Can you make money in penny stocks? This is a great question to ask if you’re just getting started and looking for cheap stocks to buy. One of the most important things to keep in mind when investing in the stock market is that momentum plays a big factor.
This holds true for penny stocks as well. As everyone knows, an investor needs to keep a close eye on the market and do research if making money is the goal, which I’m assuming it is. I don’t personally know anyone who buys and sells stocks to not make money.
So, if you watch the market closely it becomes easier to identify those top penny stocks which are gaining momentum. There are other factors to consider as well. A lot of them have to do with what companies are doing as well. Are they about to release earnings or possibly a new trial presentation?
Momentum can build leading up to the report date and then continue higher or break down completely. It’s this ‘build-up’ that typically attracts momentum-based investors. The idea of “buy the rumor, sell the news” is very real. So it’s important to keep that in mind. On that note, here is a quick look at a short list of penny stocks that have been gaining momentum this month.
Penny Stocks To Watch #1: Aleafia Health (ALEF) (ALEAF)
The first of the penny stocks to watch is Canadian cannabis producer Aleafia Health (ALEF) (ALEAF Stock Report). The company is one of the headliners of the cannabis industry. On Monday, it made a significant announcement. Aleafia Health revealed that its outdoor cultivation activities produced 10,300 kilos of cannabis. The outdoor cultivation activities are spread across a total area of 26 acres.
The pot penny stock also revealed that the cannabis that it had planted in its Zone 1 section back in June managed to produce as much as 1000 kilos per acre. It goes without saying that this is an important development and naturally the stock climbed as well.
In addition, the company reported this morning that it had its first profitable third quarter. Cost per gram came in under $0.10, medical cannabis sales were up 43% quarter over quarter, and net income came in at $1.9 million. That figure is important because this is up significantly from an 11.5 million quarter over quarter loss. On Monday, the Aleafia stock gained 13%.
“Aleafia Health has now reached the next phase in our development as we report our first profitable quarter. It saw us realize substantial improvements in all critical financial metrics, as we scale our cannabis health and wellness ecosystem in Canada and globally,” said Aleafia Health CEO Geoffrey Benic.
Penny Stocks To Watch #2: Entercom Communications (ETM)
Another penny stock that has shown highly impressive momentum in November was Entercom Communications Corp. (ETM Stock Report). The penny stock has gained as much as 43% in November so far and it made significant gains last Friday as well. On top of that, since hitting 52-week lows in August ($2.94) ETM stock has rallied by as much as 71% so far.
The company managed to beat expectations in its third-quarter but the shares did not move much. But during an interview on Friday, it’s Chief Executive Officer David Field stated that the Entercom stock is undervalued by experts.
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It is currently trading at just over $4.80 but analysts believe that it could hit $8 in 12 months. After the assertion made by the CEO of the radio station operator, the stock moved to highs of $5.03 over the last 2 days. Can this momentum continue throughout the rest of the week and make ETM a penny stock to buy?
Penny Stocks To Watch #3: DURECT Corporation (DRRX)
Another company that has been on a great run since July is that of DURECT Corporation (DRRX Stock Report). Back in July, the company had announced that it had entered into a licensing agreement with Gilead Sciences for its SABER Technology. Since then the stock soared by as much as 215%.
DURECT Corporation has been on several penny stocks watch lists on our site over the last few quarters (click here for our first article). Back in October, the company had announced that its alcoholic hepatitis Phase 2 study for the product DUR-928 also proved showed positive results.
This month, the company gives presentations at The Liver Meeting. It will go over results from its completed Phase 2a study for DUR-928. “These compelling data provide a strong rationale for continued development, and we plan to initiate a Phase 2b study for this difficult-to-treat and life-threatening condition next year,” said James E. Brown, President and Chief Executive Officer of DURECT in a press release.