Penny Stocks Are Very Active This Week & These Companies May Be Worth A Closer Look
Over the course of time, penny stocks have generated a lot of wealth for thousands of investors. Even now, traders especially are always on the lookout for the next big thing in penny stocks. As long as you’ve got a real broker (Etrade, TDAmeritrade, Robinhood, etc.), they will offer access to penny stocks to buy or sell. Knowing how to trade penny stocks is another story.
That being said, investing in penny stocks comes with its share of unique risks. Perhaps the most important thing to remember is that the liquidity in penny stocks is remarkably low and even a small selloff can lead to large declines in the stock price. So, it’s important to watch the market closely and then make decisions. Though you shouldn’t base decisions solely on this, penny stock message boards and social media are interesting places to go.
This isn’t necessarily to determine how to trade but to observe sentiment and hype. Some penny stocks get hyped up more than the companies they come from. In this case, there could be external risks not associated with the market but more of a herd mentality. After you understand the risk, you’ll be in a better position to manage that risk.
With all of this in mind, here is a look at three penny stocks which have made big moves and in turn, big money for those early traders, recently. Will they continue higher before Friday or is it time to sell?
Penny Stocks To Watch #1 Lexicon Pharmaceuticals, Inc. (LXRX)
This has been one of the more popular penny stocks to watch this month. Lexicon Pharmaceuticals, Inc. (LXRX Stock Report) was introduced last week after it cut ties in a deal with Sanofi. The initial deal was a 4-year partnership to develop and commercialize sotagliflozin. As part of the settlement deal with Sanofi, Lexicon would receive a $208 million upfront payment with a remaining $52million paid out over 12 months.
The company is slated to make several presentations. These will be for both its oral and poster presentations on the Type 1 diabetese product, sotagliflozin. The presentations will take place at the European Association for the Study of Diabetese annual meeting. Obviously, the reaction from these presentations will be something to pay close attention to as LXRX stock continued to climb this week.
Penny Stocks To Watch #2 DURECT Corporation (DRRX)
Possibly one of the best performing penny stocks to watch this quarter, DURECT Corp (DRRX Stock Report) tagged new 52-week highs this week. This comes as the company announced positive Phase 2a results from a recent clinical trial. This Phase 2a trial was for DUR-928 in Alcoholic Hepatitis. “We are excited that the first trial of DUR-928 in AH patients demonstrated superior outcomes compared to historical control data” – James E. Brown, President and CEO of DURECT.
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Keep in mind that this isn’t a standalone event as DRRX stock has climbed steadily since July. DURECT has also networked for doing deals with big names like Gilead. In July, the company and Gilead entered into a deal that would allow Gilead exclusivity on a global scale to develop an HIV product. DURECT’s SABER technology earned the company an upfront payment of $25 million.
After reaching a milestone, Gilead has paid another $10 million. In total, this could see another $65 million in milestones and up to $70 million in sales-based milestones. There are also tiered royalties on product sales. Since July 18, shares of DRRX stock have climbed by as much as 186% and 316% since January 2.
Penny Stocks To Watch #3 Yuma Energy (YUMA)
Another one of the penny stocks we’ve discussed performing well right now includes Yuma Energy Inc (YUMA Stock Report). This move came over the past week or so. Prior to that YUMA stock also saw a breaking move in mid-August.
The stock has jumped by more than 200% over the past week after the oil and natural gas exploration outfit completed a comprehensive debt restructuring process. It sold its secured debt to a hedge fund and that sent the stock flying.
However, on Monday, the company’s shares flew again as global oil prices rose following the weekend attack on the Saudi Arabian oil production facility. As the global price of oil rose by 12%, the Yuma stock skyrocketed on Monday. Despite pulling back on Monday afternoon, YUMA stock appears to have resumed its uptrend on Tuesday.