Should These Be On Your List Of Penny Stocks To Buy Now Or Is It Time To Sell?
Penny stocks have attracted traders for most of this year. We’ve come to find that there’ve been plenty of companies falling victim to the coronavirus sell-off. Inadvertently, this turned higher-priced stocks into penny stocks in a matter of months.
But that wasn’t necessarily a bad thing. The stigma around stocks under $5 was that these companies aren’t worth the time or risk. However, as millions of new traders came to find this year, there’s plenty of money to be made with penny stocks. It just comes down to handing risk and knowing that no one goes broke taking a profit.
When it came to platforms like Think or Swim, WeBull, and even Robinhood, penny stocks took a broader focus. New traders looking to dip their toes into the market searched for cheap stocks as opposed to “value stocks”. We even saw a surge in bankrupt companies just because their shares traded at such low levels.
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Many of these same traders learned the hard way that just because stocks are inexpensive, it didn’t mean they were cheap. Those same bankruptcy penny stocks saw only fleeting gains before continuing lower. Anyone holding on for the “long haul” found out quickly that penny stocks are inherently volatile. With this in mind, here’s a list of stocks trading higher this quarter. As we head into the back half of the third quarter, these could be some of the top penny stocks to watch after recent breakouts
Penny Stocks Under $5 To Watch: Pacific Ethanol Inc.
Pacific Ethanol Inc. (PEIX Stock Report) has been one of the top penny stocks to watch this year. We first began following this company back in December of 2019 believe it or not. At the time PEIX stock traded around $0.60 and the company had just managed to get an extension on a loan from its lenders. Moving into 2020, PEIX dipped with the rest of the market in March and has since been on a massive uptrend.
Not only is it up 1,895% since March lows, the 3rd quarter saw shares rally as high as $5.33. Additionally, just look at how big of a quarter alone, the 3rd quarter was. On July 1st, PEIX stock was trading around $0.71 and as of this week’s initial high of $4.46, the penny stock has climbed nearly 530% to date.
The company produces renewable fuels. It owns and operates several ethanol production facilities distributed across the Western and Midwestern United States. Last month the company reported its quarterly results. These helped continue fueling this year’s big move. Pacific Ethanol reported better than expected results for the quarter beating on both EPS and Sales.
Specifically, EPS blew away estimates. Wall Street anticipated an EPS loss of $0.20 but Pacific came in with an EPS gain of $0.27. Adjusted EBITDA also experienced a strong increase. Compared to the same quarter last year – $7.2 million – Q2 2020 saw this figure come in at $28.8 million.
Penny Stocks Under $5 To Watch: TRACON Pharmaceuticals Inc.
Unlike Pacific Ethanol, TRACON Pharmaceuticals Inc. (TCON Stock Report) has been relatively flat for a few months. After recovering slightly from its March lows, TCON stock has maintained a channel between $1.75 and $2.45 on average. While this isn’t anything to ignore, TCON has had a hard time establishing a clear uptrend. At the beginning of August, TRACON released its Q2 earnings. The company beat on EPS with a loss of $0.70 compared to $0.73 estimates. However, there was a bigger story to focus on. That was management’s discussion on recent progress in the quarter.
Specifically, the company filed a pivotal ENVASARC protocol with the U.S. FDA as part of an Investigational New Drug application. The application cross-referenced the open envafolimab IND maintained by TRACON’s corporate partners 3D Medicines and Alphamab Oncology. Later in the month, TRACON announced the clearance of the ENVASARC protocol. Envafolimab is currently dosing in a Phase 2 registration trial as a single agent in MSI-H/dMMR advanced solid tumor patients. It’s also a Phase 3 registration trial in combination with gemcitabine and oxaliplatin in advanced biliary tract cancer patients in China.
Most recently, TRACON has been raising money to conduct the ENVASARC pivotal study. So what’s happened recently to get the market excited? A recent 13D filing shows Opaleye Management Inc. holds a stake of more than 13% in TRACON. This triggered a move in TCON stock of more than 14% by mid-morning on Tuesday. After raising funds for its pivotal study and attracting institutional investors like this, is TCON on the list of penny stocks to watch this month?
