Penny Stocks To Watch As Small Cap Index Outpaces Market
While not all stocks in the small-cap Russell 2000 are penny stocks, many will associate the term “small-cap stocks” with these cheap shares. If you’re new to this arena, welcome. Let’s get started with a little intro and then we can discuss a few names to watch this week. First, what are penny stocks? These are shares of public companies trading for less than $5 per share. I know it might sound simple, and it really is. I wouldn’t complicate the definition with the conjecture of the masses; some say “penny stocks should only be stocks trading for pennies.” We’ll stick with the SEC definition because it gives us more companies to discuss.
Moving on, let’s talk about the small-cap Russell 2000 (IWM ETF). Again, not all penny stocks are in the Russell and not all stocks in the Russell are those trading below $5. However, traders will sometimes use this ETF as a benchmark for smaller companies. This tends to translate into the health of penny stocks in general. But what is the small-cap Russell 2000? According to the Fund itself, “The iShares Russell 2000 ETF seeks to track the investment results of an index composed of small-capitalization U.S. equities.”
Simple enough, I know and as far as performance goes, some may be surprised to see the growth it has experienced. Since January 2009, the IWM has skyrocketed a staggering 371% and while still just as impressive, the S&P SPY ETF has “only” climbed about 300% during the same time.
Penny Stocks To Watch As Small Caps Race Higher
Furthermore, the IWM flexed its muscles, even more, this week. While the S&P wavered, the IWM reached another new, all-time high on Wednesday even in light of recent turmoil in Washington, D.C. Bob Pisani of CNBC interviewed, Peter Tchir from Academy Securities who said, “I think most feel this [the Washington protests] is more of a one-off situation, that this as an isolated event as opposed to some sort of bigger movement, and because of that we can look to the new government and to stimulus.”
“Look at the small cap Russell 2000. It was up 4%. The Nasdaq 100 was down 1%. That is a sure sign the market is betting on stimulus and some change in tax policy. The market is looking forward to earnings and growth down the road”
So, with small-cap stocks clearly taking a pole position during the first week of 2021, traders are locking their sights on cheap shares of smaller companies. That means, for us, penny stocks are in the spotlight right now.
Penny Stocks To Buy [or avoid]
- Future FinTech Group Inc. (FTFT Stock Report)
- United States Antimony Corp. (UAMY Stock Report)
- Gevo Inc. (GEVO Stock Report)
Considering this upbeat sentiment for small-caps, hype and speculation will likely also factor into the trend. In light of the recent momentum for some of these names, will they be the best penny stocks to buy now or ovoid this week?
Penny Stocks To Buy [or avoid]: Future FinTech Group Inc.
You’ll notice something this week that is akin to something that many of us saw back in 2018. That’s excitement surrounding things like Bitcoin and blockchain technology. While many are still licking their wounds from two years ago, others are diving in headfirst in light of the huge surge cryptocurrencies saw. In light of this, a number of bitcoin and blockchain stocks are taking off. With BTC making new highs yet again this week, it makes sense that this niche has gained ground recently.
Future FinTech Group is the next name on a growing list of penny stocks. Initially focused on financial technology, the company made headlines on Thursday that involved the buzzwords of the week. Future FinTech announced China Copyright Protection Center accepted the company’s application for ten software copyrights relating to blockchain technology applications. According to Future FinTech, these were first submitted for review in June of last year.
Zhi Yan, General Manager of the CCM said, “The system we built is simply a blockchain based credit point reward and settlement center for our online shopping mall. Anti-counterfeiting and rewarding system in e-commerce is only the first application of this technology. Our supply chain system, contract farming system, and order management system may also use this technology. Our application of software copyrights will protect our intellectual property rights and help us further improve the blockchain based system of CCM.”
Now, FTFT stock has a history of rampant volatility. So, if this is on your list of penny stocks right now, keep this in mind. FTFT shares have had a tendency to rip higher quickly and fall just as fast. Do you think this latest headline will mark a firm turnaround for the blockchain stock?
Penny Stocks To Buy [or avoid]: United States Antimony Corp.
US Antimony has been one of the penny stocks on our list for months. Not many had heard of this company before. However, in October, it began turning heads as the EV boom took hold of the stock market. At the time, it was speculative based on what the company mined. Aside from traditional metals like gold and silver, US Antimony also produces zeolite and, of course, antimony. What’s antimony? It’s actually an alloy used in batteries and zeolite is also being explored as a battery alternative by companies like GM.
This week, UAMY stock continues to grab headlines. Thursday morning the company announced that all assays were received for its Phase I 1100-meter reverse-circulation drill program in Mexico. The Program targeted a series of coincident surface anomalies defined by past mining, geology, mineralogy, and geochemistry. Among key highlights, the company reported significant gold intercepts. While EV is the flavor of the month, you can’t ignore the excitement around gold either.
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With the dollar slipping this week, gold stocks are a likely candidate for attention. Furthermore, with this news, UAMY stock has jumped even higher during premarket on January 7th.
Penny Stocks To Buy [or avoid]: Gevo Inc.
Gevo Inc. is another one of the names we’ve been following for months now. The company has placed a focus on capitalizing from the boost of interest in alternative energy and renewables. Gevo is building its foothold in the renewable chemicals and biofuels segments of the energy industry. It has further begun the expansion of its largest contracts that were discussed back in August. Gevo signed a deal with Trafigura Trading LLC, which sparked the initial momentum for the stock during the second half of the year.
The off-take agreement brought Gevo’s total off-take total to about 48MGPY, collectively representing roughly $1.5 billion of revenue across the life of its contracts. Jump ahead to December, and the latest milestone secures control of a 239-acre site to meet the conditions required by its contract that Trafigura.
What’s more, is that the company has worked on its debt structure as well. This week Gevo announced that it paid off its entire outstanding balance of $12.7 million of 12.0% Convertible Senior Secured Notes exchanged and issued to Whitebox Advisors LLC on January 10, 2020.
“Full repayment of the Whitebox notes demonstrates the continued strengthening of the Company’s balance sheet,” commented Lynn Smull, Gevo’s Chief Financial Officer.
Something to keep in mind is that GEVO stock has moved in line with other alternative energy & renewables stocks recently. Will this remain the case during the first month of 2021?
