Don’t Believe In Penny Stocks? This Might Make You Think Twice
What comes to mind when you think about penny stocks? Low price stock, B.S. companies, or maybe even long-shot lottery tickets? There’s no right or wrong answer to this question but there is an answer to the next question. Are penny stocks worth it?
We hear about high-flying stocks that trade for pennies a share and end up rallying to “dollars”. But what happens when that rally doesn’t just end with a few dollar move or even a $30 move.
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You read that correctly, we’ve seen first-hand how stocks under $5 can go on to run to $30 or higher. Many of these jumped to all-time highs simply based on speculation. What were some of the biggest coronavirus penny stocks that hit it big?:
Vaxart Inc. (NASDAQ: VXRT)
The first time we talked about VXRT stock it was working on an oral tablet to treat influenza. Shares traded around $0.96 and have since moved as high as $14.30 following COVID-19 vaccine progress. Read More Articles On Vaxart Inc.
Compugen Inc. (NASDAQ: CGEN)
When CGEN stock hit the radar it was H2 of 2019. Shares traded around $4.50 and the company was working on a first-in-class therapeutic antibody targeting PVRIG. While not necessarily COVID-19 related directly, the company’s progress on non-small cell lung, ovarian, breast, endometrial, and colorectal cancers has raised eyebrows. Shares have jumped as high as $17.85 since that late 2019 update. Read More Articles On Compugen Inc.
Inovio Pharmaceuticals (NASDAQ: INO)
It’s funny to think that at one point INO was a penny stock. But as readers have seen, first-hand, INO stock has enjoyed an epic, COVID-fueled rally since late December. While coronavirus wasn’t yet a buzzword, Inovio was working on its pipeline of immune vaccine candidates. With the rise of COVID-19, Inovio turned its attention toward addressing that unmet need. Over the course of the last few months, INO stock rallied as high as $33.79. Read More Articles On Inovio Pharmaceuticals.
Alpha Pro Tech (NYSEAMERICAN: APT)
Shares of APT stock were hovering around the higher end ($5) of the penny stock range when we first found the company. In a very simple manner, Alpha Pro Tech provides masks. That’s how it was caught in the cross-hairs of the COVID-rush this year. Shares managed to run as high as $41.59 and still trade above $16. Obviously, with the push for mandatory face-masks, Alpha Pro Tech has been one of the PPE stocks to watch. Read More Articles On Alpha Pro Tech.
But these are just the appetizers to the main course of why penny stocks can be well-worth it. During the ides of January, one “small biotech penny stock” hit the scanner. It stayed on our list of penny stocks to watch until it left the range for good. And a recent development roughly 6 months later saw it obtain a $1.6 billion award from the federal government.
Novavax Inc. (NASDAQ: NVAX) Runs Over 2,500% In 2020
Say what you will about penny stocks but there’s at least one you can’t argue with. Novavax Inc. (NVAX Stock Report) was just a small-cap biotech company working on a flu vaccine.
On January 15th we discussed NVAX among other penny stocks after Novavax announced FDA Fast Track Designation for its seasonal flu vaccine candidate. At the time, shares were trading around $4.48 and the market saw “above average volume” for that time. NVAX stock traded more than 5 million shares and that was considered a big day.
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However, as we would soon come to find, COVID-19 “blessed” Novavax with a way to get involved. Obviously the similarities have been pointed out between coronavirus and the flu. But there are clear differences as well. In any event, the shift in direction wasn’t something that seemed out of the ordinary.
Novavax Capitalizes On Timing And Prior Development Milestones
Considering so many other companies tried anything to make COVID headlines, Novavax remained on brand. After initiating Phase 1 trials in Australia for its COVID-19 vaccine candidate, that’s when things became more serious for the company as far as investors were concerned. It was also when NVAX stock would leave the world of penny stocks for good (so far). The WHO would eventually add coronavirus vaccines in preclinical stages to its list. It included Novavax, Inc., as well as Vaxart Inc., mentioned above, among others.
In June, the company entered into a contract with the U.S. DoD to manufacture NVX‑CoV2373, its COVID candidate. It also managed to raise some $200 million. The company also began attracting big pharma. AstraZeneca alum Filip Dubovsky was appointed to the position of Chief Medical Officer. Dubovsky was part of its MedImmune biologics subsidiary.
This week, the company made yet another major milestone. In a July 7 announcement, Novavax reported that it has been selected to participate in Operation Warp Speed. This is a U.S. government program that aims to begin delivering millions of doses of a “safe, effective vaccine” for COVID-19 in 2021. What’s more, is that Novavax was awarded $1.6 billion by the federal government to complete late-stage clinical development. This includes a pivotal Phase 3 clinical trial, establishing large-scale manufacturing, and delivering 100 million doses of NVX‑CoV2373. Novavax said this could be as early as late 2020.
After the news hit, the NVAX stock price shot up to highs of $117 during premarket trading. At the start of the regular session, Novavax reached a high of $111.77. That’s a 2,393% jump from where shares traded on January 15th. If you consider the premarket high of $117, NVAX stock has exploded more than 2,500%. So anyone who’s wondering if penny stocks are worth it, consider what happens if and when companies end up executing on their business plans.
There’s still likely a long road ahead for Novavax. There’s also a chance that NVAX stock doesn’t come through with optimal results in which case, there would be a very different discussion about price. But for now, NVAX has clearly shown how “worth it” penny stocks can be. Let us know what you think. Will Novavax take NVX‑CoV2373 to the finish line by 2021 or will it come up short? Read More Articles on Novavax.