Are These On Your List Of Penny Stocks to Buy Or Avoid After Reaching New Milestones?
There’s been plenty of penny stocks reaching 52-week highs that continue higher after. At the same time, there are also those stocks that have firmly reached their respective “tops”. A lot of the “potential” lies not only within the companies themselves but in those trading them. Do traders see future opportunities in the company or are they just in it for the trade? All of these factors are subjective to individual stocks.
Regardless, 52-week levels – highs and lows – can give investors that “hey look at me” moment. What I mean by this is that obviously something has happened with a company that would cause such a surge. Is the catalyst behind it something that fundamentally changes the makeup of certain companies?
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For instance, did a biotechnology company just successfully complete a phase trial and is now going into full-scale commercialization? Something like that would compel a whole new group of investors to take a look at such a company.
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Those hypothetical 52-week highs for the stock might just be the tip of the iceberg. Sure, early buyers might sell, but those who invest in commercial-stage biotechs generally “pick up the slack” as they typically have a longer time horizon than traders. We saw something like this happen with many coronavirus stocks this year; Novavax is one of the clearest examples of this phenomenon. On the other hand, we might just be talking about a low-float penny stock that hasn’t seen news in a while.
The first material development that pops up may initially spark a rally in certain penny stocks, which then might result in a short squeeze. Take, Kodak, for instance. The penny stock was beaten down for months and the first news included a proposed government loan. Even though the loan wasn’t finalized, just the thought of such a scenario caused a rush of buyers. But once those traders read the fine print, selling ensued and so did the overall downtrend.
This is why I say 52-week levels are attention grabbers. Once the attention is there, however, it’s time to research why and put a plan together on what happens next. In this case, here’s a list of penny stocks hitting fresh 52-week highs today. Are they on your list to buy or avoid at this point?
Penny Stocks To Buy [or avoid]: Comstock Mining
Comstock Mining (LODE Stock Report) is no stranger to a strong list of penny stocks. By far, however, LODE stock saw one of its biggest single-day moves on August 17th. The penny stock closed out the week last week at $0.79. Monday, LODE stock reached highs of $2.10 by the lunch hour. This huge move came after the company posted its quarterly results.
One of the key points from the second quarter were Comstock’s net income results. Net income was $1.3 million, or $0.05 per share for three-months ended June 30, 2020. This was night and day different compared to a prior period net loss of $2.1 million, or ($0.13) loss per share.
Net income was $1.0 million, or $0.04 per share for six-months ended June 30, 2020. The prior period showed a net loss of $3.9 million, or ($0.24) loss per share. Mr. Corrado DeGasperis, Executive Chairman and CEO stated, “We have grown and strengthened our balance sheet, extinguished our secured debt, and deployed and installed the first MCU – Comstock system as we prepare for material testing within the boundaries of the Carson River Mercury Superfund Site. We have also reserved shipping containers as we prepare to ship our first international unit to the Philippines.”
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The company is now working with Tonogold to consummate the acquisition of the entity that owns Lucerne. Comstock will also facilitate the commencement of a well-planned and permitted exploration drilling program. “We expect these transactions to be consummated and the exploration plans announced over the next few weeks.” Will LODE stock continue higher or is it due for a pullback after hitting new 52-week highs on Monday?
Penny Stocks To Buy [or avoid]: Fortress Biotech
Fortress Biotech (FBIO Stock Report) also followed in Comstock’s footsteps. While the move for FBIO stock wasn’t as abrupt, it did see shares continue a 5-month uptrend that started in March. In fact, for the period to date, FBIO stock has now climbed from lows of $1.09 to highs of $3.54 this week. That 224.8% move obviously didn’t come overnight but it was helped by several corporate catalysts along the way.
The company most recently posted quarterly results at the end of last week. Fortress saw product revenue from the first six months of 2020 jump by 50%, year-over-year to $21.4 million. One of the high points for the quarter was the company acquiring a broad platform technology from Columbia University. This platform technology is built to treat genetically driven cancers. The company said it’s also “exploring” the potential of the platform to treat things like COVID-19.
This week the company presents at the Corporate Access Summit Hosted by B. Riley FBR. Obviously, after such quarterly milestones amid a pandemic, Fortress continues to gain attention. Monday’s 52-week high of $3.54 is a level FBIO stock hasn’t traded at since June of 2018. The question now: Can FBIO continue higher?
Penny Stocks To Buy [or avoid]: Lifeway Foods Inc.
A relative newcomer to a list of penny stocks to watch this week is Lifeway Foods, Inc. (LWAY Stock Report). If you’ve never heard of this company before, it’s probably got something to do with LWAY stock’s daily volume. Until the second quarter of 2020, the penny stock rarely traded more than 30,000 shares a day. Some days it didn’t even trade 10,000 shares. This week, however, LWAY stock is on the radar after seeing its 3rd highest share volume day of 2020. It also saw its highest share price in at least 52 weeks.
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LWAY stock reached a high of $5.59 on Monday with more than 800,000 shares traded by the end of the lunch hour. Something else to note is that this is one of the low float penny stocks to watch hitting new 52-week highs. Just basing things on the 15.6 million shares outstanding, the float is likely lower. Some financial sites peg that around 3.5 million right now. Why did LWAY stock jump this week?
Similar to the other companies on this list, Lifeway reported second quarter results. Net sales came in at $25.0 million for the quarter. This equated to an increase of 8.0% from $23.2 million in the second quarter of 2019. What’s more is that Lifeway reported monster earnings per share growth.
In Q1 of this year, the company reported earnings of $0.01 per share. The same quarter from 2019 saw Lifeway report a $0.01 loss per share. But in Q2 2020, the company came in with earnings of $0.06 per share; a 500% jump quarter over quarter & a 700% increase from the same quarter last year.
