4 Penny Stocks To Watch This Month
Believe it or not, penny stocks have become some of the more popular asset classes this quarter. The main reason I think is based on many people sitting home without much to do. Blame it on sports gamblers who don’t have sports to bet on or blame it on crypto traders finding a new home. Either way, the increase in trading liquidity has become evident.
Why say that? Typically, we see the whole “Sell In May and Go Away” trend in June where markets tend to quiet down. This year, not so much. It’s a very different trend than we’ve seen in previous years. But also keep in mind that it’s an election year with very unique circumstances. COVID-19, economic slow-downs, trade war tensions, maybe throw in murder bees for good measure; this isn’t your typical year.
I think that one of the best things we can point to when it comes to penny stocks is the overall trend. More specifically the way that cheap stocks don’t generally move in tandem with markets. While certain sectors may enjoy a sector push, like oil and gas, in general most penny stocks move on their own accord.
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Case in point, the entire market could be down on a given day and I’m sure you’re likely to find at least a few penny stocks moving over 50%. With this in mind, let’s take a look at some of these stocks under $2.50 to watch this month.
Penny Stocks To Watch, June 2020: Revive Therapeutics Inc.
If there’s one sector always on watch, it’s been biotech. COVID-19 essentially triggered a mad dash to biotech penny stocks targeting novel vaccine candidates. Revive Therapeutics Ltd. (RVVTF Stock Report) (RVV), for example, has taken the approach of essentially repurposing drugs already proven for other indications and applied it to coronavirus. The advantages here are a much lower time to focus on whether or not a drug works but rather, how it can be applied to address other viruses; like coronavirus.
In the past, Revive Therapeutics has explored the use of Bucillamine in the treatment of acute gout flares in a Phase 2 study in the U.S. This was under its Investigational New Drug (IND) application that was granted and accepted by the U.S. FDA. The company also explored the use of Bucillamine in the treatment of cystinuria, a cause of cystine stones in the kidneys.
It actually received FDA orphan drug status and its IND was also accepted by the FDA to conduct a Phase 2 study in the United States. With two big achievements under its belt related to Bucillamine, the company has gone another step further to look at the drug to treat influenza.
What To Watch With Revive Therapeutics
Considering similarities at a biological level between influenza infections it may not be unreasonable to think that this could possibly justify the investigation of Bucillamine as a key treatment and intervention for COVID-19. From a technical perspective, it’s interesting to also note some things. While RVVTF pulled back along with other coronavirus stocks recently, it has not broken below its 50-Day Moving Average in months.
What’s more is that the company is also working on other initiatives as well. Its work within the emerging psychedelics sector has become a focus for some. Revive announced an expansion to the sponsored research partnership agreement the University of Wisconsin-Madison.
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The company will evaluate new formulations of psilocybin. The Company also plans to finalize a sponsorship program around a Phase 1 clinical study examining psilocybin for the treatment of an undisclosed addiction use disorder. As more attention increases around this new niche, companies like Revive could be ones to watch.
Penny Stocks To Watch: ElectraMeccanica Vehicle Corp.
There’s no doubt about it, electric vehicles are trending this month. The IPO of Nikola Motors (NKLA Stock Report), the rise of Nio Inc. (NIO Stock Report), and the record set by Tesla (TSLA stock report) have broadened the awareness of this growing niche. For ElectraMeccanica Vehicle Corp. (SOLO Stock Report), this is possibly one of the “greener” names in the bunch. Not referring to emissions but rather the stage of business development, SOLO stock has climbed significantly in June.
Following a massive drop in March, shares began to recover at the end of May. This came after the company reported Q1 earnings. Sales were up from $101.404k CAD to $116.813k CAD. But the big focus was on expansion efforts. ElectraMeccanica has been looking for a new home for its U.S. assembly facility and technical center.
