Are Penny Stocks Worth It?
Penny stocks, blue-chips, and everything in between are all in the spotlight right now. it doesn’t matter if it’s a multi-billion dollar biotech or a small-cap tech start-up, the name of the game is volatility. The stock market today is fueled more by speculative momentum than fundamental investment. This has been due, in part to the uncertainty of what’s to come for investors, the economy, and everyday life as we know it.
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The U.S. marked down more than 45,000 cases of coronavirus at the end of the week last week. That’s according to data from Johns Hopkins University. It far exceeds the previous day’s record of 39,972 cases on Thursday. Where the last few weeks of bullish trader were thanks to upbeat expectations for the economy, these numbers have definitely put a spotlight on serious headwinds that the market could face.
“As good as the recent economic data has been, we want to make it clear, it could still take years for the economy to fully come back,” wrote Ryan Detrick, senior market strategist at LPL Financial. Given this as the case, some have said that current conditions aren’t built for investors. Rather the day-to-day swings could be ideal for day traders as a whole. Is this necessarily a bad thing? Not really as long as you know the type of market conditions you’re dealing with.
“Markets have a casino characteristic that has a lot of appeal,” says Warren Buffett, “People like action and they like to gamble…If they think there’s easy money to be made, you get a rush,” he added. “And for a while, it will be self-fulfilling and create new converts until the day of reckoning comes.”
Can You Make Money With Penny Stocks?
That last statement is an interesting one when you consider penny stocks. While there are plenty of euphoric buying scenarios, the real potential lies in the short term swings. Unless you’re brand new to trading penny stocks, most know that these low priced equities don’t go up forever.
Therefore, it’s important to take profit along the way. Will there be bagholders who dismiss all logic and trading rationale? Of course, but that not you, right? In any case, let’s take a look at a few penny stocks for the coming week.
Penny Stocks To Watch: Biocryst Pharmaceuticals
Shares of Biocryst Pharmaceuticals (BCRX Stock Report) haven’t been a stranger to our list of penny stocks to watch this year. In fact, Biocryst stock has been on our list consistently since mid-November of 2019. At the time BCRX stock was going through a bout of selling and shares fought for support around $1.40.
However, since then the penny stock has managed to experience several big moves, periodically along the way. In March it jumped to highs of $4.35. After dropping to lows of $1.58 a few weeks later, BCRX stock has been back in rally mode for the most part. What’s more is that after pulling back from its May 12th high of $6.29, BCRX has treaded water around its 50-Day Moving Average (50DMA).
This past week saw share bounce off of that level with Biocryst jumping more than 12% on Friday. June has seen several analysts pick up coverage on the company. BTIG analyst Dae Gon Ha initiated coverage on BioCryst with a Neutral rating. Furthermore, JMP Securities recently lifted its price target from $10 to $11. It maintains an “Outperform” rating on the penny stock. Right now, BCRX stock is getting attention from a surge in COVID-19 cases.
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Its experimental drug, galidesivir is being tested for potential indications to suppress the effects of coronavirus. A Phase 1 trial to assess the safety, clinical impact, and antiviral effects of galidesivir in patients with COVID-19 is currently enrolling patients across multiple sites in Brazil.
Penny Stocks to Watch: Kitov Pharmaceuticals Holdings.
If you’re an avid reader of PennyStocks.com articles, I probably don’t need to go into too much backstory about Kitov Pharmaceuticals Holdings (KTOV Stock Report). Then again, if you’re reading for the first time, let’s get you up to speed.
KTOV stock has been explosive this quarter. When we first started following it this year, shares were trading around $0.45. The focus for Kitov has been on its progress with pain management and immune diseases. The company itself has been focusing on its cancer therapy, NT219 as a therapy for multiple treatment-resistant cancers.
Something to note about KTOV stock is that it has gained a cult-like following. Larger amounts of social media chatter have centered the conversation around Kitov. Whether it’s been rumors or actual headlines, the general spark has been lit and KTOV stock managed to jump over 210% since we started diving into the details about this company.
Most recently, traders saw a situation of “nothing goes up forever”. The company announced a discounted share offering that sent share plummeting lower. However, at the end of the week last week, KTOV stock managed to mount a recover. This came as the company reported that the financing had officially been closed. Considering the bullish momentum from June 26th after the close, will that continue into Monday’s open?
Penny Stocks To Watch: CleanSpark Inc.
CleanSpark Inc. (CLSK Stock Report) hasn’t been immune to selling pressure this year. But recently it hasn’t faced much of it as CLSK stock jumped back above $2.50 on Friday for the first time since May 21. What’s more is that Friday, the penny stock saw its highest share volume day of June.
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On Friday we talked about a new “class” of stock. In light of the coronavirus pandemic and its impact on the stock market, analysts like Tom Lee have coined a new phrase. This phrase is “epicenter stocks” and this week it seemed fitting to track a few epicenter penny stocks. CLSK was one on the list.
The company is a software and services company. Specifically, it offers software and intelligent controls for microgrid and distributed energy resource management systems. So, part tech, part energy, CLSK stock could hit on a few of the “epicenter stock” topics in the market.
What are epicenter stocks? According to Tom Lee, epicenter stocks are in consumer discretionary, industrials, technology, health care and energy sectors that have been most beaten down. This week, CleanSpark announced the successful commissioning and deployment of its mPulse software on a comprehensive off-grid installation system. Considering shares traded higher during after-market hours Friday, will this momentum carry through on Monday morning? Since March 27th, CLSK stock is up more than 100%, to date.
