Are You Buying Or Investing In Penny Stocks
Investing in penny stocks can be a risky game. When you really think about it, why do you invest, to begin with? Building wealth, assets, etc. Call it what you will but at the end of the day it boils down to 1 thing: money. Investing, trading, scalping; these all have their places in the grand scheme of things.
But when you think about investing in penny stocks, you’re likely referring to the longer-term holding time. This will involve some different means of analysis. Where day traders and scalpers tend to rely heavily on charts and technicals, investors and swing traders employ a different approach.
It will likely involve more of a fundamental stance on the company. Upcoming earnings, upcoming trials, read-outs, analyst updates, etc. These are all fundamental topics that can impact certain penny stocks over the long term. However, since these are stocks under $5, we can’t ignore the volatility factor.
You can buy shares of Apple and “sit” on them for years. It would take a huge event to trigger a drop of 20% or more. This year, we saw that “huge event” in March when coronavirus came about.
Aside from that, however, the typical ebb and flow of blue-chip stocks see fluctuations of 1-5% regularly, in a short period of time. Now, when you talk about penny stocks, these can see drops and pops of 20% or more within minutes, let alone days. So if you’re looking to invest in penny stocks, you’re dealing with a high-risk situation in a set of stocks that usually requires a lot more attention. In any case, how you trade or invest is up to you.
Penny Stocks To Watch: Brickell Biotech Inc.
The third quarter of 2020 has been relatively uneventful for Brickell Biotech Inc. (BBI Stock Report) as far as the market’s concerned. On July 1, BBI stock opened at $1 and today shares reached a high of $0.97. Throughout the course of this period, Brickell slowly dipped but held relative support around $0.80. This week, BBI stock has taken a bit of a brighter spotlight. We discussed it over the weekend citing a few potential catalysts that could be in play, namely what was said in its earnings update.
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. 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 week, Brickell caught the attention of the analyst community. First, Oppenheimer initiated coverage on Brickell Biotech with an Outperform rating. It also gave BBI stock a $5 price target. Later this week, Lake Street also started coverage on the company. The firm gave Brickell a Buy rating along with a $6 price target. Even with this as the case, is BBI stock set to continue this trend into September?
Penny Stocks To Watch: Sphere 3D Corp.
Sphere 3D Corp. (ANY Stock Report) had an epic year so far. If you consider the fact ANY stock traded under $1 at the start of the year, it’s more than 100% higher as of Friday. But if you look at what’s happened between then and now, you’ll see something even bigger. Shares have traded as high as $5.55 but over the last month, selling pressure took ANY stock down as low as $1.68. On Friday, however, Sphere 3D pulled a noticeable turnaround in the market.
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This came after the company’s latest update. Specifically, after the close on Thursday, Sphere 3D announced that it would present at the LD Micro “LD 500” conference next week. But there was more to this. Sphere will jointly present with Rainmaker Worldwide (RAKR Stock Report). In July, Sphere 3D and Rainmaker announced their intended merger, after which the combined entity would develop the Water-as-a-Service business being pursued by Rainmaker. Sphere 3D proposed incoming Chairman Aris Kekedjian will present the strategic plan for the combined company post-merger.
Rainmaker supplies water to customers using two categories of its proprietary and novel technology: Air-to-Water, which harvests fresh water from airborne humidity; and Water-to-Water, which transforms seawater or polluted water into drinking water. While shares of Rainmaker didn’t move much at all, ANY stock jumped over 30% before the closing bell.
Penny Stocks To Watch: Fortress Biotech
Another one of the biotech penny stocks taking flight on Friday was Fortress Biotech (FBIO Stock Report). Unlike ANY, FBIO stock continued its 5-month rally that started in March. Since that time, Fortress stock has climbed from around $1 to highs this week of $4.02. This biopharmaceutical company has five marketed prescription pharmaceutical products and over 25 programs in development.
We first started covering FBIO stock back in May when Fortress announced its partner, Oncogenuity, Inc., entered into an exclusive worldwide licensing agreement with Columbia University. The plan was to develop novel oligonucleotides for the treatment of genetically driven cancers. That was when FBIO was still trading around $2. Jump forward a few months and 100% and Fortress continues seeing strong momentum in the market.
This week, Fortress came out with another big update involving another partner, Cyprium Therapeutics. They reported positive topline clinical efficacy results for CUTX-101. This is a potential treatment for Menkes disease. “These positive topline clinical efficacy data highlight the potential of CUTX-101 as an effective therapy for Menkes disease patients. With no currently approved U.S. Food and Drug Administration treatments, Menkes disease is a serious condition with a significant unmet medical need. We look forward to presenting these topline data to the FDA at our upcoming pre-new drug application meeting and will begin our rolling submission of a New Drug Application for CUTX-101 in the fourth quarter of this year,” said Lung S. Yam, M.D., Ph.D., President and Chief Executive Officer of Cyprium.
The company also secured a $60 million loan with Oaktree Capital Management. The biopharmaceutical firm plans to use the proceeds to refinance its existing debt, it said. Considering that Friday’s $4.02 high is its new 52-week high, is FBIO set to continue higher or is there a correction in store?