Are These On Your List Of Penny Stocks Right Now?
When it comes to penny stocks, even the slightest bit of good news can trigger a huge rally in the market. It’s also good to keep in mind that share structure can have a lot to do with how quickly that move comes. You may have heard about the term “low float” before.
When it comes to stocks under $5, a low float can mean it’s time to tighten up those boot straps. What’s the reason behind that idea? Well, when you talk about low float penny stocks, for instance, you’re talking about stocks with fewer shares available in the open market. As simply supply and demand metrics would suggest, higher demand, lower supply, price tends to rise quickly.
Scarcity can play a role, sure, but by now, low float penny stocks are sought after not because people want to invest in these companies (initially). They know how big the shares can jump. But this isn’t for the timid. I’ll be the first to say that making 100% or more within the matter of a few hours or even minutes is incredible.
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It is, however, something you also need to be ready for. Simply put, these types of penny stocks are incredibly volatile. Not only are we talking about cheap shares that are wild anyway. We’re talking about less availability of these cheap shares. This tends to make for an explosive and high-risk scenario.
Why do I mention this? We talk a lot about fundamentals and news catalysts becoming a trigger for a rally. But you should also consider things like share structure as well. If there’s “big news” and fewer shares in the stock market to trade, it could be an even more active day for certain stocks. With this in mind, are these on your penny stocks watch list this week?
Penny Stocks To Watch: Birks Group Inc.
We’ll start things off with one of the lower float penny stocks, Birks Group Inc. (BGI Stock Report). While BGI stock’s float isn’t the lowest we’ve seen, it is leaning toward that direction. Currently, shares outstanding show that under 19 million shares are out.
Since the float will never be greater than the shares outstanding, we can get a good idea of how big of a float it could actually have. There are financial sites that will give “float numbers” so why look at the outstanding, you may ask. In many cases, float numbers can vary. That all depends on where these outlets get information. But one thing we can see as a more constant is the O/S, so that’s why this is being referenced.
Needless to say, shares of BGI stock are off and running. As of pre-market trading on Thursday, the penny stock’s seen highs of $2.39. If BGI can stay around those levels, that would put it around 200% higher than where it began the quarter. But why is BGI stock rallying so strongly right now? The Canada-based jewelry retailer, late Wednesday posted its fiscal 2020 results. Birks Group recorded a net loss of C$0.68 ($0.50) per share.
This was narrower than its loss of C$1.02 per share a year earlier. Sales came in just shy of $170 M CAD and sales growth of 12.2%. Thanks to this update, the market reacted favorably so far. We’ll have to see if BGI stock has more momentum left or if premarket is that last bit of wind in its sails this week.
Penny Stocks To Watch: Hexo Corp.
One of the marijuana penny stocks we’ve continued to watch has been Hexo Corp. (HEXO Stock Report). The stock saw a big move last month and rallied to highs of $1.29. Since then, however, HEXO stock slowly slipped back to lows of $0.6569. One thing we can see though is that the 50 Day Moving Average on the HEXO stock chart has acted as a lower level of support. Since breaking above it in May, shares haven’t dipped below at all. In fact, HEXO stock has tested the 50DMA multiple times without dropping below it.
On Thursday, Hexo Corp was back in rally mode. This came flowing its latest news on the international stage. The company announced the launch of medical cannabis products in Israel. This is through a 24-month agreement with Israeli medical cannabis company, Breath of Life International Ltd. According to the company, HEXO completed the first shipment of 493 kilograms even amid coronavirus restrictions, internationally.
“We are proud to introduce HEXO’s premium indoor medical cannabis products into the Israeli market,” said Hugo Goldman, BOL’s CFO and interim CEO. The products are already receiving positive feedback from both patients and retailers, and we are looking forward to continuing to expand our strategic relationship with HEXO in Israel.”
The big question now it whether or not this kind of momentum can build this week. After the update, HEXO stock jumped to highs of $0.937 during premarket trading.
Penny Stocks To Watch: AIM ImmunoTech
AIM ImmunoTech (AIM Stock Report) has been one of the coronavirus penny stocks to watch this year. We’ve reported on this company since late-January. At the time we also explained how the coronavirus was starting to become “a big topic” and how “following trends in the market” could help determine potential penny stocks to watch. Fast-forward and AIM began testing Ampligen as a potential treatment for COVID-19.
In fact, earlier in June, AIM filed a provisional patent application for, among other discoveries, the use of its experimental drug Ampligen®. Specifically, it was as a potential early-onset therapy for the treatment of COVID-19 induced chronic fatigue. After being added to the Russell Microcap® Index, AIM started to attract a broader audience. Yet, while this was the case, the penny stock continued to trade in its sideways channel.
This week, however, AIM saw another surge. It came after the company’s latest update. AIM announced that it entered into a clinical trial agreement with Roswell Park Comprehensive Cancer Center. This is to support Roswell Park’s Phase 1/2a trial of Ampligen (rintatolimod) in combination with interferon alfa-2b. The target set will be cancer patients with COVID-19.
“Based on the preclinical studies, we are encouraged by the potential for an effective early-onset treatment against this new and deadly virus especially for cancer patients, who face significantly increased risk of severe symptoms or death…if successful, into tests of Ampligen in other high risk and immunocompromised COVID-19 groups.”Thomas K. Equels, CEO of AIM ImmunoTech
Funding for the clinical trial is provided, in part, through grants from the National Cancer Institute and AIM, as well as institutional support from Roswell Park. The enrollment of patients on the trial is expected to begin within 30 days.
Penny Stocks To Watch: AgEagle Aerial Systems
AgEagle Aerial Systems (UAVS Stock Report) has been on our watch list for quite some time now. Ever since the big move in April, UAVS Stock has been more active. At the time AgEagle expanded the scope for its contracted commercial drone work. Last month UAVS stock saw another pop in the market after we found some interesting information on the USPTO website. Traders were circulating information related to a recently filed patent on the USPTO site. It would appear that the patent has to do with drone delivery services.
As we explained earlier this week, July 7 saw a few big developments that have triggered more interest on the stock. First, an article came out in the Wichita Eagle, “It looks like Amazon has much bigger plans for the Wichita area than one warehouse.” The article discussed Amazon bringing a 140,000-square-foot warehouse to Wichita. The article continued, “but the company apparently has some much bigger news to come in Park City, which may include Neodesha’s AgEagle Aerial Systems.”
Author Carrie Rengers continued, “Part of what is fueling speculation related to Amazon and AgEagle is that around the time of AgEagle’s ‘major eCommerce company’ announcement, there was reportedly a video online showing Chilcott demonstrating how to unload an Amazon drone from its crate.”
Thursday, the company came out with an update that has continued to stir the market’s speculation. The company, along with the Kansas Department of Commerce in association with the Greater Wichita Partnership, today jointly announced that AgEagle will locate and expand its manufacturing operations in Wichita, Kansas. The company worked with the Kansas Department of Commerce to secure incentives as it evaluated locations in two different states.