Which Penny Stocks Should You Know About Heading Into 2021?
As we inch closer to the end of a tumultuous year, there are many penny stocks to watch. During 2020, the COVID pandemic has made several penny stocks jump up greatly in value. While not all penny stocks are correlated with the pandemic, some that are, have seen a lot of bullish interest. For this reason, let’s take a look at some of the industries that have seen bullish momentum from the pandemic.
First and most obvious of all, we have biotech penny stocks. This is mostly self-explanatory as these penny stocks usually have a high correlation with the pandemic. While some are working to produce vaccines and COVID treatments, others are simply correlatively jumping in value. What we see here is that biotech penny stocks that don’t deal with COVID-issues, can see boosts in momentum simply because they work in the biotech industry. Next, we have digital learning and digital communications penny stocks. These companies have become extremely popular during the pandemic as they have provided a way to keep business and education going.
Thirdly, we have electric vehicle penny stocks and energy penny stocks. While these are very different penny stocks to watch, both have seen momentum during the pandemic. EV penny stocks have been able to grow due to their factories usually being autonomous. This means that there is less of a need for in-person workers, thus more productivity during the stay-at-home orders.
With energy penny stocks, investors are betting on a post-COVID economy. These companies have dropped in value significantly during the early stages of COVID. Now, however, investors believe that energy consumption may jump up to pre-COVID levels. With all of this in mind, let’s take a look at four penny stocks to watch for the new year.
Penny Stocks to Watch
- Novan Inc. (NOVN Stock Report)
- Platinum Group Metals Ltd. (PLG Stock Report)
- Rockwell Medical Inc. (RMTI Stock Report)
Penny Stocks to Watch: Novan Inc.
Novan Inc. Is a COVID penny stock to watch due to its role in producing new treatments for the illness. In the past month, shares of NOVN stock have shot up by almost 30%. At the end of October, Novan announced that its nitric oxide-based medicine is showing an antiviral effect when up against COVID-19. Paula Stafford, CEO of the company, stated that “the last few months have been marked by many significant achievements for the Company and the advancement of our priority development pipeline…We also recently reported positive in vitro results demonstrating antiviral effect of our Nitricil platform against coronavirus.”
Financially, the company reported a net loss of around $8.4 million for the quarter. But, with a total cash amount of $43 million and positive working capital of around $36 million, it looks like Novan Inc. is in a cash strong position. As we see with most biopharmaceutical penny stocks, losses are quite common until a drug is approved and then produced or licensed by the company. In the meantime, the majority of capital goes to R&D purposes.
With COVID rates on the rise once again, the need for new drugs to aid in the treatment of COVID, is imperative to global health. With this in mind, Novan Inc. could continue to be considered as a penny stock to watch moving forward.
Penny Stocks to Watch: Platinum Group Metals Ltd.
Platinum Group Metals Ltd. is one of the largest gainers on December 7th, pulling in around 25% in gains during intraday trading. While there was no specific news that came out on the 7th, the company recently announced a non-brokered private placement. With this, the company will sell roughly 1.12 million common shares at around $2.23.
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This leads to gross proceeds of around $2.5 million. With these proceeds, the company will be able to pay for development costs at its Waterberg Project in South Africa. For some context, the company works as an operator and owner of the Waterberg Project. This project contains high mineralization of palladium, platinum, gold and rhodium.
In the past month, shares of PLG stock have shot up by almost 100%. In six months, that number jumps up to a staggering 147% in gains. During the pandemic, the demand for raw materials that are used in electronics has shot up dramatically. In addition, many investors believe that these materials will be in high demand once the pandemic begins to lessen in severity.
While this is quite speculative, it remains that the demand is high for these materials. Whether or not this can make PLG stock a penny stock to watch in the future remains up to investors to decide. But it is worth mentioning that since the beginning of the 4th quarter, shares of PLG stock have jumped 113% so far.
Penny Stocks to Watch: Rockwell Medical Inc.
Rockwell Medical Inc. is a biopharmaceutical company working out of the U.S. The company states that it is producing drugs that target various renal diseases as well as kidney diseases. The company has two main drugs in its pipeline. These drugs are Triferic and Calcitrol.
In addition, the company states that it also works in the hemodialysis market. In this market, the company operates vertically, in the manufacturing, sale and distribution of these products. Early in November, the company reported its Q3 earnings report. In the report, revenue stayed mostly the same, coming in at $15,670,000. This represents a decrease of around 0.82% over the previous years quarter.
What is more important is that EPS rose over the past year by around 17% ($0.10 per share). The company also reported that it ended the quarter with around $67 million in cash. Russell Ellison, CEO of Rockwell, stated that Rockwell Medical is sufficiently capitalized to drive value creation now, in the near-term and into the future, and we are working across three tracks, concurrently: maximizing U.S. sales of Triferic and soon to be launched, Triferic AVNU; expanding the global commercial reach of Triferic through our key partners. I am pleased to report that we have made important progress across all three tracks in the third quarter of 2020.”
While it isn’t working in the COVID niche, some investors believe that its correlation could make it a penny stock to watch.