4 Penny Stocks To Take A Closer Look
High risk and high reward are synonymous with penny stocks. Where else can you find something trading for pennies on the dollar, invest in it, and see a return of 100% or more within hours? Aside from that, penny stocks can also give you direct exposure to the “start-up” world.
There’s a trend right now with sites offering “seed rounds” in start-up stage companies. But one of the biggest downsides is that there’s no immediate liquidity event. This means you can buy your shares but there isn’t an active market to sell those shares.
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In comparison, penny stocks are typically associated with companies in the early stages of development. While most will trade penny stocks more frequently than they will be investing in penny stocks, the long-term potential can be great for the companies that fully execute on a successful business model. In fact, we’ve written a few articles on companies that hit it big after trading as a penny stock at first. One of those articles was “Looking For Penny Stocks To Buy? These 3 Crushed It In 2019“.
In that article, you’ll see companies that ran from below $5 to above $100 in some cases. Does this happen all of the time? Obviously it’s a unique event to see penny stocks run past $100 a share. But it isn’t uncommon to see penny stocks breakout 100% or more within a few days or even hours.
The important thing to remember is to do your research and understand why you’re buying the penny stocks you have on your list. With the way the market has been trading, this volatility is creating big moves for many stocks. With this in mind, here’s a list of penny stocks making moves this week.
Penny Stocks To Buy [or sell]: Aurora Cannabis
The cannabis sector has been heating up this week. Record earnings and market speculation have helped drive an industry move. Headlines on places like CNBC are talking about how the “stay at home” orders are creating bulk demand for recreational and medical cannabis right now. This makes sense. Accordingly, we’re starting to see a few pot stocks pick up steam.
Aurora Cannabis (ACB) has been on the move this week. It started off Monday’s session around $0.80, dropped to lows of $0.67, and has been steadily on the rise ever since. On Thursday, ACB stock jumped above $0.85 during the morning session. No company news has come along with this move. But as we know, sector momentum can tend to drive most marijuana penny stocks.
That goes for both good and bad news. So as some would think that only biotech stock may have benefited from the coronavirus, pot stocks are joining the party. The biggest thing to focus on is whether or not the market can sustain this type of move after concerns around COVID-19 subside & life gets back to normal.
Penny Stocks To Buy [or sell]: MFA Financial
Yesterday I wrote about a broken down Real Estate Investment Trust, MFA Financial (MFA). It had dropped to under $1 per share from over $8 earlier this year. One of the things that I explained was the fact that while this drop was bad, it might not be bad for those looking at the stock this week. Not only have REITs started taking off today, but MFA is now up more than 160% since the article was published. What’s more, is that the company just came out with news.
Late yesterday evening, MFA reported an update on its dividends. The company said it will revoke the previously announced Q1, quarterly cash dividend on the company’s stock. Accordingly, MFA said that “The Company will continue to monitor market conditions and the potential impact the ongoing volatility and uncertainty may have on its business. Related thereto, the Company’s Board of Directors will continue to evaluate the payment of dividends as market conditions evolve.”
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No matter the case, this was a clear example of what I was saying above with penny stocks. They can produce 100%+ rallies within a matter of days. With MFA it will be interesting to see if this pace can uphold for the remainder of the week.
Penny Stocks To Buy [or sell]: IMAC Holdings
IMAC Holdings (IMAC) was a monster earlier this week. Shares rallied to highs of $4.95 from a $2 opening price. While this intra-day move of 147.5% was impressive, anyone holding overnight was a big crushed if they bought shares above $2.40. However, on Wednesday, the market began to pick up steam again. On March 26, this momentum continued after the company reported its earnings just before 10AM EST.
IMAC recorded a 126% increase in net revenues with $15.1 million compared to 2018’s $6.7 million. However, net losses increased to $6.5 million compared to $3 million in the previous year. But, given the volatility of this stock so far, it will be interesting to see if IMAC stock can maintain an uptrend or if this will be a “sell the news” day. In any case, the company is optimistic about the direction it’s heading in.
“We are heartened by the commitment our patients have demonstrated, which led to our strong annual increases in patient traffic at our clinics. Visits to our clinics in 2019 increased 117% to 138,639 visits vs. 63,812 in 2018. We improved EBITDA margin from -34% to -25% year over year, with the fourth quarter EBITDA at -18%. We will continue to focus on this financial metric by executing cost synergies from acquired entities while expanding our reach to patients seeking alternatives to invasive medical procedures.”Jeff Ervin , IMAC CEO
Penny Stocks to Buy [or sell]: T2 Biosystems
Another one of the penny stocks discussed earlier this week was T2 Biosystems (TTOO). The company reported several pieces of news that could be of interest this week. T2 reported preliminary Q1 2020 results. While it suspended its full-year 2020 guidance, the company did update on new developments with its coronavirus test.
Hackensack Meridian Health, New Jersey’s largest and most comprehensive health network, announced that a rapid test for COVID-19 created by its labs at the Center for Discovery and Innovation has been licensed to T2 Biosystems. The company will adapt the coronavirus test to run on its T2Dx® Instrument.
After gapping down on Thursday morning, shares appeared to recover a bit. During the premarket session, TTOO stock reached lows of $0.5001. But after the opening bell, TTOO managed to reach $0.71 highs. The biggest thing to watch right now with TTOO is to see if it can push back toward its 50-day moving average around $0.78. It acted as a level of potential resistance after TTOO reached its high of the day on Wednesday.