Are These On Your List Of Penny Stocks Today?
So you’ve found some penny stocks, you made a list, you’ve done your research; now what? If you’ve been in this position before, you’re not alone. Hundreds of traders go through this same routine every day. What I’m talking about is that point in time where you need to make a move one way or another. Are you going to be investing in penny stocks, are you going to be trading penny stocks, or are you avoid certain ones at all costs? Smart traders say that sometimes the best trade isn’t the one you make. It’s the one you don’t make.
While I like making money with penny stocks, I can appreciate this thought. If you feel that emotion and FOMO play too big a role, you might want to sit back a minute and watch a trade unfold. While you’re trading strategy is important, so is preserving your capital.
Instead of jumping into an over-extended trade and losing money, sitting on the sidelines simply allows avoiding that entirely. Is it something to practice commonly? In my opinion, no because the stock market is all about risk. If you wanted something safe, don’t expect the same kind of gain potential.
What Are The Best Penny Stocks To Buy?
My point is to make sure you look for prime set-ups. Penny stocks with light volume and thin trading may move quickly. But unless there’s a liquid market, it could be hard to sell stocks. Similarly, a very liquid market may seem appealing.
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But if the stock price doesn’t move enough, you may not have the position size to make “scalping” work. So, it’s important to find some balance between big momentum, stronger fundamentals, and justifiable catalysts. With this in mind, here’s a look at some of the trending top penny stocks to watch on Wednesday. Will they be penny stocks to trade or fade before Friday?
Penny Stocks To Buy, Trade [or Fade] #1: CPS Technologies
CPS Technologies (CPSH Stock Report) has traded far-below $2 for most of the last 2 months. Surprisingly, this came after it skyrocketed to highs of $2.39 earlier in the year. The company produces metal-matrix composite components. These are used in various electrical systems. Sound foreign? These components are used in things like hybrid and electric vehicles, high-speed trains, subway cars, wind turbines, and even routers.
What’s behind the latest move for CPSH stock? After the close on Tuesday, the company announced its first quarter 2020 results. After closing the day at $1.09, the stock began waking up following the news. Shares ended up climbing above $1.60 during after hours trading on May 5. That momentum has grown overnight and continued into Wednesday’s pre market session.
The company announced revenues of $6.5 million and an operating profit of $622 thousand for the quarter. This compares with revenues of $5.3 million and an operating loss of $744 thousand for Q1 of 2019. Earnings per share saw a big boost, flipping from a loss of $0.06 in 2019 to $0.05 EPS income this year.
Grant Bennett, President and CEO, said, “Revenues in the first quarter were up significantly compared to the first quarter of 2019. We have previously commented on new contracts with our three largest customers. As new prices and higher volumes from these contracts continue to be phased in…These developments suggest continued strong performance throughout 2020 – subject of course to possible unforeseen coronavirus impacts.”
Penny Stocks To Buy, Trade [or Fade] #2: Nio Inc.
This is another one of the penny stocks investors love or hate – or both. Nio Inc. (NIO Stock Report) has a storied past that involves failing production, high competition, questionable leadership…But it also includes record deliveries, strong leadership, and an eye for tactical navigation of the business battlefield. Say what you will about the company but “then” and “now” have started to become very different. What I’m referring to is NIO stock last year compared to recent.
This year has been a big one ofr the company. That’s in terms of progress including stronger delivery numbers. Since the Electric Vehicle industry is growing more competitive in China, companies like Nio (and Tesla) are working to differentiate. Shares of NIO stock reached a high of $5.65 earlier this year. That was up significantly from October 2019’s low of $1.19. As shares did slide back below $3, the last few weeks have built up to the company’s latest delivery update in April.
On Wednesday, Nio announced its April 2020 delivery results. NIO delivered 3,155 vehicles in April 2020. That represented consecutive growth of 105.8% month over month and a 180.7% growth year over year. Nio also commenced deliveries of its new ES8 last month. As of April 30, cumulative deliveries of the ES8 and the ES6 reached 38,906 vehicles, of which 6,993 were delivered in 2020. Steven Feng , chief financial officer of NIO, added, “As we continue to expand our sales network through the launch of more efficient NIO Spaces, we now have 105 points of sales in operation in China , promoting our brand and products to a growing number of regions and communities. Additionally, with the positive order and delivery momentum, we remain committed to further improving our gross margin and operational efficiency.”
Penny Stocks To Buy, Trade [or Fade] #3: Medigus Ltd.
Medigus Ltd (MDGS Stock Report) has been one of the penny stocks to watch since late April. At that time, MDGS stock traded below $2. But if you look at its chart, you’ll see that was just the start of an epic move. Right up through the start of this month, MDGS stock managed to climb as high as $5.15. What was behind the initial move?
Medigus announced the signing of a collaboration agreement with L-1 Systems Ltd. for the joint commercialization of various COVID-19 related products and solutions to governmental agencies. Medigus also signed an LOI with Polyrizon for an investment and joint commercialization of biological gels. This deal was also proposed with a revenue share model. This second event is what has played a bigger role this week.
On May 6th Medigus announced that it was informed by Polyrizon regarding the filing a patent application. The patent application, US application no. 2005/0281775, refers to “formulations and methods” for preventing association or interaction of viruses with a mucosal membrane and for removal of viral particles therefrom. This invention relates particularly to “formulations and methods for preventing viral infections by Coronavirus”. Thanks to this latest update (even though it’s still waiting on a definitive agreement) MDGS stock is gaining more traction in the stock market today.
Penny Stocks To Buy, Trade [or Fade] #4: China Rapid Finance
What list of penny stocks would be complete without the “mysterious” name that barely trades but has “randomly” broken out? China Rapid Finance (XRF Stock Report) typically trades less than 100,000 shares per day. In fact, on May 5, XRF traded less than 1,500 shares total. But on Wednesday, that is a very different story. Before I get into the company, you have to consider the share structure here. Based on the XRF stock profile page, and cross-referenced with other sources, the market’s public float is less than 10 million shares. XRF falls into the category of low float penny stocks. Knowing this, the activity could be incredibly volatile and that’s what we’ve seen so far before May 6th’s open.
Shares of XRF stock closed at $0.94 on Tuesday. However, during premarket trading on Wednesday, the penny stock has already run to highs of $2.40. The last time XRF saw above average volume like this was on December 26th 2019. Shares gapped up from a previous close of $1.83, opened at$3.43, saw a high of $6 then steadily slid back to lows of $0.51 this year. So why is XRF stock moving on May 6?
This morning the company announced the execution of a set of agreements with Yong Bao Two Ltd. This is the parent company of SOS Information Technology Co., Ltd. via a variable interest entity, the shareholders of YBT, eight sophisticated investors introduced by YBT and True North Financial, LLC. Upon the closing, YBT will become a wholly-owned subsidiary of China Rapid. YBT, through its consolidated subsidiaries, is involved in the emergency rescue business providing emergency healthcare services, emergency roadside assistance, emergency living assistance, and other rescue services in China. Take what you will from this update but understand that XRF stock has a low float. If it’s on your list of penny stocks today, don’t be surprised by big swings in either direction.
