With another choppy market session in the books, investors remain focused on small-cap stocks. Also known as penny stocks, these low-priced equities tend to perform well during times of both market uncertainty and stagnation. This time around we might be seeing both. During the last 6 sessions, the broader markets have remained relatively sideways in trend. In addition, global and geopolitical uncertainties remain in focus.
Moving away from coronavirus threats for a moment, we’ve just begun to see what a post-Brexit world looks like. Growing concern over more tariffs and speculation of middle-eastern conflict remains a sticking point for investors. So, it isn’t out of the question as to why we’re seeing more people looking for penny stocks to buy. Think of it this way, to make 100% on your money in a blue-chip stock like Facebook or Apple, you would need to see your shares jump by $200 or more.
But when it comes to penny stocks, a few pennies can mean 20% or even 100% or more. This is where the excitement comes in with penny stocks. A $200 position in Facebook would get you about 1 share whereas the same capital in a $0.50 stock would get you 100 shares along with the leverage that goes into it. Essentially every $0.50 increase in price means another $50 in appreciation. That same move on Facebook would be unnoticeable.
Penny Stocks & Managing Risk
But you also need to keep in mind that penny stocks also carry much greater risks involved. Understanding how to manage that risk is crucial. As any smart investor understands, protecting capital is just as important as making money with penny stocks. Setting smart stop-loss orders and being aware of corporate & industry events can help determine when to buy or sell, too.
The point is that penny stocks are just like any other investment class. You need to treat them as such. That means these are not lottery tickets that you purchase blindly. Research can actually help you take that hard-earned money and risk it on something with a real chance of “winning.”
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Not only that but a sound strategy can be repeated over and over again too. Just keep this in mind when searching for penny stocks to buy. In any case, momentum is one technical aspect traders look for. This list of penny stocks has 5 names that have sparked up more attention in the market as momentum has built up.
Top Penny Stocks: BIO-key International
Last week we first brought BIO-key International (BKYI – Free Report) to PennyStocks.com after momentum built that stemmed from coronavirus concerns. At the time BKYI stock traded around $0.70. Since then, we’ve seen it explode to highs of $1.07 this week, so far.
The interesting (or not) part of this is that there haven’t been any news updates or corporate filings to speak of this year. The last updates came in December after the company reported that Florida’s Orange County Supervisor of Elections chose the company to protect access to public records.
“We have come to understand the unique use case for Supervisors of Elections and have tailored solutions to meet their needs. Our software is sold on a monthly subscription basis and therefore provides needed flexibility to adapt to a changing workforce. We have also developed high-quality, affordably-priced fingerprint scanners to meet budgetary requirements,” stated Mike DePasquale, Chairman, and CEO, BIO-key. Besides this, the New Jersey-based company has been silent.
Could this be speculation on the upcoming elections or possibly something completely unrelated? As we pointed out, the company has been featured in a report as a company “poised to win in 2020.” It was titled, “Global Biometrics Technology Market Trends, Applications, Analysis, Growth, And Forecast: 2018 To 2027.”
Top Penny Stocks: AIM ImmunoTech Inc.
Another one of the penny stocks to watch has been AIM ImmunoTech (AIM – Free Report). This has been one of the coronavirus penny stocks to watch this year. But, similar to BIO-key, AIM hasn’t reported any updates this year either. The last announcement was regarding the company’s presentation at the Investor Summit on December 17th of last year. Beyond that, the newswire has been silent.
One thing that’s important to note is that the company has seen a long list of insider activity. Furthermore, at the end of January, a 13G was filed and showed a large fund had taken a larger stake in the company.
In the January 31st filing, Hudson Bay Capital Management reported a 9.99% stake in AIM ImmunoTech. Aside from this, at the beginning of January, there were a series of FORM 4s filed showing officers of the company picking up shares at an average of $0.53.
Top Penny Stocks: Trillium Therapeutics
Trillium Therapeutics (TRIL – Free Report) is on the list of penny stocks to watch once again. We have discussed this company since December 16. At the time it was trading around $0.56 and since then it has gone on a monster rally. This year, TRIL stock managed to reach highs of $4.86 and currently sits around $4.25 at the start of the week.
The company recently closed a $117 million offering to raise money for its clinical and research pipeline. “Trillium’s mission is to redefine the oncology treatment paradigm by developing and delivering to patients next-generation immunotherapies. We believe we have two potentially best-in-class CD47 molecules, a clear strategy targeting hematologic malignancies with great unmet medical needs, and now also funding from the top healthcare investors in this country to pursue that mission,” said Dr. Jan Skvarka, Trillium’s President and Chief Executive Officer in a press release.
Furthermore, the company has attracted attention from larger institutions. Both Vivo Capital and Boxer Capital filed 13G’s on February 3. Will this continue to help push momentum for TRIL shares throughout February?
Top Penny Stocks: Stage Stores Inc.
Stage Stores Inc. (SSI – Free Report) hasn’t had the best so far. After going on an epic run during the last few months of 2019, the stock plummeted to lows of $0.86. This may not seem like a big deal but since this came after trading at highs of $9.50, it was a large blow. So, why would SSI stock be on a list of penny stocks to watch? The first actual turn-around day may have happened at the beginning of the new month.
The penny stock managed to run from lows of $1.08 on January 31 to a high of $1.38 on February 3. What may have helped was the institutional and insider buying that has gone on. In several February 3rd filings it was revealed that officers and insiders increased their positions. This included a 2.15% stake coming from Paradigm Capital Management. Needless to say, it will be interesting to see what else may unfold from these developments beyond some insider action.
Top Penny Stocks: China Pharma Holdings
This was one of the penny stocks to watch, called out in our article over the weekend, “Looking For Penny Stocks To Buy? These Just Made New Highs.” China Pharma Holdings (CPHI – Free Report) is finding itself in the mix of coronavirus stocks to watch. I say this because there haven’t been any updates or filings released by the company in quite some time. As far as momentum is concerned, the fuel has been based on the company’s drug portfolio.
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The company has a portfolio of anti-viral and respiratory drugs on its website. Furthermore, it’s important to understand the key drivers. Right now it would appear that hype behind this epidemic may be the singular catalyst. This week kicked off with a massive rally to highs of $0.96. Considering that shares traded around $0.24 at the start of the month, this could be the biggest move the stock has seen in quite some time.
The next question is can this sustain itself? The last time there was such a parabolic move in the stock (October 2018), shares came crashing down during the days to follow. It will be interesting to see what transpires over the next week or so.