Penny Stocks May See Influence From A Number Of Things. When It Comes To Earnings, This Can Work In Favor Or Against A Company On Your List Of Penny Stocks. Take A Look At 2 Getting Hit By Negative Sentiment
When it comes to investing in small-cap stocks, you need to know which penny stocks to buy, sure. But you also should know what companies to avoid. Not entering into a losing trade helps just as much as making a winning trade. It all comes down to preserving capital, managing loss, and capitalizing on opportunities.
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Sometimes the opportunities present themselves as “stop signs”. In these instances, you may have more success NOT trading as compared to entering a trade and losing money. So, it comes as no surprise that investors need to keep a close watch on the movements in the market.
Some penny stocks that might have produced gains may give them up if a company’s earnings prove to be largely underwhelming. If that happens, investors should figure out whether to buy the penny stock or avoid it. Here is a look at two such stocks.
Penny Stocks Falling After Earnings #1:
GoPro Inc (GPRO)
The first penny stock in this regard is action camera manufacturer GoPro Inc (GPRO Stock Report). Let’s get one thing straight. This is the same GoPro Inc. that IPO’d at $24. Now that we’ve got that out of the way, let’s get down to business. The company managed to swing into profits in its latest quarter, but it couldn’t beat analysts’ expectations.
Sure enough, GoPro stock price started falling and now has officially become a penny stock. The results were announced on August 2. In the latest quarter, the company managed to earn $4 million, which translates to $.03 a share.
In the prior-year period, it generated a $.15 loss per share. Additionally, GoPro raised its projections for the whole year. But analysts believe it may be far too early to invest in it since the company has not yet announced the launch of any new products. As a result, price targets were cut by firms like Wedbush who pulled down from $6 to $5.50. Though they did leave GoPro stock’s rating at neutral.
Penny Stocks Falling After Earnings #2:
Glu Mobile (GLUU)
One of the other penny stocks to watch that took hit recently was Glu Mobile Inc. (GLUU Stock Report). The company manufactures mobile games. This past week, Glu cut its projections for the full year and that triggered a selloff in the penny stock. Eventually, the GLUU stock dropped by as much as 36.5% as investors expressed their disappointment at the cut in projections.
That being said, it is important to point out that the company’s earnings in the second quarter was solid. Its revenues rose by 6% and in addition to that, the company reported $101.9 million worth of bookings.