Why Are Investors Focusing On These Energy Penny Stocks?
As vaccine efforts rise, investors are continuing to search for penny stocks to watch. Within the pandemic stricken economy, there are several areas of focus that investors are keyed into. In addition, the added factor of a cemented Biden presidency means that there are additional industries that traders should be focused on.
One of the main industries that investors are watching right now is the energy sector. Now, this is quite broad as it includes both renewable energy penny stocks, oil, and coal stocks, and companies related to the production or distribution of energy.
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Before we start making a list of penny stocks to watch, let’s talk about why energy penny stocks are seeing so much attention. It seems as though there are two reasons why this is the case. The first is the elephant in the room, which is covid. At the beginning of the pandemic, energy companies were still producing high amounts of fuel as operations seemed quite normal.
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But, very quickly massive stay-at-home orders took place, resulting in a massive reduction in energy consumption. This meant that energy companies were sitting on a lot of raw materials with no demand to match. Now, at the end of 2020, the vaccine means that covid could soon come to an end. This would hopefully mean that more people could travel, thus an increased demand for energy.
The second factor has to do with the upcoming Biden presidency. Joe Biden has stated that he wants to bring America toward complete reliance on renewable energy within the next decade or so. This means that there is a large focus on renewable energy penny stocks. With these two factors in mind, let’s take a look at three trending energy stocks this week.
Energy Penny Stocks to Watch: Gevo Inc.
Gevo Inc. (GEVO Stock Report) is an interesting energy penny stock in that it is quite different from most others. The company operates in the airline sector, providing jet fuel, gasoline and diesel to commercial and private aircraft. The company states that it is working on utilizing renewable electricity and natural gas to help increase sustainability.
In addition, Gevo Inc is researching how to utilize low carbon fuels to help reduce carbon emissions in air travel. While air travel has without a doubt seen better days, many investors believe that a vaccine could help turn this around. In the U.S. a vaccine was approved during the second week of December. While rollout may take some time, the hopes are that travel can resume in the very near future. This would be a major benefit to companies like Gevo Inc. for obvious reasons.
Recently, the company announced a statement regarding United Airlines commitment to reducing its greenhouse gases. Patrick Gruber, CEO of Gevo, stated that “we welcome United’s positive announcement to support the reduction of greenhouse gases. It is also notable the possibility to have a net zero or even negative, GHG profile with SAF like ours. That is a game changer. It is good for the airline industry, good for U.S. farmers, good for consumers, and good for the environment.”
Energy Penny Stocks to Watch: Contango Oil & Gas Co.
Contango Oil & Gas Co.(MCF Stock Report) is an independent oil and natural gas company working on the acquisition, exploration, and development of various projects around the U.S. The company states that it produces both crude oil and natural gas in the Gulf of Mexico as well as in Texas, Louisiana, Oklahoma, and Wyoming. At the end of last year, the company stated that it held reserves north of 316 billion cubic feet equivalent.
With its massive stockpiles, the company looks like it should be able to meet any major post-covid demand for energy. Recently, the company announced that it sold around $14.2 million shares of common stock in a private placement deal. This should help to bring in roughly $22 million in proceeds. With this, the company could continue its exploration into new properties as well as in the development of existing ones.
In addition to this, the company recently announced that it has entered into an agreement to purchase various assets in the Big Horn Region as well as in the Permian Region. The total purchase price of this deal comes out to around $58 million in total. With this however, the company will have greater access to some of the most energy rich locations in the U.S. This includes the Elk Basin, which has produced around 500 million barrels of oil in its entirety. Historic estimates show that this area alone could produce around 1.2 billion barrels in total. With its position in the energy market continuing to increase, Contango Oil & Gas could be a penny stock to watch right now.
Energy Penny Stocks to Watch: Ocean Power Technologies Inc.
Ocean Power Technologies Inc. (OPTT Stock Report) is another company on this list that is quite different from many of its competitors. Ocean Power Technologies states that it works in producing clean electric power in offshore projects. In addition to this, the company is also involved in the software industry with its PowerBuoy technology.
This software can help customers to monitor offshore oil and gas operations as well as offering communications solutions for these operations. One of the things that potentially make OPTT stock one to watch is its position in the renewable energy market. As stated earlier, Biden’s presidency has a large goal of moving the U.S. toward renewable energy within the next decade or so. With that in mind, it appears as though companies like Ocean Power could build in popularity.
During trading on December 15th, shares of OPTT stock shot up by around 7.3%. In the past month, shares are up by over 40%. What’s more impressive is that in the past six months, shares have shot up by a staggering 380% or so. With so much positive sentiment surrounding the renewables market, OPTT stock could be considered by some as a penny stock to watch.