3 Penny Stocks To Watch Today
Should you only look for stocks under $1? Depending on your risk tolerance, the cheaper the penny stock, the more likely you’ll face higher volatility in the market. But if you’re after quick gains, then you might be ready to look into some of these penny stocks under $1. Understand that these cheap stocks aren’t for the faint of heart.
Then, when you start getting into things like penny stocks under 10 cents, that volatility begins compounding even greater. It comes down to simple math, right? That 90 cent penny stock drops 5 cents and it’s not a terribly huge knock to your position. But if that 10 cent stock drops 5 cents, then you’re facing a 50% haircut. Regardless, I’m going to assume you know the higher risks involved with cheap stocks.
In the stock market today, however, you can’t just focus on price alone. While everyone want’s “a deal,” cheap stocks aren’t always inexpensive. They’re also not always going to break out as quickly as you might think. So if you’re looking at certain stocks under 10 cents, for instance, make sure that there’s a consistent volume in the market.
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Low-liquidity penny stocks are notorious for trapping traders in worthless positions for months. This is to say that not all penny stocks under $1 are worth the risk. Each trade commands its own strategy. With this in mind, let’s take a look at a few of these lower-priced penny stocks and you can decide if the risk is worth the reward.
Penny Stocks Under $1 To Watch: Cinedigm Corporation
Cinedigm Corporation (CIDM Stock Report) was a huge winner for traders earlier this year. That company announced network expansion news in May, which triggered a 1-day breakout. The move was fleeting as the company paired that news with an $8 million financing.
However, June gave a bit more redemption for traders after one of the biggest announcements Cinedigm had released at that time. The company announced that the Bob Ross channel would be launched on Roku. Right on the heels of this, Cinedigm inked a partnership with Vewd, the world’s largest Smart TV OTT software provider. Yet again, however, CIDM stock couldn’t hold those gains for long and it’s been a slow-drip lower ever since.
This week, things are a bit different and once again it comes after some recent news. On Friday, Cinedigm announced an agreement to convert an aggregate of $15 million in convertible note debt to common equity at $1.50 per share. “This conversion of $15 million in debt to equity significantly strengthens our balance sheet and greatly reduces our annual interest expense,” said Chris McGurk, Cinedigm Chairman and CEO. “This is not only a very strong step forward for us financially, it is also a very positive affirmation of the value of our equity by Bison Global and MingTai Investment LP.”
This move reduces it total debt by $36.1 million or roughly 55% since the end of 2019. Obviously, the largest shareholder converting shares at $1.50 is a considerably higher price than the current retail price. CIDM stock shot up earlier today and appears to continue pressing on during Friday’s mid-day session. Will this finally mark a turnaround for the company’s stock?
Penny Stocks Under $1 To Watch: Sunworks Inc.
Sunworks Inc. (SUNW Stock Report) was another one of the penny stocks under $1 to watch late this week. Similar to Cinedigm, Sunworks stock experienced a stronger move earlier this year. Back in June, we started looking more closely at the company. At the time, Sunworks filed its Proxy Statement to call for a shareholder vote on several topics.
One of these is to approve an amendment allowing the company to reduce its authorized share count (more on that later). Aside from that, SUNW stock was benefiting from a focus on renewable energy stocks. However, in August, we saw the penny stock hit a wall. That came after the company reported that it entered into an acquisition deal with The Peck Company, a solar engineering firm. The transaction is expected to close during the fourth quarter of 2020
Since that announcement and since reporting its last earnings update, SUNW has continued to slide. As of this week, SUNW stock is back to June levels. During the last few sessions, however, there has been a bit of a build-up in market activity. Shares have also climbed from lows of $0.5175 on Monday to over $0.70 on Friday. This move came shortly after the results of the company’s shareholder vote. Both items, including a reduction in authorized shares, were approved by a wide margin. Can this latest trend continue into next week?
Penny Stocks Under $1 To Watch: Farmmi Inc.
Farmmi Inc. (FAMI Stock Report) is another one of the penny stocks under $1 experiencing a solid surge of trading action on Friday. There weren’t any headlines and no new filings have come out since the end of August. The company itself focuses on processing and selling various categories of agricultural products. Some of its main products include various kinds of mushrooms. It generates a vast majority of the revenues from the Shiitake mushrooms segment within China.
While September 11th didn’t have news, this week, Farmmi did report a new development. The company’s subsidiary, Farmmi Foot Ltd Co. was certified by the China Standard Conformity Assessment Co. Ltd. This certification effectively confirms that the company is adhering to strict policies to ensure high quality standards. Over the last month, Farmmi has received several orders including one for export to Israel. That followed orders in August for export to North America as well.
Friday, however, we’re noticing irregular volume without any related news catalysts to speak of. Is this just a technical move off of its 50 Day Moving Average or is there more to look for heading into next week. In any case, FAMI stock has been trending along that 50DMA level for weeks and this is the first time it made a meaningful move higher in weeks. That could be something to keep in mind this month.