Penny Stocks Under $5 To Watch: Aytu Bioscience Inc.
Earlier this year, Aytu Bioscience Inc. (AYTU Stock Report) was a top coronavirus penny stock to watch. Shares broke out from $0.34 to highs of $2.99. While that was a huge move for the stock, after the dust settled, so did AYTU stock. Over the last few months, there’ve been a few big spikes here and there but nothing that really showed followthrough with the stock. In August, AYTU stock experienced a slide lower. However, at the beginning of September, the coronavirus penny stock has turned around a bit.
Monday saw AYTU stock reach a low of $1.03 and 1 day later, shares bounced back to highs of $1.13. There haven’t been any new headlines since August 19th and the last filing was a FORM 4 posted on the 17th. The company announced its partnership with Apollo Med Innovations and Olympus Health and Performance to launch a nationwide mobile COVID-19 testing initiative for companies.
Apollo/Olympus combined their network of medical professionals from Apollo with the back-office systems and billing platform of Olympus. Aytu provided its licensed COVID-19 IgG/IgM antibody tests to offer companies the option of COVID-19 testing at their location. While it’s still early to call this a rebound, it is the first day that AYTU stock has turned green in over 2 weeks. Something to note if it’s on your list of penny stocks to watch right now.
Penny Stocks Under $5 To Watch: Aemetis Inc.
This one could be a coin-toss moving forward, at least for this week. Aemetis Inc. (AMTX Stock Report) is no stranger to big moves in the market. We’ve covered it since early May. That was when Aemetis started delivering carbon dioxide under a supply deal with New Messer CO2 Plant. This quarter, AMTX stock has made significant progress in the stock market.
In fact, a few weeks ago, AMTX reached fresh, 52-week highs of $3.47 ahead of its quarterly results. The penny stock slipped after the report was released, however. Though Aemetis beat EPS estimates by a wide margin, it missed on sales. Q2 EPS came in at a gain of $0.10, which beat estimates of an EPS loss of $0.31. Sales estimates were $48.70m and Aemetis missed slightly after reporting $47.82m for the quarter. Adding to the selling pressure, Aemetis filed a $100 million shelf registration.
The start of September has seen an abrupt turnaround compared to the last few weeks, however. On Tuesday, Aemetis announced receipt of a National Drug Code from the FDA for production and marketing of Over The Counter sanitizer products. I don’t think I need to explain the appeal of headlines like this considering the world’s still dealing with COVID-19.
In any case, AMTX stock took off on September 1st, moving over 48% during the morning session. The coin-toss comes into play as to whether or not this move can sustain itself or if a pull-back is due. Regardless, AMTX is up over 217% quarter-to-date so far.
Penny Stocks Under $5 To Watch: GEE Group Inc.
GEE Group Inc. (JOB Stock Report) has made a huge move in the third quarter this year. The company provides specialized staffing solutions in the US. Shares of JOB stock jumped from $0.55 on July 1 to quarterly highs of nearly $2.50. The move came after the company reported that it eliminated $47 million in debt from its books. But let’s look at the specifics of this elimination of debt.
The company said it paid approximately $5.1 million in cash and issued about 1.8 million of GEE restricted common shares. This is how it was able to “eliminate” the debt, which comprised approximately $19.7 million of subordinated debt and about $27.7 million of preferred stock mezzanine financing.
Needless to say, after things settled down, JOB stock appears to have used the 50 Day Moving Average as a trend line in Q3. While we didn’t pick up on this company at the time, We did start following along a few weeks ago after GEE reported their quarterly results. Revenue for the quarter was approximately $26.6 million. Contract staffing services contributed approximately $23.5 million or approximately 88% of revenue and direct hire placement services contributed approximately $3.1 million or approximately 12% of revenue.
If you look at the chart, aside from the noticeable spike on July 2nd, the general trend in JOB stock has been bullish. The start of September has seen a continuation in this trend as it moved higher along its 50DMA. Will this remain that way moving forward into the end of Q3? So far, quarter-to-date, JOB stock is up over 130% as of Tuesday’s $1.27 high.