4 Cheap Stocks Rallying On COVID-19 News
When it comes to penny stocks to buy, watching for certain cues in the market can help. Over the last few weeks, the Dow and S&P have seen some of their most volatile sessions. But something tells me that this choppy trading is far from over. People are talking about flattening the curve and finding a vaccine for the virus. But the fact remains, top physicians are saying that we’re still far from “out of the woods” right now. Regardless, it hasn’t meant the opportunity for making money in the stock market has worsened.
While it is a fact that broader markets have had their share of troubles, penny stocks are actually becoming a focus. The main reason right now is the coronavirus itself. Hundreds of start-ups that have worked in biotech, healthcare, and even technology are finding their time to shine. Many of these companies will eventually need more funding to push forward. But the FDA and other organizations have made it easier for these smaller organizations to access proper channels to help speed up and otherwise lengthy and costly process.
Since mid-January, the term “coronavirus penny stocks” has been buzzing. At first, it was “penny stocks related to the Wuhan Flu.” But as more information came out, we were able to identify a specific virus in question. Fast-forward a few months and now we’ve seen the entire economy shut down, people “safer at home,” and a bigger focus being put on “flattening the curve”.
Given the obvious sentiment around the coronavirus, it doesn’t hurt to have a few penny stocks on your watch list. And while these are cheap stocks, it will be up to you to decide if they’re going to be the best penny stocks to trade right now.
iBio Inc. (IBIO)
First, iBio, Inc. (IBIO Stock Analysis) has been on the list of penny stocks to watch for a few months now. After skyrocketing in February, the overall trend has been a downward one. But that doesn’t mean there weren’t single-day opportunities for traders to take advantage of. It does, however, mean anyone who’s looked at this for a longer hold is probably disappointed right now.
The penny stock ran from $0.30 to highs of $3.40. If you look at it this week, you’ll see that IBIO stock trades around $0.85. On Thursday, however, the company came out with some big news. iBio announced that it signed 2 Master Services Agreements and a memorandum of understanding with the Infectious Disease Research Institute. This was in support of iBio’s “SARS-CoV-2 Virus-Like Particle” vaccine development.
Under the agreements, The Infectious Disease Research Institute will support pre-clinical development and offer clinical trial oversight during iBio’s process development and manufacturing services to the Institute as needed. In addition, the MOU calls for a separate agreement within 60 days between the parties if the company opts to include one of the Institut’s adjuvants in the program, called IBIO-200. Corey Casper, M.D., MPH, Chief Executive Officer of the IDRI and Clinical Professor of Medicine and Global Health at the University of Washington said, “Combining iBio’s VLP antigen with an IDRI adjuvant provides for promising safety and efficacy characteristics, and importantly, the ready ability to scale-up manufacturing to help meet the projected global demand for a suitable vaccine.”
Nautilus Inc. (NLS)
One of the unassuming coronavirus penny stocks has been Nautilus (NLS Stock Analysis). It was actually one of the penny stocks we’ve discussed since early December of 2019. At the time, shares traded around $1.60 and since then, NLS stock has seen two massive breakouts. This most recent jump may have gotten some extra firepower as well.
The company is well-known for its home fitness equipment. What better products to use and/or gift during the holidays (back in December) and now since people are holding up in their homes. On Wednesday afternoon the company came out with its preliminary first-quarter 2020 sales results. Let me preface this by pointing out many companies actually cut their guidance due to the potential impacts of the coronavirus.
Nautilus, on the other hand, saw an increase in Q1 figures. Mainly driven by its Bowflex and Schwinn brands, Nautilus saw sales increase by 11%. Net sales for Q1 came in at roughly $94 million. This was actually the first time quarterly sales grew year over year since the third quarter of 2018. By utilizing strong e-commerce and curbside pickup platform, Nautilus said it has been able to succeed during a time where most companies are closing down. As a result of the preliminary data, Nautilus is actually raising its first-quarter guidance or 2020. But something to keep in the back of your mind will be the next few quarters ahead and how the coronavirus’s unknown impact may or may not become a factor. For now, NLS stock is enjoying a strong, positive market sentiment.
ToughBuilt Industries (TBLT)
Similar to Nautilus, ToughBuilt Industries (TBLT Stock Analysis) is another unassuming beneficiary of the coronavirus pandemic. It’s also not a biotechnology penny stock. The company focuses on designing and distributing tools and other related items. While the overall trend has been relatively sideways for the last few weeks, like IBIO, that doesn’t mean there hasn’t been plenty of one-day opportunities to take advantage of. However, the latest update form the company could give reason to take a closer look at ToughBuilt right now.
The company has had its fair share of issues with previous financings, which is a likely reason shares are trading so low. But that doesn’t change the fact that ToughBuilt is a brand you’ve likely seen in many retail locations for home improvement. As such, it’s and important thing to factor in and one that leads me to the next point. ToughBuilt continues to sign on new partners. This week, the company inked a deal with Lowe’s (LOW). Specifically, Lowe’s awarded ToughBuilt a portion of its soft-sided tool storage business as well as all of its kneepad business. This will launch acrross the country and online for October 2020.
According to ToughBuilt’s forecasts, the company expects its ongoing total annual forecast to near $22.7 million. While this is a solid piece of news for the company, it’s also important to note that ToughBuilt hasn’t been all rainbows and roses. As I said before, they’ve had a lot of pressure to sift through that includes, among other things, millions of dollars in dilutive financing. So if TBLT stock in on your list of penny stocks, I would say to keep that in the back of your mind for now.
Shares of CleanSpark Inc. (CLSK Stock Analysis) have been relatively quiet for the last few weeks. While there were a couple of days that the penny stock jumped, CLSK has held a pretty tight channel since late March. Where most of the “traditional” coronavirus penny stocks have leaned toward a vaccine, CleanSpark is a bit different.
The company focuses on software and intelligence services. Initially directed at energy users, it looks like CleanSpark has found an application to coronavirus. In March the company announced that its subsidiary, p2klabs, engaged AlertNest to help design a mobile app to keep people informed about local updates on coronavirus. While this was on task with the company’s overall “tech-based” model, the latest news is somewhat different.
This week the company’s stock soared beyond the $3 mark. This came after the company announced another round of coronavirus news. This time, however, I think it was a bit of a stretch outside the business model of the company. Nevertheless, the mark has spoken and it was viewed as a big positive. CleanSpark announced a joint venture with members of its multinational supply and distribution channel partners to secure medical supplies.
These include N-95 masks, KN-95 masks, gowns, gloves, and personal protective gear. So as this has nothing to do with technology at all, it does showcase a company’s ability to leverage relationships to get involved with the fight against COVID-19. Whether or not this news will stick with investors and further propel CLSK stock, is another question.