What To Watch With ElectraMeccanica
While the surge in momentum is great, it’s also important to understand that there was larger hype behind it. The company went so far as releasing an update refuting statements that, coincidentally, it was going to release a big announcement.
The rumor mill was definitely buzzing. In any case, once ElectraMeccanica put the rumors to rest, the focus was back on its growth narrative. Earlier this month, the company announced that it narrowed its list to for its new U.S. home to Arizona, Colorado, Florida, North Carolina, and Tennessee.
This week, the company came out with another update. ElectraMeccanica announced the accelerated expansion of its retail footprint for its flagship SOLO EV with new locations planned for Arizona and Oregon. Given this, it may be something to keep in mind if SOLO is on your list of penny stocks right now.
Penny Stocks To Watch: CPI Aerostructures Inc.
CPI Aerostructures Inc. (CVU Stock Report) is engaged in the manufacturing of structural aircraft parts for fixed wing aircraft and helicopters. Since late March, CVU stock has been steadily climbing on light volume. Considering that its share structure shows somewhere in the ballpark of around 12 million shares, we might be able to put this into the category of low float penny stocks. In such a situation, the lower the float, the quicker a penny stock can move (that goes for both directions). The one thing to consider is the volume in the market.
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Where most of the time, CVU traded less than 300,000 shares, Tuesday was quite different. The penny stock jumped to highs of $5.31 during premarket trading and saw volume breach 7 million before the lunch hour. This jump was triggered after a news catalyst came out. The company announced that it received $43.1 million in purchase orders. Northrop Grumman Corp. (NOC Stock Report) put in for the purchase orders for outer wing panel kits used for its E-2D Hawkeye, a communications aircraft.
What To Watch With CPI Aerostructures
With the addition of these new orders the total value of firm orders under the multi-year contract to CPI Aero is approximately $51 million as the total expected quantity of wing kits has increased. “Work under these new orders has already commenced with the vast majority of revenue expected to be recognized in 2020 and 2021 with deliveries scheduled through 2023,” CEO Douglas McCrosson said in the release.
Due to the smaller float of CVU stock, it’s important to take into consideration the overall volume levels. A surge can result in a dramatic directional shift depending on what side of the surge you’re looking at. Furthermore, after such a gap up, if CVU is on your list of penny stocks right now, you’ll also want to be aware of the potential risk of profit taking. As of Tuesday at the start of the lunch hour, CVU has maintained itself above $3.50 so far. Will the bullish trend continue through the rest of June?
Penny Stocks To Watch: ToughBuilt Industries Inc.
Finally, ToughBuilt Industries Inc. (TBLT Stock Report) has seen some stronger momentum this week. With retail sales surging, you might consider this among retail stocks to watch. Considering a $2 trillion plan for infrastructure, you might also consider ToughBuilt part of that niche as well. Either way, if you’re not familiar with the company, ToughBuilt designs, manufactures, and distributes home improvement and construction product lines.
While there hasn’t been much news recently, the moves made by the government could give reasons for investors to watch companies like ToughBuilt. After dropping earlier in the month following news of a multi-million dollar raise, TBLT stock seems to be getting some of its footing back. The big story with the company has been on its expansion.
What To Watch With ToughBuilt
TBLT stock has a storied past with us this year. It became one of the most volatile penny stocks to watch. Furthermore, it almost seemed like a story of 2 steps forward, 1 step back. The company gained ground earlier this year with products included on a major website it also entered into a distribution agreement with Distribution America, a hardware store retailers’ cooperative with 15,000 affiliated locations.
There were also several other distribution deals. One might think that such progress would warrant a more consistent uptrend. However, ToughBuilt has also been raising money along the way, which hasn’t helped with sentiment. Now that this last round of financing is out of the way and consumer discretionary stocks are a focus, could TBLT stock finally kick off a firm uptrend? With products in Tractor Supply, Amazon, and even Lowe’s, ToughBuilt may be one to watch heading into the summer months.
