Were Some Penny Stocks Were Worth An Investment This Year?
Investing in penny stocks isn’t a typical strategy for retail investors. For the most part, stocks under $5 are typically traded. The reason being is that penny stocks are so incredibly volatile. One day a stock could be worth $1, the next it could be trading over $5. Then the following week that same stock could be back to trading around $1 or even less.
With this in mind, why would anyone want to invest in penny stocks? Well, there is a different model some people take and that involves buying shares of companies “with potential”. Obviously, all penny stocks can have this argument. But some companies have the right mix of speculation and execution to “go the distance” and leave the penny stock nest for good.
It’s also important to remember, an investment approach involves a buy-and-hold strategy. This is different from swing trading, for example is that swing trading would be a buy-and-hold for a few weeks at most (maybe a month). But more than that and it starts to turn into more of an investment approach.
If there’s been one-year demonstration real potential for investing in penny stocks, it’s 2020. Everything from biotech penny stocks to automotive & tech penny stocks have demonstrated the power of cheap shares. While there are many penny stocks that exploded this year, let’s take a look at a handful that continue to raise the bar (and the distance away from that $5 mark).
Penny Stocks That Hit It Big In 2020 #4: Inovio Pharmaceuticals
It’s crazy to think that when we first began to really follow Inovio Pharmaceuticals Inc. (INO Stock Report) it was trading around $3.10. Over the last 6 months, an “investing” approach would have seen an increase of as much as 990%. That means a $1,000 position at the end of 2019/beginning of 2020 would have grown to $9,900 by June. So what did the company do to grow like this in 2020?
Early on in the year, the Coalition for Epidemic Preparedness Innovations provided the company with a grant of $9 million to develop its product INO 4800. The product in question could be used to tackle the coronavirus epidemic as well. Inovio’s DNA-based vaccine expected human testing beginning as early as this summer. Fast-forward to June and not only has INO stock jumped to highs of $33.79, it also revealed trial data for its COVID candidate.
Inovio Pharmaceuticals said the first part of its early-stage study for a Covid-19 vaccine yielded a positive result. INO-4800 was well-tolerated by participants over eight weeks. According to the company, the 10 reported adverse events were mostly redness caused by the injection. Despite dropping, the outlook for INIO stock could remain on the positive side of things for now. That’s based on a Benchmark Research analyst. Aydin Huseynov expects that the FDA will allow Inovio’s COVID-19 vaccine candidate to move to a Phase 2/3 study. He noted that while the Phase 1 efficacy data provided by Inovio was “insufficient to make a judgment call about the future utility of the vaccine,” he is still encouraged by the news.
He also reiterated his buy rating. The big question here is what happens next? While it’s great when penny stocks break out like this, one bad result can send it right back where it came from. With such a complex matter at hand, I wouldn’t write off more volatility at all. Needless to say, INO stock is still up considerably higher than where it was at the end of 2019.
Penny Stocks That Hit It Big In 2020 #3: Plug Power
Plug Power Inc. (PLUG Stock Report) has been one of the penny stocks we’ve watched for the better part of the last 18 months. In fact, when we first came upon the company, PLUG stock was trading around $2.50. While it had a great run to an ultimate high of $6.05 before the March sell-off, the longer-term move took it much higher. In fact, July saw the former penny stock rally to a high of $9.65. It even reached highs of $9.79 before the stock market opened.
One of the biggest focuses for the company has been on growth. It has aligned itself with many notable customers as well. Plug Power focuses on hydrogen and fuel cell technology. Obviously, companies like Nikola (NKLA Stock Report) have brought more attention to this segment of the market lately. What’s more, is that Plug Power has become more vocal on the topic as well. Remember, he’s the one that had targeted 2024 as a banner year for the company to reach $1 billion in revenue. That statement was made back in September of 2019. Some of the company’s largest customers are Amazon, Walmart, and Home Depot to name a few.
This week, CEO Andy March hit the “airwaves” again. This came as Plug Power had announced the acquisitions of both United Hydrogen and Giner ELX. In an interview with another financial outlet, Marsh gave his opinion on the market, company, and outlook for the next few years. “We laid out a plan to generate $1 billion in revenue by 2024. And it was actually based on also having more than half of all hydrogen be generated by Plug Power. We are the biggest user of hydrogen as a fuel in the world. Today, we essentially buy and resell hydrogen. With the acquisition of United Hydrogen, we actually have the ability to build large-scale hydrogen plants.”
Will Plug Power continue this trajectory and will it reach its 2024 milestone? Leave a comment below.
Penny Stocks That Hit It Big In 2020 #2: Workhorse Group
Workhorse Group Inc. (WKHS Stock Report) has been a speculative story that has turned out to be a big success in the stock market recently. We’ve watched this stock since last May. While it’s had its “decent” moves, nothing bigger has happened in WKHS stock that what’s happened in the last 3 weeks.
If you’ve just come across Workhorse Group, there’s likely a lot you need to digest with the company. Funny enough, earlier this year, WKHS was trading around $1.40. Other than 2 days last July, Workhorse was always known as a penny stock. However, what began with a “Trump Tweet” has now grown into something much more based on the recent press. Shares jumped to highs of $22.90 this week making WKHS more than just a 10 bagger in a few months; the stock climbed over 1,530% (so far).
Workhorse develops, manufactures, and sells trucks and power trains centered around an electric power plant. On June 19th, market chatter from Business Journal pointed to the company singing of an LOI to sell 1,200 electric-powered pickups to ServPro. Commercial scale production of the”Endurance” electric truck is expected to begin early next year.
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Later in June, Workhorse successfully passed the Federal Motor Vehicle Safety Standard tests for all of its electric delivery vans. Workhorse’s 10% stake in electric pickup maker Lordstown Motors Corp. has been one of the big attractions recently. Lordstown recently inked a deal with Goodyear Tire & Rubber Company (GT Stock Report) to work with 2 companies agreeing to collaborate on tires and service. Workhorse also secured $70 million in recent funding from HT Investments, which helped shares extend gains. Will that continue this quarter?
Penny Stocks That Hit It Big In 2020 #1: Novavax Inc.
Finally, Novavax Inc. (NVAX Stock Report) may have been one of the highest moving penny stocks on a dollar value level. NVAX stock may have not been the biggest percentage mover. But it certainly comes close to the highest running penny stocks. When we first started covering NVAX stock, it was trading around $4.30. This week it reached a high of $89.50, a 1,981.4% move (so far).
At the time we saw this one, Novavax reported that the FDA granted Fast Track Designation for its seasonal flue vaccine candidate. Then we saw the tides change across all of the biotech sector. With the novel coronavirus beginning to make its way across the globe, attention shifted to COVID-19 vaccines.
After announcing receipt of up to $388 million in funding from CEPI for COVID vaccine development, NVAX stock gapped up into a whole new price level. At the time the $388 million was the largest amount the Coalition for Epidemic Preparedness Innovations had invested, too.
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Fast-forward to recent and Novavax began early-stage clinical studies of its coronavirus vaccine candidate. It also expanded its leadership team and announced key promotions. One of its more recent appointments came with the addition of Frank Czworka as SVP of Global Sales. He explained that, “This is an exciting time to join Novavax, with much to be accomplished as we advance our COVID-19 candidate and prepare the regulatory submission for NanoFlu.”