4 Hot Penny Stocks To Buy? Some Traders Think So
Penny stocks are some of the most volatile asset classes in the stock market today. Whether you want to talk about speculative momentum or simple price action, these cheap stocks are built for both. For one, the companies behind the stock itself tend to be early-stage/development stage. This is what can quickly build upon the speculative nature of the stock. Traders try to read between the lines of news, filings, and even rumors with hopes of “getting in early”. While many of these companies end up failing, the ones that don’t stand as shining examples of “what could be the next XYZ company”.
When it comes to price, penny stocks are another prime candidate for attracting day traders. Simply put, these stocks under $5 only need to move a small amount in order to realize large returns. The lower the price, obviously, the less the move needs to be. One of the stocks under 10 cents only needs to move a penny for a 10 percent return. Apple (AAPL Stock Report) on the other hand needs to move more than 1,300 pennies for the same return.
Then again, this opens the door for more risk. The same move in the opposite direction yields just as big a loss. Furthermore, when you talk about speculation, it can end up building more hype in stock than anything. This, in turn, can cloud judgment and make traders forget about fundamentals entirely. With that, there’s a fine balance of keeping in check and remembering why you’re trading in the first place; to make money. This having been said, are any of these on your hot penny stocks to buy list right now, or is the heat too much right now?
Hot Penny Stocks To Buy [or avoid]: SIFCO Industries (NYSEAMERICAN:SIF)
It’s almost a given that when you’ve got penny stocks, there will be volatility. But when you throw in certain stocks with certain share structures, things get even more volatile. What I’m talking about are low float penny stocks. These are ones where the total amount of shares trading in the public float are lower in number. Simple supply and demand metrics suggest that low supply and high demand equal higher prices.
Case in point, SIFCO Industries (SIF Stock Report). This thinly traded stock barely sees action in the market. In fact, its highest share volume day in more than 6 months was on December 23rd. That’s when SIF saw a “whopping” 139,328 shares traded. By most accounts, that’s nothing to write home about.
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So why is SIF on a list of penny stocks right now? It’s all coming down to the latest news. Wednesday after the close, the company reported Q4 financial results. Since the company makes components for aerospace and energy markets, the last quarter was likely an “interesting” one due to COVID. But how interesting is where the excitement comes in. SIFCO reported a 100% increase in EPS year-over-year. This was enough to trigger a big boost in share price, which seems to have continued into Thursday’s session. Due to the parabolic nature of low float penny stocks, the big question is whether or not SIF stock can sustain higher levels.
Hot Penny Stocks To Buy [or avoid]: AIM ImmunoTech (NYSEAMERICAN:AIM)
AIM ImmunoTech (AIM Stock Report) is another one of the premarket penny stocks trading higher on Thursday. Similar to SIFCO, AIM shares were trading higher after a new update. Much of the latest focus has been on AIM’s Ampligen treatment & its potential use in COVID patients. Thursday morning, the company announced that the post-COVID-19 “Long Hauler” portion of the active AMP-511 Expanded Access Program protocol received approval from the Institutional Review Board for public notification of potential patient enrollment.
What does this mean? The protocol authorizes AIM to enroll up to 100 trial participants to receive Ampligen treatments. This step brings the company one move closer to developing the treatment as a therapy for those inflicted with SARS-CoV-2-induced chronic fatigue.
“While major global pharmaceutical companies have understandably focused their efforts on developing COVID-19 vaccines, AIM believes there is an equally essential need to help post-COVID-19 patients who…may be suffering from long-term and debilitating COVID-induced chronic fatigue symptoms.”AIM CEO Thomas K. Equels states
With AIM stock moving early on Thursday, there’s something important for traders to note. The last few months have shown that AIM can breakout, yes, but overall the trend has been relatively sideways to slightly lower. Will this latest news trigger an actual uptrend or is this another short-term spike?
Hot Penny Stocks To Buy [or avoid]: Lightbridge Corporation (NASDAQ:LTBR)
Lightbridge Corporation (LTBR Stock Report) saw a nice pop early during Thursday’s pre-market session. Shares reached highs of $4.39 and continued trading around $4 leading into the opening bell. Similar to the two companies mentioned above, Lightbridge was moving after making headlines.
The company announced that it was awarded a patent in Eurasia. This was for nuclear fuel assemblies (Patent No. 036359). Lightbridge has been much more active during the last few weeks. Since the beginning of November, shares have managed to climb from around $2.50 to as high as $4.32. Much of this was due to the uptick in bullish sentiment regarding alternative energy sources. Nuclear power has become a hot topic among traders.
What’s more, is that President-Elect Joe Biden appears to have also shown support for nuclear power programs. Some even see this as an “unstoppable” force for the 21st century. “In terms of policy, nuclear has gone too far and made too much progress to go back,” said Jennifer Gordon, Managing Editor and Senior Fellow, Global Energy Center at the Atlantic Council. “It’s almost unstoppable.”
Hot Penny Stocks To Buy [or avoid]: Gevo Inc. (NASDAQ:GEVO)
Speaking of hot penny stocks to watch, Gevo Inc. (GEVO Stock Report) has been on our watch list for months. Since August, shares of GEVO stock has risen from around $0.55 to highs of $3.83 during pre-market trading on Thursday morning. What began as the excitement surrounding the company’s contract pipeline has blossomed into a brighter outlook based on recent updates from the company this month.
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Most recently, Gevo announced that it optioned the right to purchase roughly 239 acres of land near Lake Preston, SD, and met the initial milestone to secure control of a site by the end of this year. Specifically, it had to meet the conditions required by its contract that Trafigura Trading LLC announced in August 2020. That deal is what triggered the early momentum for the stock during the second half of the year. This off-take agreement brought Gevo’s total off-take total to about 48MGPY. Collectively it represented roughly $1.5 billion of revenue across the life of the contracts.
The production facility planned for Lake Preston is contemplated to produce about 45,000,000 million gallons per year collectively of jet fuel and renewable gasoline products.
Something to note if you’ve followed GEVO stock for a while is the chart. Shares are back at a level not seen since late last year. Even prior to any pandemic sell-off, GEVO failed to hold at or break above these levels. Even with the recent excitement in alternative energy stocks, will GEVO manage to break above this prior area of resistance?