3 Penny Stocks Powering Into The Weekend
With the long holiday weekend, penny stocks are sure to be on the list of things to look for. The fact is that we’ve seen a huge uptick in retail trading of small- and micro-cap stocks recently. So it seems fitting to look for a few of these stocks under $5 while there’s plenty of down-time to research.
Overall, the stock market has been extremely volatile. No matter what you think of geopolitics, the price of gold, or the recent stimulus money, this market is trying to aggressively recover. Hopes are high that the economy can continue reopening. However, there’s no denying the coronavirus has wreaked havoc on a clear action plan.
Some states and cities are slowly reopening in phases while others are walking back due to new cases. Hospitals in at least two Texas counties are at full capacity heading into the holiday weekend. Reports cite that county judges are urging residents to shelter in place.
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Meanwhile, new curfew orders are back in force in cities like Miami as well. “For some people, they’re listening to mixed messages from Washington and they’re deciding they don’t need to wear a mask,” Miami Beach Mayor Dan Gelber told Fox News’ Neil Cavuto in an interview on “Cavuto Live,” Saturday.
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What will this mean for markets on Monday? As we’ve all come to know and love, the trends tend to go by the day. So, depending on how investors digest the information over the weekend, that will likely dictate the opening scene next week. Regardless of coronavirus, we’ve seen many penny stocks to buy and sell heading into the weekend. Many of these hadn’t seen trading momentum like this in months.
But again, we’ve got a whole new group of retail traders driving markets right now. They’re more focused on trading volume than on the companies themselves. We saw this, first hand, with companies like Hertz and JC Penney, both of which filed for bankruptcy earlier this year. Yet their share prices soared for a brief moment as gun-slinging traders bought into hype-fueled action. With this in mind, it’s important to have a plan of action going into your trades next week and in the future.
Blindly going in on a trade “just because YOLO” isn’t the best way to become consistently profitable. Understand the risks involved, set your sites on profit targets, and keep in mind what’s driving momentum. Whether it’s news or plain market hype, you’ll be well-equipt to make money with penny stocks when you know why they’re moving the way they have.
Penny Stocks To Watch #1: Lipocine Inc.
Lipocine Inc. (LPCN Stock Report) has been in recovery mode this year. If you remember back in February when we started following LPCN stock more closely, the company was still licking its wounds from a huge miss from its TLANDO treatment. The oral testosterone product candidate for testosterone replacement therapy didn’t meet 3 endpoints in its study. That was when LPCN stock dropped from over $2.80 to under $0.40.
Fast-forward to the second quarter and the company has been working on advancing its pipeline further. In May Lipocine received RDA clearance for an investigational new drug application for a Phase 2 study of LPCN 1148. This is a prodrug of bioidentical testosterone to treat liver cirrhosis. Furthermore, the company reported results of a preclinical study of its LPCN 1144 which demonstrated encouraging results according to the company. H.C. Wainwright took notice of these milestones and increased its price target on LPCN stock to $3 while maintaining a Buy rating.
But since then, there hasn’t been much from the company as far as news is concerned. The last filing that was made in June was an 8-K showing results from its shareholder meeting. Also, if you take a close look you’ll see that there’s been some insider buying going on in June. A number of FORM 4s filed, show that directors were buying stock last month. On July 2, LPCN stock began trading higher late in the afternoon without any apparent catalyst. However, shares have steadily climbed since late February. Since the 24th, LPCN is up over 160%.
Penny Stocks To Watch #2: Waitr Holdings
It’s exciting when you get to see a company evolve from very little into something much greater. In my opinion, we have been following Waitr Holdings (WTRH Stock Report) since its early day. What was more of a “skeptical” play on Uber Eats or Postmates has actually evolved into a story that investors have gotten behind. That’s especially true as stay at home orders boosted attention on food delivery companies.
Last November was when we really began digging into the driving force behind Waitr Holdings. Shares had just reached 52-week lows and there were more questions than answers as to the future prospects of the company. However, as fait would have it, management sunk its teeth into the company identified that it was lax in its efforts and focused on building the business moving forward.
Specifically, Adam Price, CEO at the time said, “Moving forward, you should expect to see steady improvements in cash flow compared to the past several quarters. You should also expect to see a refocus on existing markets where there is a strong user base, great brand awareness and still a lot of growth potential.”
As many have seen WTRH stock has been steadily on the move ever since. Most recently, Waitr announced that it would be expanding its Louisiana footprint. The company hired a total of 225 customer service and dispatch team members in the state since January. Furthermore, after Carl Grimstad took over at Waitr in January 2020, the company has implemented strategic initiatives around service and profitability. These initiatives along with others have led to improved revenue and Waitr’s first ever profitable month in February of this year.
Penny Stocks To Watch #3: Cinedigm Corp.
Cinedigm Corp (CIDM Stock Report) has also benefited from mandates during coronavirus quarantine. June was a big month for CIDM stock and to be honest, the big move we discussed on June 3, could have easily been a case of the “1-day” penny stock breakouts. But that move continued even higher the next day. At the time we started following the stock, CIDM shares traded around $0.75. It had already enjoyed a jump in May and like most illiquid stocks (at the time) expectations weren’t extremely high for a continuation. But as we know, Genius Brands’ breakout this year had traders looking for sympathy plays & Cinedigm may have initially been one of them.
Cinedigm acquired all North American distribution rights to Cotton Films’ EVERYDAY MIRACLES in late-May. Following this, the company announced a strategic partnership with SpringServe, the leading ad serving platform for over-the-top and connected TV. It also expanded its distribution of “The Bob Ross Channel” on Roku (ROKU Stock Repor). What added more fuel to the fire a partnership with Vewd. According to Cinedigm, Vewd is the world’s largest Smart TV over-the-top provider and will now offer Cinedigm’s portfolio of entertainment networks. But following these big updates, CIDM stock has been free-falling a bit. After reaching $6, shares pulled back as low as $1.67 last week.
Before the holiday weekend went underway, however, CIDM stock started rebounding late Thursday afternoon. This came after the company announced its next earnings date. Cinedigm reports Q2 figures on July 6th. So if this is one of the names on your list of penny stocks right now, keep this in mind. Speculative momentum can be a factor going into earnings. But the devil’s in the details. A positive result may bode well for the market but as we’ve seen, lackluster earnings can put a damper on short-lived bullishness.