These 5 Penny Stocks Are Up Big But Are They Still A Buy?
Most of the big markets like the S&P 500, Dow, and Nasdaq were down on November 21st. But this doesn’t mean you can’t make money in the stock market. When things get volatile, people start to look at some of the smaller cap stocks in the market like penny stocks. These cheap stocks have a tendency to do very well no matter how the market is doing. But it’s important to understand that there’s much more risk involved when you buy penny stocks and trade them.
Due to their extreme volatility, these investments can bring huge amounts of profits in short periods of time. Of course, like any investment, making profits is dependent on doing proper research. The hardest part of researching penny stocks is that a lot of them don’t have proper financial records.
It’s fascinating to learn how different types of stocks are traded. For instance, blue-chip stocks are more of a hold and “wait for” type of equity. In comparison, penny stocks are usually held very briefly but still return a big profit. Not all investors have the stomach to handle this insane level of volatility. However, I am here to tell you that it is possible to learn and adapt to trade penny stocks effectively.
Buying & Trading Penny Stocks
Just getting your feet wet? It’s important to practice your strategy. How can you do this without losing your hard-earned money? You can use paper trading software to develop your trading strategies and understand market trends to trade more effectively. Also, learning how to trade with stop-losses can be your best friend when attempting to improve your skills.
Many will say that “the trend is your friend” but I can safely say that’s true until it isn’t. When it comes to these low priced stocks, sticking to a trend is only as good as the company behind it. For example, if one of these companies announces a one-off update it can become a catalyst for a quick move but have no sustainability.
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Whereas, a company that has consistently outperformed, raised quality funds, and focused on growing the business can see a more lasting impression. Given this, here are a few penny stocks to watch that have seen big moves recently; some all year long.
Penny Stocks To Buy [or Sell] Now: Q BioMed Inc. (QBIO)
First on this list of penny stocks is from the healthcare sector. Q BioMed Inc. (QBIO Stock Report) is a biomedical technologies company addressing unmet medical needs in oncology, vascular disease, and rare orphan diseases. The company currently has 3 treatments undergoing clinical trials and one treatment headed to markets called Metastron.
Although this penny stock isn’t making any noise on November 21st, we cannot simply ignore its strong move on the 20th. QBIO stock skyrocketed from $0.365 to $1.62 accounting for a 343.84% move. In addition, the healthcare penny stock traded over 30 times its average share volume. All of this momentum came after Q BioMed announced receipt of FDA approval to start manufacturing its non-opioid cancer bone pain drug called Strontium-89 Chloride USP.
The CEO of Q BioMed, Denis Corin, feels like, “This is the start of a new chapter in the evolution of our company, and we are looking forward to serving the needs of thousands of patients suffering from metastatic bone pain, providing them the chance to minimize their pain and positively impact life with metastatic disease. With millions of potential patients around the world, this is a major market opportunity for our company.”
Penny Stocks To Buy [or Sell] Now: Stage Stores Inc. (SSI)
The next company is in the consumer cyclical sector. Stage Stores Inc. (SSI Stock Report) is a retail company that sells reasonably priced apparel, accessories, cosmetics, footwear, and home goods. We’ve talked about this penny stock since September and watched the market rally ever since. At the moment, the company has 617 different specialty stores and 158 off-price stores. In addition, to keep up with e-commerce the company also sells its products on its website.
The company recently reported its Q3 financials and it has prompted a very strong move in SSI stock price. On November 21st thus far, Stage Store’s price is up 22.4% going from $2.25 to $2.73. The financials showed that the company’s comparable sales increased by 17.4% with a decreased net loss of $15.5 million year-over-year. In addition to these figures, the business has increased its store traffic by implementing Amazon Counter to 700 of its stores.
“The 17.4% increase in third quarter comparable sales was driven by a variety of factors that encompass our guests’ positive reaction to the new Gordmans stores and our pre-conversion activities. The 89 department stores converted to off-price during 2019 delivered a combined sales increase of nearly 40% in the third quarter,” expressed Michael Glazer, CEO of Stage Stores in a press release. Not only have shares jumped big this quarter, but SSI stock is also up by more than 390% since the beginning of the year when it opened 2019 at $0.78 on Jan 2. Furthermore, if you saw this at 52-week lows, SSI has jumped as much as 600% after $3.85 highs in November.
Penny Stocks To Buy [or Sell] Now: Oncolytics Biotech Inc. (ONCY)
Oncolytics Biotech Inc. (ONCY Stock Report) was another biotech name catching attention this quarter. Oncolytics Biotech creates and sells treatments for several types of cancers. The company’s primary focus is receiving approval for its treatment pelareorep for metastatic breast cancer. In addition, Oncolytics is working on its studies for Bavencio, Kettruda, Opdivo, and Tecentriq.
This biotech penny stock has had a strong 4th quarter so far. Oncolytics’ price is up by 88% since the start of October. However, on November 12th the company reported its Q3 financial and operational highlights. This report showed that Oncolytics has done some strong work regarding its AWARE-1 study. The company is anticipating its BRACELET-1 study to begin in Q1 of 2020.
Penny Stocks To Buy [or Sell] Now: Wah Fu Education Group Limited (WAFU)
Adding a little diversity to this list, a company from China, Wah Fu Education Group Limited (WAFU Stock Report). Wah Fu Education Group is different in that it is a technology company that provides online training and exam preparation services. Furthermore, the company offers technology solutions for institutions like schools.
Wah Fu’s stock price is flying off the wall so far on November 21st. Typically this penny stock has traded under 10 thousand shares however on this trading session it traded over 5 million shares and skyrocketed as much as 339% during the day. Most, if not all, of these gains, came after the company announced entry into a one-year partnership agreement with Chengdu Neusoft University. Per the agreement, Wah Fu will create a customized online education platform for the college.
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The Chairman of Wah Fu, Yang Yu, weighed in on this partnership stating, “We are thrilled to partner with Neusoft University where its over 10,000 students, teachers and staff are set to benefit tremendously from our proprietary online training and educational solutions and services and look forward to building a successful partnership with Neusoft University.”
Penny Stocks To Buy [or Sell] Now: Federal National Mortgage Association (FNMA)
The final company on this list is a company most investors know about from the ’08 housing crisis. The Federal National Mortgage Association (FNMA Stock Report) also known as Fannie Mae, finances mortgage lenders. The company’s 2 primary lines of business include helping lenders originate mortgages and financing multifamily rental properties.
The company’s price action this week has been interesting, so we dove into some recent news. Towards the end of the trading session on November 19th, news came out that the FHFA plans to re-propose the entire regulation on capital requirements for Fannie Mae. The stock immediately experienced a massive selloff before 4 pm. Since this point, the stock pushed back upwards to the price level before that news dropped and is currently trading around $3. However, for the year, FNMA stock is flying. Since starting the year at $1.08, shares have jumped as high as $4.23 and currently sit just over $3.05; 291% and 182% respectively
What’s important to note is that FNMA and FMCC for that matter have been under the microscope. Volatility is an understatement at this time. Much of the future for these organizations rests in the hands of the government or absence thereof. The goal for the firms has focused on giving control back to private hands while the government would only have an arm’s length oversight. Should this formally happen, it would put the firms back to the same basic status they were at prior to the financial crisis. If it goes through, will it be different this time around?