Cheap Stocks To Watch During The First Week Of August
What’s the definition of penny stocks? If you go by the standard Securities And Exchange Commission overview, these are simply stocks under $5. While some might immediately assume that the exchange plays a factor, for the most part, we’re just talking about price. There are traders who have their own definition of penny stocks.
Some consider these “only OTC stocks” where others say that penny stocks are ones trading under $1. However, you define it really doesn’t matter as much as making money with them in my opinion. The lower the price, the smaller the move needs to be in order to equate to percentage change.
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Based on that reasoning, penny stocks tend to be highly volatile. When you’re talking about stocks under $1, that volatility compounds even more. Take, for instance, a $1 and a $4 stock. Both are considered penny stocks, however, the $1 stock only needs to move up 10 cents in order to return a 10% gain. The $4 penny stock has to move up 4 times than in order to record the same increase.
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Outside of a stock’s price, you’ve also got to consider its share structure. Are there many shares outstanding? Is there a small or large float? Has the company in question conducted any recent financings with discounted stock? These are just a few questions to have answers for when it comes to finding penny stocks to buy. Since the goal is obviously to make money with penny stocks, price should play a role but it shouldn’t be the only factor.
You should also have a trading strategy in place. It might involve scaling into and out of different trades by “tiering into” a trade. When it comes to trading penny stocks, this strategy allows traders to avoid large losses early while staying in winning trades longer. Unfortunately, most new traders think that buying an entire position all at once is the best method – Click For More Information On Tiered Trading Strategies
But whatever your strategy is, just make sure it’s well-suited for volatile price action. A low float $4 penny stock might move up quicker than a $1 penny stock with more than 500 million shares outstanding and a large float to pair with it. With this in mind, here’s a short list of penny stocks that can be bought for under $4 right now. Will they be on your list this week?
Penny Stocks To Watch This Week: Acasti Pharma Inc.
Acasti Pharma Inc. (ACST Stock Report) is another one of the penny stocks that has been on the radar for a bit. We went and took another look at it last Friday as volume began surging into the end of the week. This came after the company’s latest announcement.
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Acasti reported that it has completed its revisions to the pre-specified Statistical Analysis Plan for the TRILOGY 2 Phase 3 trial of CaPre, and has filed it with the FDA. This came after analysis of its TRILOGY 1 data revealed a rapid, significant and sustained reduction in Triglyceride (TG) Normalization levels between screening (during qualification) and the time of patient randomization (prior to patients starting on either drug or placebo). Acasti refers to this as “Pre-randomization TG Normalization.”
Acasti also announced it plans to host a conference call on or about August 31, 2020 to discuss the TRILOGY 2 top line results. The company said it will also provide an update on the timing for the reporting of the secondary and exploratory endpoints, and the pooled results from both TRILOGY studies. Will last week’s momentum carry through into the first week of August?
Penny Stocks To Watch This Week: XpresSpa Group Inc.
XpresSpa Group Inc. (XSPA Stock Report) has been one of those “love/hate” penny stocks for traders this year. Overall XSPA stock is up but a big spike earlier in June left a lot of bag holders in its wake. When we first started following this company closely, XpresSpa was having “high-level talks” to get in on the coronavirus craze. Best known for its in-airport micro-spas, XpresSpa aimed to diversify into a COVID-19 testing facility. But as things got more serious, the market eventually started paying more attention.
Following confirmation that XspresSpa locations were making the transition, momentum continued in the stock. XpresCheck has begun a pilot program at New York’s John F. Kennedy International Airport Terminal 4. Earlier this month, XpresSpa’s CEO was interviewed on Fox Business discussing the rollout of numerous COVID testing facilities ahead of fall. He also said that tests will be available for passengers in the coming weeks. Currently, they are available for frontline workers.
Something to note, however, is that the company has filed for a $200 million mixed shelf offering. This allows the company to issue shares “from time to time”. Furthermore, the proposed maximum initial offering price per unit will be determined by the registrant in connection with the issuance by the registrant of the securities registered.
That means it’s based on the specifics of each subsequent sale in connection with the offering. Considering last week’s momentum there are a few things to point out. First, could that continue into August, and second how big will potential dilution play a role if/when the company taps into the mixed shelf offering?
Penny Stocks To Watch This Week: Huttig Building Products Inc.
Finally, Huttig Building Products Inc. (HBP Stock Report) has gotten some attention recently. It hasn’t been a company we’ve discussed previously. I think that’s simply due to the fact that HBP stock hasn’t really traded actively up until recently. Over the last 5 sessions, its market saw the 3-highest share volume days of the year. Friday’s was the largest by far.
Huttig Building Products is involved in the wholesale distribution of specialty building products and millwork for light commercial, residential construction, and remodeling. According to Dodge Data & Analytics, “total construction starts increased 6% in June to a seasonally adjusted annual rate of $641.4 billion.” Furthermore the analytics company said, “This marks the second consecutive monthly gain in construction starts following the COVID-19 induced declines in March and April.”
Why could could this be one of the penny stocks to watch this week? Huttig’s set to report earnings on August 3rd. This could also pose a risky scenario for traders. If Huttig comes out with strong results, then the market could pop. Negative results could trigger the opposite.
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While the company hasn’t been very active in its news flow. the last earnings update shed a bit of light on its gameplan for 2020. Jon Vrabely, Huttig’s President and Chief Executive Officer said in its Q1 update, “While we believe we were ahead of the curve in developing and executing the earliest versions of our (COVID-19) response plan, and have continued to make meaningful progress, we anticipate the impact from this pandemic will be significant in the second quarter and thereafter as we continue working hard to mitigate its effect on our business.”
