Will These Penny Stocks Be On Your List To Buy Or Avoid This Week?
Are penny stocks part of your trading strategy right now? If you’re like millions of others using apps like WeBull, E-Trade Pro, or even Robinhood, penny stocks are probably an interest. Sure you can invest in blue-chip stocks like Apple or Tesla. Since they’re both set for stock splits, you might have a few shares in a month. Think about the amount of money it takes to buy 1 share of Tesla, pre-split, right now. For that same amount, you could buy thousands of shares of certain penny stocks.
Are they risky? Generally speaking, penny stocks are higher risk than large-cap, well-established companies. Then again, we did see some of these “well-established” companies drop hugely this year. Some of them won’t recover either. The bottom line is that stocks under $5 allow traders to leverage smaller sums of money to realize larger returns. Not only that, but there have been plenty of cases where certain stocks end up becoming successful companies. Again, this year we saw many instances of this happen. In fact, there’ve been penny stocks that now are highly regarded in certain industries.
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Take Novavax (NVAX Stock Report), for instance. This company’s stock traded under $5 earlier this year. Coronavirus comes into the picture and Novavax shifts focus to a potential vaccine. A few months later, it’s getting big government attention, money, and trades above $130 a share. Not all penny stocks experience such success. But even on a smaller scale, the potential to see 50% or more in a short timeframe isn’t unrealistic. It all starts with a watch list in my opinion. Heading into this week, will these be on your list of penny stocks to buy or avoid?
Penny Stocks To Buy [or avoid] #1: Oasis Petroleum Inc. (NASDAQ: OAS)
Closing Price 8/21: $0.603
Market Cap: $193.55M
Oasis Petroleum Inc. (OAS Stock Report) is one of the oil and gas penny stocks feeling the burn recently. Over the last few weeks, shares have slid from over $0.90 to lows of $0.60. Friday afternoon, the penny stock reached its lowest price since August 3rd. However, oil and gas penny stocks remain a hot topic and OAS is among the names discussed. So will this be on the list of penny stocks to buy or avoid this week? Let’s take a closer look
OAS stock saw a strong jump earlier this month. It came after the company posted a surprise earnings beat for its second quarter results. Mainly, Oasis posted a surprise adjusted Q2 profit even though revenues dropped 69% year-over-year to $166M. This saw the company beat estimates on earnings per share, but missed estimates on revenues. As far as the future goes for Oasis, statements from the August business update seem optimistic. The company’s expecting to see increasing volumes of oil production through the end of the year. The 3rd and 4th quarter oil volumes are expected to approximate 40-42 MBopd, which is roughly 13% above 2nd quarter levels based on current market conditions.
On a technical front, OAS stock appears to have reached a pivot on its chart. The last time it traded around $0.60, it ended up bouncing into earnings. This has also been a level that acted as previous support or resistance during the last few months. This past Friday, shares of OAS stock also pulled an about-face just after the closing bell. Shares popped back above $0.63. Will that momentum continue into this week?
Penny Stocks To Buy [or avoid] #2: Boxlight Corporation (NASDAQ: BOXL)
Closing Price 8/21: $1.84
Market Cap: $92.22M
Boxlight Corporation (BOXL Stock Report) is another one of the penny stocks gaining attention recently. Last month, shares took off amid speculative optimism surrounding online education and entertainment stocks. Boxlight provides technology solutions for the global education market so it made sense that BOXL stock was gaining some attention.
During the period between July 8th and July 16th, the penny stock skyrocketed from $0.89 to highs of $4.65. Then momentum hit a wall after the company announced a $150 million shelf registration. That appeared to have cracked the trend and as you can see, BOXL stock has slid ever since. There’ve been a few rebounds here and there. They came with updates like Boxlight’s deal with Samsung recently. The company also announced a strategic partnership with CareHawk. They are an enterprise communications solutions company working with schools and campuses.
Will BOXL join a list of penny stocks to buy or avoid this week? That’s the question right now. Similar to OAS, BOXL saw a rebound after the closing bell on Friday. Shares closed at $1.84 during the regular session. After-hours, the penny stock climbed to highs of $1.90.
Penny Stocks To Buy [or avoid] #3: Brickell Biotech, Inc. (NASDAQ: BBI)
Closing Price 8/21: $0.83
Market Cap: $23.06M
Brickell Biotech, Inc. (BBI Stock Report) saw a bit of above-average trading volume late last week. Since the start of August, BBI stock hasn’t traded more than 854,000 shares in a single session. August 21st saw the penny stock trade more than 1.5 million shares. There weren’t any updates and the only filing that came out was a Nasdaq non-compliance statement since BBI stock doesn’t meet the minimum bid requirement set by Nasdaq. However, similar to both BOXL and OAS, BBI shares continued higher after the closing bell. We’ll have to see if this momentum continues into next week or if BBI remains in the sideways trend it’s been in for most of the month.
A few weeks ago the company reported earnings and management’s outlook may be something to look at. Brickell Biotech focuses on treatments for skin diseases. Earlier this year, Brickell reported several milestones. The company successfully completed a U.S. Phase 3 long-term safety study and reported positive Phase 3 pivotal study results in Japan for sofpironium bromide. This is initially a pipeline treatment dealing with sweat. Results were presented in June by Brickell’s Japanese development partner, Kaken Pharmaceutical Co., Ltd.
So what is something to look at right now? According to the company, all of these achievements set it up for the plan for the 4th quarter. The plan is to initiate the U.S. Phase 3 pivotal program for sofpironium bromide gel, 15% in the fourth quarter of 2020. The company also expects Kaken to receive a regulatory decision for sofpironium bromide gel, 5% in Japan next quarter too. Considering Friday’s trading action, will BBI join a list of penny stocks to buy or avoid at the start of this week?
Penny Stocks To Buy [or avoid] #4: Color Star Technology Co. Ltd. (NASDAQ: HHT)
Closing Price 8/21: $0.74
Market Cap: $21.31M
Color Star Technology Co. Ltd. (HHT Stock Report) has been put in the same category as BOXL. The company focuses on eLearning and virtual entertainment. The company also offers after-school entertainment tutoring in New York via its joint venture entity Baytao LLC.
HHT stock was on the watch list at the end of the week last week as well. The company announced that the upcoming press conference of its Color World APP is set for September 2nd. This is ColorStar’s online entertainment learning platform. According to the company, the platform has begun to establish a collection of celebrity tutors and materials. These tutors teach entertainment courses in different fields. There’s also an upcoming concert, “Color World” set for September 9th. The online concert has gained more attention as Color Star continues adding more talent. Names like Machine Gun Kelly, Wiz Khalifa, and others are set to take the virtual stage early next month.
HHT has experienced a similar trend compared to BOXL. There was a surge last month, then a slide in August. Heading into next week, however, HHT is coming off of its first green day since August 4th. Does this mark the turnaround for the penny stock or just a pit stop before sliding further?