectious diseases, and other immune-mediated diseases. The company’s lead product candidate, IMM-124E, is a proprietary immunomodulator agent targeted at gastrointestinal immune-mediated diseases including fatty liver diseases.
You might think COVID-19 would have something to do with all biotechs. But in many cases lately, it hasn’t been a factor. This week, IMRN stock is breaking out after a big update from the company. The update was on the company’s research collaboration with the Naval Medical Research Center to develop to clinically evaluate a new therapeutic. This therapeutic aims to fight against campylobacter and ETEC (E-Coli). The NMRC recently requested a Pre-IND meeting with the U.S. FDA regarding its new investigational drug. The company is developing it to treat moderate to severe campylobacteriosis and ETEC infections.
“We received a formal start work notification and approval at the end of January 2020 from the Henry Jackson Foundation for the Advancement of Military Medicine to commence work on the sub award,” said Dr. Jerry Kanellos, CEO of Immuron Ltd. Will this see IMRN stock continue to push higher? On the other hand, will this run end the same way we saw ENOB fall yesterday? With a current O/S of less than 5 million, this could be one of the low float penny stocks to watch this week.
