Stimulus Talks Spark Optimism for Penny Stocks
Technical analysts play a big role for those trading penny stocks. More often than not, your average day trader might not even know what type of company the stock symbol references. The end goal is to profit from its change in price. While that’s great and should be the goal, day traders aren’t the only ones in the stock market. You’ve also got swing traders and even people investing in penny stocks.
There are obviously different strategies like swing trading that better suit those who are unable to stay in front of their computer every second of the day. However, fair warning, penny stocks are highly volatile so even the strongest trend can reverse at a moment’s notice. If you’re new to these cheap stocks, it’s vitally important to understand the higher risks. You should learn how to trade penny stocks in the first place. In general, higher-risk investments like these types of stocks require attention, no matter what.
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So even if you work a full-time job or need to be away from your trading platform, it’s wise to set stops in place and monitor your trade as closely as you can. Stimulus hopes have fueled the stock market today. As such, we’ve seen plenty of small cap stocks surge during the day. With this in mind, what about this list of penny stocks? Just because they can be purchased at low prices, are they worth the risk?
Penny Stocks To Buy Under $4: India Globalization Capital
India Globalization Capital (IGC Stock Report) caught a nice jolt of momentum this summer. Previously known as one of the marijuana penny stocks to watch, IGC was a big hit in prior years but hadn’t managed to hold any clear trend beyond a few days. This year, however, things appear to be trending a bit differently.
In August, the company said it received regulatory approval to begin a phase 1 human trial from the FDA for its investigational treatment for mild to severe dementia due to Alzheimer’s disease. This actually stems from the company’s acquisition of exclusive rights to a patent filing by the University of South Florida entitled “THC as a Potential Therapeutic Agent for Alzheimer’s Disease.”
While discussions surrounding marijuana decriminalization have spun across newswires, medical cannabis is a bit different. This is especially true when it comes to a clinical setting; not just medicinal marijuana. “Eventually, we expect to evaluate the efficacy of IGC-AD1 on plaques and tangles, the hallmarks of Alzheimer’s disease. We are excited with the progress made and that the FDA will allow the Company to initiate trial testing on human subjects using natural organic cannabis extracts. We believe that this a first human trail of this sort,” said Ram Mukunda, CEO of IGC in that August update.
Since then, there hasn’t been much news from the company. However, trading momentum has built considerably and IGC stock maintains a trend in line with its 50 day moving average.
Penny Stocks To Buy Under $4: Autoweb Inc.
Autoweb Inc. (AUTO Stock Report) is another one of the penny stocks we’ve monitored closely for months. The company offers manufacturers services to help market and sell vehicles direct to consumers. Auto Web has several products in its pipeline that include vehicle lead programs for both new and used cars, as well as WebLeads+ which offers customers coupons for purchasing vehicles. We began following AUTO stock in August after Autoweb reported earnings.
Autoweb also reported its preliminary July results. The company experienced improved results over previous months. Gross margins remained above 35% while also generating positive cash float and adjusted EBITDA. This was for both June and July. “In fact, we drove a higher level of adjusted EBITDA in July than we did for the entire second quarter,” said
“Our improved results over the past several months are further evidence of the strength of our turnaround. Gross margin has continued to hold above 35%, and we generated positive cash flow and adjusted EBITDA in both June and July. In fact, we drove a higher level of adjusted EBITDA in July than we did for the entire second quarter,” said Jared Rowe, President and CEO of AutoWeb.
This week the company announced a deal with QuinStreet Inc. to provide AutoWeb with access to QuinStreet’s online car insurance search capabilities. In light of these developments, AUTO stock remains in a strong uptrend with the 50-day moving average acting as a recent level of support. Will that continue?
Penny Stocks To Buy Under $4: Gevo Inc.
Another one of the penny stocks trending along its 50DMA is Gevo Inc. (GEVO Stock Report). The company has been in the limelight for a few months now with the initial spark coming on August 20th. Leading up to this, we’d been watching GEVO stock since early July. This began as there was a surge of interest in things like alternative fuels and electric vehicles lately. That trend hasn’t stopped either. If you look at the last few weeks of general trading, attention on these two topics has fueled some of the strongest runs in the small and micro-cap space.
The company itself also holds 118 patents and patent applications directed to its technologies and specific methods & products. Peak Value IP LLC conducted an independent valuation of the company’s IP portfolio earlier this year. The firm yielded an indication of investment valuation of $412 million using its “Income Approach”.
Gevo took off in particular after making a big announcement that it exceeded $1.5 billion in long-term revenue contracts. Since then, it’s remained a top penny stock to watch even after testing and failing to break above its 200 day moving average. We also introduced it this week as one of the “ESG stocks” to watch. ESG stands for “Environmental, Social, and Governance.” The basic idea behind it is in support of companies that leave a positive impact on those specific areas of interest.
Given the current state of alternative fuels and energy, in general, GEVO stock has remained a top name in daily discussions. Will this momentum continue through October?