Just Because Penny Stocks Is The Label, Doesn’t Mean There Isn’t Potential or Greatness
How often do you hear the words “penny stocks” and immediately shudder? It’s unfortunate but to the uneducated investor, those words are typically associated with fly-by-night companies thanks to movies like The Wolf Of Wall Street or Boiler Room. But we’re here to advocate for these little guys for a few reasons.
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First, not all penny stocks are bad nor are the companies behind them. For the most part, a company may trade as a penny stock based on valuation, assets, or maybe it is an actual start-up company aiming to build. No matter the case, this leads me to my second point. Penny stocks are easily accessible by all traders/investors.
Where an average trader may only be able to purchase 5 shares of Apple (AAPL) for example, they could take that same dollar amount and buy 140 shares of a penny stock trading at $1.40. Where it would only take a move of about 28 cents to realize a return of 20%, Apple stock would need to jump over $50 a share to see the same.
Can You Make Money With Penny Stocks?
Obviously there is more risk with penny stocks and a drop of the same 28 cents could hurt your P&L quite a bit. But if you’re ok with a little risk, penny stocks, when traded correctly can produce big gains, quickly.
This brings me to today. Looking back at the year so far, we all know how crazy it’s been. But the fact of the matter is that penny stocks have been some of the best performing equities of all. The coronavirus has played a big role in this as we’ve come to know.
With COVID-19 likely to be a factor for the time being, it also doesn’t hurt to have an eye on new & emerging coronavirus penny stocks either. With that, let’s take a look at some of the penny stocks 2020 has turned into big winners thus far.
Money Making Penny Stocks In 2020: Novavax Inc.
This year, one of the top penny stocks to watch was Novavax Inc. (NVAX Stock Report). When we first started covering new progress from the company NVAX stock was trading around $4.40. While this is the higher end of the penny stock definition, it was still an interesting company to watch after it started making headlines. At the time, Novavax had just announced that it was granted Fast-Track designation by the FDA for its seasonal flu vaccine. Keep in mind that this was during the very early stages of the coronavirus pandemic.
Shares continued to steadily trade higher right up until January 21st. This is when NVAX stock would leave the world of penny stocks for good (at least for now). This is when the Wuhan coronavirus started to really hit the news cycle. Shares jumped to more than $10 during the premarket session and haven’t stopped since.
This week NVAX stock has managed to reach new highs of $25.25 days after initiating Phase 1 trials in Australia for its COVID-19 vaccine candidate. This marked a jump of over 470% since we initially reported on the company in January just as things were heating up.
Money Making Penny Stocks In 2020: Chembio Diagnostics
Chembio Diagnostics (CEMI Stock Report) was another one of the top penny stocks that hit it big in 2020. Where NVAX stock has been running since mid-January, CEMI stock has only been on the move since mid-March. At the time when it first caught our attention, the penny stock was trading around $4.
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As we initially saw, the spike in trading came as Chembio announced a strategic partnership with LumiraDx to develop a diagnostic test. While CEMI stock had aggressively pulled back during the following few sessions, it eventually pulled back up, where we started to discuss the penny stock again. This is when Chembio reported that it received a $4 million purchase order from Bio Manguinhos. Since then CEMI stock has been a force to be reckoned with.
This week, shares of the former penny stock reached highs of $14.90. Anyone lucky enough to have seen this during the few days it pulled back to the $2.30 range, should be happy at this point. The total move since mid-March would be anywhere from 272%-548%. The company recently secured an emergency use authorization for its COVID-19 testing system as well so it may continue as a stock to watch in April.
Money Making Penny Stocks In 2020: Alpha Pro Tech
Alpha Pro Tech (APT Stock Report) was initially one of the speculative penny stocks to watch amid coronavirus fears earlier this year. When we first came across the company, there wasn’t really much to speak of. The company didn’t have many headlines but it did have something that interested traders. That “something” was a website that showed the sale of facemasks. As we’ve all come to know, facemasks are becoming a key staple among households across the world. Many places are even requiring them before entering.
When APT stock first came to our attention, it was trading around $5.20. Prior to this, it was a no-volume penny stock trading under $4 per share for years. Fast-forward to now and this has been one of the top penny stocks of 2020. Shares have rallied as high as $41.59 and currently trade around $14.
While that’s a considerable drop from highs, it’s still much higher than where it was in January. Over the course of the last 4 months, APT stock has managed to run anywhere from 169% to 700% depending on which “high price” you were looking at since our initial update.
Money Making Penny Stocks In 2020: Inovio Pharmaceuticals
Some penny stocks were in the right place at the right time at the early stages of this virus. In fact, when we first started talking about Inovio Pharmaceuticals (INO Stock Report) shares were trading around $3.30. The company had just been given a price target of $13 by ROTH Capital. On top of that, Inovio was still making progress on its VGX-3100 for immune stimulation in cancer. Things started to compound as attention built around coronavirus penny stocks.
Inovio received a $9 million grant in January to develop INO 4800 as a potential treatment. Fast-forward to this month and Inovio was just given another multi-million grant for COVID-19 vaccine development. This week, shares reached highs of over $9.35 as new interest came back to COVID-19 stocks. Additionally, earlier this year, INO stock managed to climb to highs of $19.36 after accelerating its timeline for INO-4800 in early March.
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It’s interesting to think back to December when the focus was on an immune pipeline geared more toward cancer. The market valued the company at just over $3 a share. Over the course of the months to follow the former penny stock has jumped anywhere from 183% to 487%.
Money Making Penny Stocks In 2020: Vaxart Inc.
But just because these coronavirus penny stocks outperformed based on big moves in price, you can’t discount the penny stocks that have remained under $5 but have seen big % changes. Vaxart Inc. (VXRT Stock Report) is one example. When we first came across this company, VXRT stock was trading around $0.96 and had just reported results from an H1 influenza vaccine study. That was convenient considering the timing of coronavirus and its similarities with certain types of flu.
During the weeks that followed, VXRT stock jumped as high as $3.50 and still trade above $2.30 right now. The company provided an update at the end of March stating it expected to advance the best performing vaccines to manufacture for clinical trials. The company said development services have started. Furthermore, if Vaxart elects to proceed with cGMP manufacturing, Emergent is expected to produce bulk cGMP vaccine for use in a phase 1 clinical study. Vaxart currently expects to initiate these studies early in the second half of 2020.
While there haven’t been any new updates this week, shares are back on the move. For the first time since mid-March, the penny stock is trading above $2.30. Since January, VXRT stock has rallied anywhere from 158% at Monday’s $2.48 high, to 264.5% at the high of 2020.
