Will These 3 Penny Stocks Make New August Highs This Week
Penny stocks weathered the storm on Monday as broader markets pulled back. Major tech stocks like Apple, Amazon, Square, Netflix, Twitter, you name it, most slipped in early trading. If you’ve been reading the news recently, you know that the tech sector has become a driving force to the stock market’s bullishness. The markets aggressively pulled back on Monday from previous all-time highs on Friday.
Some analysts think that the majority of top stocks are overextended right now. The last time that was the case, we saw a larger flight to small-cap stocks. Chris Harvey, Wells Fargo Securities head of equity strategy, told CNBC that short interest ticking up from low levels could indicate stock market sell-offs. “It’s not a catalyst by itself, but it’s a concern, and it’s a concern as we see the market melting up,” he said.
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While traders should have some diversity to their trading, penny stocks continue to offer continuous volatility. This is what traders have come to know and love this year. In fact, even as the S&P and Nasdaq pull back, some penny stocks are making new milestone highs. Take, Seres Therapeutics (MCRB Stock Report), for instance. This was just a penny stock on Friday and it averaged around 1 million shares traded per day on average over the last 30 days.
Monday, the company reported positive top-line results in a Phase 3 trial and the rest is history. MCRB stock jumped to highs of $33 on Monday morning, trading more than 50 million shares before the lunch hour. It’s this type of move that always brings attention back to stocks under $5. Keeping this in mind, will any of the following join your list of penny stocks to buy right now, or are you avoiding at all costs?
Penny Stocks To Buy [or avoid]: Lipocine Inc.
Lipocine Inc. (LPCN Stock Report) is one of the penny stocks we’ve watched for some time now. This year we began picking up on its developments during the middle of the first quarter. This was when the FDA indicated Lipocine’s approach to addressing the single remaining deficiency through the reanalysis of existing data in accordance with FDA feedback appeared to be a reasonable path forward. If you look back in 2019, you’ll see that LPCN stock fell from nearly $3 to under $0.40 after missing 3 secondary enpoints on its TLANDO testosterone treatment.
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After receiving this “reasonable path forward,” the FDA requested that the information generated by the reanalysis be submitted as part of an NDA resubmission. The NDA incorporates the reanalysis of existing data based on written feedback to address the single remaining deficiency discussed in the Post Action Meeting with the FDA. What’s more, is that it also came with a six-month Prescription Drug User Fee Act (PDUFA) clock. That PDUFA goal date is this month on August 28, 2020. Whether or not this uptrend is a “buy the rumor, sell the news” scenario is to be seen.
However, it’s clear that the market has gotten behind LPCN stock since the middle of Q2. During that time, shares have rallied from around $0.50 to over $2 this week so far. Something else that is now accounted for are the company’s earnings that were reported last week. So, looking ahead, it would seem that the PDUFA date is of the utmost importance currently. Are new highs in order this month or has LPCN stock reached its peek?
Penny Stocks To Buy [or avoid]: T2 Biosystems
T2 Biosystems (TTOO Stock Report) is another one of the penny stocks on watch for months now. Since hitting 52-week lows of $0.24 in March, TTOO stock has been on the move. At the start of the third quarter, shares hit a new 2020 high of $2.31 and after consolidating briefly, the penny stock has been working back toward those levels. This week, TTOO stock has reached its highest level since July 1st, coming within pennies of the $2 mark before the lunch hour on August 10th.
This could be one of the riskier names to watch right now. The main reason being is that the company is expected to release Q2 earnings on Tuesday. T2 Biosystems EPS is expected come in around ($0.15), according to analysts. Sales are expected to come in near $2.37 million. T2 Biosystems EPS in the same period a year ago totaled ($0.35). Revenue was $1.80 million.
Aside from this update, T2 was in the news last week after pulling its proposal for a reverse stock split. Also, once earnings are reported, there is another date to take into consideration this month. T2 will participate in an industry conference on August 13th. Since this is “the eve” of earnings, do you think the company will miss, meet, or exceed expectations for the quarter?
Penny Stocks To Buy [or avoid]: Conduent Inc.
Earlier this month we discussed Conduent Inc. (CNDT Stock Report) following one of its most active trading days in recent history. Furthermore, it was ahead of its quarterly results, which now we know blew away expectations. Not only did the company beat on EPS and sales but both came in well-above estimates.
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For the quarter, Conduent reported a positive EPS of $0.12, which beat expectations of a $0.05 EPS loss. Furthermore, its $1.02 billion in sales overshadowed Wall Street’s estimate of $923.25 million. The total contract value of signings came in at $623M, which was up 90% year-over-year and 92% quarter-over-quarter.
In addition to earnings, last week, Conduent reported that its Conduent Transportation unit implemented phase 1 of its fare collection system across the De Lijn public transportations network in Belgium. This enabled De Lijn to launch contactless payment on public transports. Considering the surge of interest building around CNDT stock since these updates, it was worth taking a closer look. Over the last week, shares of the company climbed from $2.25 on August 6th to highs this week of $4.74 so far.
No new updates have come out so far. However, sentiment remains positive in the stock market today. Something else to keep in mind is what Brian Webb-Walsh, the company’s CFO said in the earnings release: “Given current trends, we anticipate Q3 2020 revenue to be $960 million to $1.01 billion and an Adjusted EBITDA margin of between 10.0% and 11.5% in Q3 2020.”
