Are These Penny Stocks To Buy Or Avoid Right Now?
While Monday, January 4th was an overall rough day for the stock market, there were plenty of penny stocks making big gains. During the trading day, companies from a wide array of industries shot up in value. Now, this occurred for a large range of reasons including everything from COVID to senate runoff races in the U.S. While the day got off to a very solid start, investors soon remembered that there may be some political hiccups in the coming weeks. As usual, penny stocks don’t tend to play by the rules of normal stocks. This means that despite overall market sentiment, there are usually some cheap stocks showing bullish interest.
In 2021, investors should consider a few factors before searching for penny stocks to watch. For one, the election of Joe Biden as President means that several industries could get a boost. This includes but is not limited to electric vehicles, certain energy names, biotech, and even marijuana. All of these areas have a large correlation with a Biden campaign message for one reason or another.
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In addition, investors should consider that COVID cases may continue to rise into the foreseeable future. Despite vaccines being distributed around the world, there are many areas where case numbers are increasing. This means that the focus on biotech and biopharmaceutical penny stocks is continuing to rise as well. This sentiment was also illustrated during trading on January 4th, as many biotech penny stocks rose in value. Moving into the new year, here are a few penny stocks that gained on January 4th. While all of these are technically penny stocks to buy for under $3, does that make them any less risk than, say, stocks over $3?
Penny Stocks To Buy For Under $3
- ADMA Biologics Inc. (ADMA Stock Report)
- Guardion Health Sciences Inc. (GHSI Stock Report)
- Biolase Inc. (BIOL Stock Report)
- Novan Inc. (NOVN Stock Report)
Penny Stocks to Buy [or avoid]: ADMA Biologics Inc.
ADMA Biologics Inc. is a biopharmaceutical company manufacturing and marketing several treatments. The company states that it “utilizes plasma-derived biologics to treat a wide variety of patients”. This includes those suffering from immunodeficiency diseases and those who are at risk of receiving certain infectious diseases. In the U.S., the company has three drugs that are currently approved for treatment. This includes BIVIGAM, ASCENIV, and NABI-HB. Last month, the company announced that it had increased an existing credit facility to around $100 million. This announcement comes as an amendment to the previous $85 million loan amount.
Joseph Edelman, CEO of Perceptive Advisors (the company providing the loan), states that “this upsized loan amendment demonstrates Perceptive’s long term view for the plasma industry and ADMA’s important role as a reliable producer of plasma-derived biologics. We remain committed to supporting ADMA’s business and unlocking shareholder value that we believe has yet to be realized.”
AMDA explained that it is still on track to provide top-line revenue north of $250 million by 2024. While that is still three years away, it seems as though ADMA Biologics continues executing on its pipeline. This week, the Centers for Medicare and Medicaid Services approved transitional pass-through payment status and established a new reimbursement C-code, C9072, for ASCENIV which went effective January 1st. ASCENIV is the company’s primary immune deficiency disease treatment. In light of these recent developments, momentum has picked up in the stock and could make it one to watch in January.
Penny Stocks to Buy [or avoid]: Guardion Health Sciences Inc.
Guardion Health Sciences Inc. is a specialty health sciences company that we’ve been following since the start of December. The company works produces various products for use in the medical food and medical devices industry. This includes Lumega-Z, GlaucoCetin, and others. These medical foods are aimed at providing vision aiding benefits to patients. In addition to this, the company has several medical devices in its pipeline. This includes VectorVision, CSV-1000, MapcatSF, and more. The majority of what Guardion is working on is involved in ocular health.
While no news came out during the trading day regarding Guardion, it seems as though GHSI stock is highly correlated to the biotech industry. Because of the increasing number of covid cases, consumers and businesses are more focused on health than in many years prior. This means that companies like GHSI have received a greater amount of popularity in the past few months.
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Additionally, the company announced last month that it has developed a new vision and energy supporting drink, EPIQ-V. This substance will be marketed in China, where the company has already been granted a trademark for it. The Asian market for products like this is extremely large, especially considering the popularity of Guardion’s other products in Asia. Furthermore, the company recently appointed Bret Scholtes, a seasoned health industry veteran, to be its new President and CEO. Robert Weingarten, Chairman of the Board for Guardion, commented that “We believe that his proven business acumen and extensive experience in the nutritional products industry will serve to usher Guardion into a new era of growth and success.”
In light of the recent developments, however, will GHSI be on your list of penny stocks to buy or avoid this month?
Penny Stocks to Buy [or avoid]: Biolase Inc.
Biolase Inc. is another one of the companies we’ve been discussing for the last month and has seen a strong move over the last week or so. So why the major increase in value for BIOL stock? Well, again we have to consider the correlation between certain biotech companies and their COVID-related spikes. While Biolase is a biotech penny stock, it is slightly different from the rest. The company operates in the dental sector, providing lasers and other products to a wide range of dental offices around the world.
In November, Biolase announced its Q3 report for 2020. In the report, the company posted that U.S. laser revenue increased around 16% year over year. Additionally, the company doubled its revenue sequentially, which albeit is still down by around 24% over last year’s period. This can be attributed to the effects of COVID on in-person medical and dental visits. The company recently stated that 95% of dental offices have reopened within the U.S.
In addition, dental procedures have hit around 80% of their pre-covid levels. Because of this, Biolase expects that its business will begin to be back on track in the foreseeable future. Furthermore, the company was just granted a patent for “Dental laser interface system and method” last week. As more milestones are reached, it could remain one of the biotech penny stocks to watch.
Penny Stocks To Buy [or avoid]: Novan Inc.
Novan Inc. rounds out this list of penny stocks under $3. Whether it finds itself on the list of names to buy or avoid is up to traders. However, what we can say is that over the course of the last quarter, NOVN stock has experienced a strong move in price. More recently, it has also seen volume picking up as well. Since early October, shares of the penny stock have climbed from around $0.46 to highs of $1.18 so far this week. Meanwhile, there haven’t been any major news headlines since December 21st. Yet in the last three trading sessions, NOVN shares have surged in price.
Leading up to this jump, Novan did announce entry into a Master Services Agreement with a company to develop its intranasal drug, berdazimer sodium for COVID-19. It’s agreement is with Catalent that will support certain development activities for the formulation.
“Following the initial positive in vitro results that we announced earlier, we believe berdazimer sodium has the potential to offer benefit in inhibiting the replication of SARS-CoV-2, the virus that causes COVID-19, and we look forward to further exploring its potential.”Dr. Carri Geer, Chief Technology Officer of Novan
Novan is targeting filing a potential IND application with the FDA and targets commencing human clinical trials in the second half of this year. With another uptick is COVID cases, will NOVN stock be one to watch during the early weeks of 2021?