It’s Friday But That Means Nothing To These Penny Stocks
If you’re looking for penny stocks on the rise, what time frame do you look at? Are you day trading penny stocks, swing trading them, or maybe even investing in penny stocks? All of that matters when it comes time to apply your trading strategy. If you’re a day trader, for instance, then “on the rise” matter more during the opening and closing bells on a single day.
The flip side to this might be someone who’s more of an investor. Aside from fundamental analysis, they’ll look for penny stocks on the rise and ones that have established clear support trends as well. As someone investing in penny stocks, the timeframe for taking profit is much different from a day trader. On top of that, a day trader’s time frame is starkly different from someone scalping penny stocks.
Should You Trade Or Invest In Penny Stocks?
In case you’re unfamiliar with the term, scalping involves trading penny stocks quickly; within minutes at times. Needless to say, August itself has been full of craziness already. The stock market approached new all-time highs. Though it still hasn’t put in those new highs, analysts are speculating on what comes next and if things like coronavirus will play a role.
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This morning, we got more economic data as well; specifically retail numbers. This helps give traders an idea of the overall state of the economy. Albeit the economic outlook hasn’t really impacted the stock market since March. Excluding autos, sales actually beat the consensus, rising 1.9% versus the forecast of 1.2%.
“Similar to the jobs report, retail sales stand in stark contrast to the idea that growth in July ‘stalled’ – when in fact it continued at a robust, if somewhat slower, pace,” Citigroup economist Andrew Hollenhorst said in a note. This hasn’t hurt sentiment in the stock market. Keeping that in mind, let’s take a look at a few penny stocks on the rise in a few different time frames. Will they be on your list next week?
Penny Stocks On The Rise: Party City
Let’s dive right into the retail sector. Party City Holdco (PRTY Stock Report) is one of the “brick and click penny stocks” we’ve followed for a while. Since May, PRTY stock has experienced much higher trading volumes and realized significant price movement compared to where it was in March. In June, Party City reported a Q1 net loss with declining revenue. However, with a surge of bankruptcies and closures resulting from coronavirus shut-downs, Party City also weathered the storm better than some. The company said it had a possible deal that would reduce its debt by 25% and raise $100 million in capital.
In Q2, Party City reported better than expected sales results. That has continued to help fuel the rally in PRTY stock. What’s more important to note is that the company reported an 83% increase in North American eCommerce sales for the quarter. While June comp sales were down 6.5%, July brand coms were positive according to the company.
One of the busiest seasons for PartyCity, of course, is Halloween. Many are speculating on what’s to come especially considering social distancing isn’t likely going anywhere anytime soon. This week the company revealed new trends to help “You Boo You” safely this season. The company also put an emphasis on the fact it’s not just providing products in stores but also online. As we’ve seen, SteinMart is the latest brick and mortar to fall victim to bankruptcy failing to pivot to a brick and click or online only model. As we noted, PartyCity, so far, has been able to adopt this offline and online model to adapt to changing market conditions. Since the start of August, the penny stock has climbed by as much as 72% with Friday’s high of $2.85.
Penny Stocks On The Rise: Town Sport International Holdings Inc.
One of the brick and mortar industries that, unfortunately, doesn’t have many ways of adapting an online model has been gyms. Town Sports International Holdings Inc. (CLUB Stock Report) has gotten smashed this year. Since highs of $3 just as the year began, CLUB stock slid as low as $0.30 with the onset of worldwide lockdowns. Town Sports International owns and operates fitness clubs in the Northeast and Mid-Atlantic regions of the United States. The company, through its subsidiaries, operates fitness clubs. The firm also provides ancillary programs and services such as sports clubs for kids, racquet sports, small group training and studio classes.
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With organizations like Gold’s filing for bankruptcy, it was a similar situation with Town and gyms as it was with Party City and retail stores: a mine field of financial risk. After a brief jump in June, CLUB stock slid right back down around $0.45 in Q2. The unknown future for the company and its shareholders relied on the decisions of state leadership to determine when it was “safe” to return. Town operates brands including New York, Boston, Washington, Philidelphia, and Palm Beach Sports Clubs. It also has Around The Clock Fitness and others under its umbrella.
While there weren’t any company updates recently, there are a few things to note. First, the potential risk side. The company hasn’t reported earnings yet. Considering the gyms have been closed, what are analysts expecting? In the short term, the penny stock might be heading higher. But once it reports earnings, will Town post a surprise or miss estimates?
That’s number 1, number 2 is a high-point and one of speculative optimism in my opinion. On Friday, New York Governor Andrew Cuomo who’s been staunchly criticized for his handling of the pandemic made a statement that has gym stocks in focus. He said the state will release reopening guidelines for gymnasiums on Monday. Can CLUB stock continue surging into next week or is Friday’s spike a short-term event?
Penny Stocks On The Rise: Zosano Pharma Corp.
Like Party City, Zosano Pharma Corp. (ZSAN Stock Report) is one of the penny stocks we’ve followed for some time now. After a quick jump in March, ZSAN stock slid to a low of $0.41. Since then, you can clearly see the penny stock’s trend during Q2 and now Q3. Not only is ZSAN stock up about 75% for the month of August, but shares have also rallied as much as 327% since March’s low.
Leading up to this week, Zosano has come out with a few key developments. Most recently the company signed an agreement with Eversana to commercialize and distribute Qtrypta. That’s if the migraine treatment is approved by the Food and Drug Administration. In March, the FDA accepted Zosano’s new drug application for Qtrypta and has set a Prescription Drug User Fee Act goal date of Oct. 20. Qtrypta is a microneedle patch being developed for the acute treatment of migraine.
The patch was also highlighted for a potential use in COVID-19. That update, like other coronavirus headlines, also acted as a catalyst for ZSAN stock. pecifically, the company posted that “Zosano is eager to rise to the challenge of responding to the COVID crisis by collaborating with vaccine developers to provide the first microneedle vaccine for at home application.”
Also, Zosano pointed out that, “Phase 1 clinical data for influenza vaccine showed that the microneedle coated tri-valent flu vaccine was comparable in immune response to the commercial IM injection.”
Its earnings results showed a much lower loss per share this year compared to last. There’s also the upcoming PDUFA date. In light of these, will ZSAN stock continue to ride this uptrend? That’s a big question market right now in the stock market. The penny stock came within 5 cents of reaching new 2020 highs on Friday.
