Are These 3 Penny Stocks Worth A Closer Look?
What are penny stocks? If you’re new to trading, you may not know this definition. Let’s dive in. Penny stocks are shares of companies that you can buy for under $5 a share. I know, I know, there are others who may define penny stocks differently. But to be honest, no matter your definition, the $5 limit allows people to look at more than just a handful of these companies. At the end of the day, the real focus shouldn’t be 100% on the price but on the potential you think is in play.
For most people trading penny stocks, the goal is to take a little bit of money and turn that into much more money. Leveraging lower-priced shares, investors look to benefit from small moves in price in exchange for large percentage gains. One of the keys to finding penny stocks to buy is looking for potential catalysts.
These are things that investors tend to react to and make initial trading decisions off of. Has a company reported earnings and are they good? Has a company completed a trial and what were the results? Will a company host a major business webinar and what’s it about?
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All of these and more are instances where communications can act as major catalysts. In any event, we’re going to be looking at a few penny stocks to watch heading into the second half of the week. Are they worth a closer look? That’s up to you to decide but they’ve all come out with recent news to take into consideration.
Penny Stocks To Buy [or avoid]: CleanSpark Inc.
Shares of CleanSpark Inc. (CLSK Stock Report) have steadily risen over the last few weeks. It has been one to watch since April. At first, the company took its software focus and announced that its subsidiary, p2klabs, engaged AlertNest. This was to help design a mobile app to keep people informed about local updates on coronavirus. It also took a step outside of its main focus announcing a joint venture with members of its multinational supply and distribution channel partners to secure medical supplies.
But more recently the company has refocused on its main business model. It’s not just software but software for energy customers. As we know, energy penny stocks are gaining a lot of attention right now. CLSK could be benefiting from both sector momentum and interest after recent news.
This week the company announced that with ReJoule, they have been awarded a grant from the California Energy Commission. ReJoule is a battery diagnostics and optimization company. The grant is approximately $2.9 million and is slated to be deployed over the next 30 months. ReJoule and CleanSpark will be further supported by Ford Motor Company , BigBattery, and GRID Alternatives. There’s no doubt that electric vehicle and energy stocks have been a focus in the market. With shares of Tesla and Nikola rallying on Wednesday, will this news help “spark” another move for CLSK stock?
Penny Stocks To Buy [or avoid]: Senmiao Technology Limited
Senmiao Technology Limited (AIHS Stock Report) was another one of the penny stocks to watch on Thursday morning. This came after the company’s latest update. Senmiao announced its financial results for its full fiscal year ended March 31, 2020. Revenue from automobile transaction and related services business increased by 514% year-over-year to $15,655,575 from $2,551,107. Furthermore, revenue from sales of automobiles grew to $11,536,691, up 535% from $1,815,425 in the prior year.
These weren’t the only triple-digit growth figures. Gross profit from automobile transaction and related services business increased by 357% year-over-year to $3,375,337 from $738,920. Additionally, in Fiscal Year 2020, there were over 2,300 new drivers joining Senmiao’s online ride-sharing business.
Senmiao provides automobile transaction and related services targeting the ride-hailing industry in China. “We are also actively exploring opportunities for new capital, such as our recently announced US$7 million financing transaction into our auto business operating entity in China , that will increase our ability to weather the downturn resulting from COVID-19 as well as competition and continue to expand our business in southwestern China . To summarize, we believe we are executing on our goal in becoming an outstanding and leading provider of automobile transaction and related services to the growing online ride-hailing eco-system in China,” commented Xi Wen, Chairman, Chief Executive Officer and President of Senmiao.
Despite the scrutiny that investors have had when it comes to Chinese stocks, AIHS shares have jumped over the last few days. On Wednesday, AIHS stock gapped up and ran to highs of $2.26 before pulling back in to $1.25 by the close. On Thursday, the penny stock is back above $2 during premarket trading.
Penny Stocks To Buy [or avoid]: Big 5 Sporting Goods
Finally, Big 5 Sporting Goods Corporation (BGFV Stock Report) was on the jump early Thursday morning. After closing its Wednesday session at $1.92, the penny stock moved up as high as $4.25 on July 9. It doesn’t have a massively low float in my opinion, but is lower than some of the other trending penny stocks on Thursday. What has triggered the move?
Before the opening bell, Big 5 provided select preliminary fiscal 2020 second-quarter financial results for the period ended June 28, 2020. Steven G. Miller, Big 5 Chairman, President, and Chief Executive Officer commented, “We are pleased with our exceptionally strong second-quarter performance that was driven by substantial sales and merchandise margin gains over the back half of the quarter and considerable operating leverage from meaningful reductions in our cost structure. This powerful combination has contributed to significantly reduced inventory and net borrowing levels, and our business is in a very strong financial position.”[Read More] Coronavirus Penny Stocks Get A Booster Shot In July 2020
Some things of note were its sales and EPS. Big 5 expects Q2sales of between $228 million and $241 million. As far as EPS, BGFV expects somewhere in the range of $0.52-$0.54. However, after such a huge jump, can BGFV stock maintain these higher levels or is it set to come back to the range it traded at previously? Something else to note is that this is the first time BGFV has firmly moved above its 200 Day Moving Average. Prior to that, the 200DMA acted as a resistance level. Considering it sits around $2.33, it will be interesting to see that “IF” BGFV pulls back, can it hold above the 200 day? Either way, it could be simply one of the volatile penny stocks to watch in the meantime.