Do You Agree With Analysts’ Ratings On These Penny Stocks?
Do you need penny stocks to have good analysts rating in order to buy them? While some rely on them when it comes to investing, the day-to-day trends usually aren’t reflective of analyst opinions. What I mean by this is that analysts aren’t constantly updating their ratings.
They usually set their outlook based on a certain timeframe that is typically much longer than just a few days. In the time it took you to find out ratings for a certain stock were bearish, that same stock could have broken out 100% or more. Similarly, for the favorable ratings, those stocks might have experienced huge sell-offs in the short term.
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This is important to understand especially if you’re new. I think too many traders place too much weight on analysts and not enough reliance on their own diligence. That isn’t to say you shouldn’t include analyst info in your general research.
But it is to say that it should be exactly that, just a piece of your research strategy. With this in mind, we’re taking a look at some trending penny stocks today. Analysts have given varying opinions. Do you agree or disagree? Let us know in the comments section.
Penny Stocks To Buy [according to analysts]: ElectraMeccanica Vehicles Corp.
ElectraMeccanica Vehicles Corp. (SOLO Stock Forecast) is one of the electric vehicle stocks we’ve watched since June. We saw it rip to highs of $6 and dip to lows of $2.50 during that period. The initial move was triggered by rumors that ended up getting denied as true by the company. Needless to say, after that was cleared up, attention focused on the company’s next steps. As an emerging electric vehicle company, SOLO stock was wrapped into the hype around NKLA, TSLA, and other electric vehicle stocks.
Specific to ElectraMeccanica, its SOLO electric vehicle is a small-format, 3-wheel car. The company has been searching for a home for manufacturing its vehicles and expanding its footprint.August 26th was the official production date for its SOLO vehicle. Furthermore, distribution will begin in three locations where ElectraMeccanica has an existing retail presence. This includes Southern California, Scottsdale, AZ and Portland, OR. Additional deliveries will be made to key markets along the West Coast as the company continues to expand.
While there hasn’t been any new corporate developments, ElectraMeccanica is now on the conference circuit. This month, the company will present at several investor conferences during the first half of September. In addition to the exposure, will the EV trend also act as an additional catalyst? Among analysts covering SOLO stock, the average rating is a “Buy”.
Penny Stocks To Buy [according to analysts]: TRACON Pharmaceuticals Inc.
TRACON Pharmaceuticals Inc. (TCON Stock Forecast) was one of the penny stocks we discussed earlier this week. At the end of August, analysts at H.C. Wainwright issued a Buy rating on the penny stocks. The firm also gave TCON stock a $4 price target. Let’s take a closer look at why analysts might be bullish right now. While next week is when the company is set to present at the Wells Fargo Conference, there’s been much more going on, leading up to that presentation.
Last month, TRACON released its Q2 results. The company beat on EPS with a loss of $0.70 compared to $0.73 estimates. However, the bigger story was on what management had to say. In particular, TRACON 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. TRACON just raised more money to conduct the ENVASARC pivotal study as well.
Aside from H.C. Wainwright, other firms are taking a different kind of interest in TCON stock. A recent 13D filing shows Opaleye Management Inc. holds a stake of more than 13% in TRACON. This has helped build some extra excitement around TCON stock this week.
Penny Stocks To Hold [according to analysts]: Genworth Holdings Inc.
This week we talked about Genworth Holdings, Inc. (GNW Stock Forecast) after some rumors emerged about the company at the end of August. Specifically, these rumors focused on the potential merger deal that Genworth had previously announced this year. To get you up to speed, in June, the company and China Oceanwide Holdings Group Co., Ltd. extended a merger deadline to no later than September 30, 2020. This week the rumors suggested that a deal was done. However, more clarity came out on that later on in the week.
Monday night, Genworth confirmed that its Board of Directors and management team determined that Oceanwide has provided satisfactory information regarding its funding plan. Genworth further said that it doesn’t intend to exercise its right to terminate the merger agreement as of August 31, 2020. The proposed purchase price of the deal is at $5.43 per share, which may include debt funding of up to $1.8 billion.
“Based on these discussions and the information provided by Oceanwide, we believe the funding is progressing well and that Oceanwide is working to close the transaction by September 30, 2020,” said James Riepe, non-executive chairman of the Genworth Board.
BTIG Research is the most recent firm to rate GNW stock. The firm reiterated a Hold on the stock. As I said above, since this rating was issued in July, it might’ve not taken the potential for these events to actually happen, into consideration. Needless to say, GNW stock is up over 40% since August 28th.
Penny Stocks To Sell [according to analysts]: Garrett Motion Inc.
Garrett Motion Inc. (GTX Stock Forecast) is the classic “new penny stock”. I say this because prior to the last week, GTX stock was trading above $6 a share. The company focuses on different technologies for vehicles. This includes things like powertrain, electric boosting, and auto software. While things like electric vehicle stocks have been surging recently, the auto parts segment has taken a back seat. But that’s not the catalyst behind the penny stock’s recent drop. In late August, Garrett announced that it was “exploring alternatives for balance sheet restructuring.”
It’s no secret that coronavirus has put pressure on certain companies. Garrett’s case stems from continued efforts to gain leverage and stay opperational during the pandemic started coming to a head. In its August 26th update, the company said, “Garrett has not yet determined whether to pursue any balance sheet restructuring alternatives. However, any actions taken by Garrett in relation to liability management may materially reduce the value or trading price of our common stock…There can be no assurance that recoveries in any restructuring will approximate current trading prices of Garrett’s securities.”
However, Thursday saw a strong rebound in GTX stock so that’s something to keep in mind. As far as analysts are concerned, the most recent rating came from Barclays. It gave an Equal Weight Rating on the penny stock and actually boosted its target price from $5 to $7.