4 Penny Stocks To Add To Your January Watch List
Heading into the long weekend, the markets are still red hot and penny stocks remain at the top of the list. This year has already been a lot of things. But 15 days in shows something interesting that I’m sure many of you have also noticed. Many of the smaller-cap stocks have gained much more momentum than their larger-cap peers. This is something we’ve discussed a few times already.
It would appear that with more stimulus on the horizon, a new breed of trader has begun to appear in the market. This type of trader has focused more on hot sector momentum and technical trading as opposed to a more fundamental approach. Is it good, is it bad? I’m sure we’ll see what the answer is in 2021. But it is hard to ignore the multiples that many of these current and former penny stocks are trading at.
One of the clearest examples of this notion is demonstrated by the electric vehicle industry. If you look at some of the hot EV stock in the market that aren’t Tesla (NASDAQ: TSLA), you should see what I mean. In fact, many of these popular names were trading under $5 – many under $1 not that long ago. These companies may have some sales or pre-orders but are still not profitable nor generating meaningful revenue. Despite that as the case, the hype driving electric vehicle stocks is undeniable. This has lead many to believe that the market cares less about fundamentals (for now), and more about industry potential.
So where do we go from here? As the saying goes, “Don’t fight the market”. Right now I think is the time that this couldn’t be more relevant. With that, we’ve seen a surge of interest in highly speculative penny stocks. For traders, it’s important to sift through the noise and identify real opportunities that align with your strategy. Keeping this in mind, are any of these on your list of penny stocks right now?
Penny Stocks To Watch
- Havn Life Sciences (OTC: HAVLF)
- Avinger Inc. (NASDAQ: AVGR)
- Acasti Pharma Inc. (NASDAQ: ACST)
- Sundial Growers Inc. (NASDAQ: SNDL)
Mushroom Penny Stocks To Watch: Havn Life Sciences
One of the niches of the stock market experiencing a surge of interest this year has been psychedelics. It’s part biotech, part vice, and part nutraceutical. But somewhere in the middle lies the “new opportunity”. Magic mushroom stocks or psychedelic stocks have been compared to things like pot stocks during their early foray into the market. There’s plenty of speculation to go around. But a lot is coming down to execution and leadership. What are the companies doing to move the needle on revenue and is there a track record of success in leadership.
For Havn, it could be a bit of both. While its C-level is made up of some of the top brass and early movers in cannabis, its board, specifically, the Executive Chairman has been a big focus for the market. Vic Neufeld is the former CEO of Aphria (NASDAQ: APHA), which was one of the frontrunners of the early cannabis boom sits in this position. His track record speaks for itself in my opinion. Now Neufeld is getting into psychedelics and grabbed his seat at the table of Havn.
Aside from this, the early part of the new year could be important for the company. In particular, Havn is planning the official launch of its first line of nutraceutical mushroom products in Canada. Last month, the company announced a product listing agreement for product sales in select Nesters Markets in British Columbia. “This is a major milestone for Havn Retail, enabling us to reach our goal of launching our initial product line in the market for early 2021,” said Tim Moore, CEO of Havn Life.
Furthermore, the company has also begun investigating standardization methods for extracting psychoactive compounds. The company partnered with Complex Biotech Discovery Ventures to begin Health Canada approved analysis of psilocybin under Havn Life’s section 56 exemption. Havn Life will work towards the development of the very first library of psilocybin compounds and lay the foundation for the future development of proprietary extraction methods. With these developments and commercial retail launch, it could be a company to watch this month.
Biotech Penny Stocks To Watch: Avinger Inc.
Avinger isn’t a mushroom stock but it does fall under the category of biotechnology. In particular, the company focuses on medical devices, namely its Tigereye catheter platform. It’s an image-guided chronic total occlusion crossing system. Those who’ve read our content are likely familiar with this company. It was one of the more frequently discussed names in December and January so far.
This week comes with a key update from the company. The news sets a new milestone and one that could be of interest to traders. Avinger announced that it commercially launched Tigereye. This now allows the company to offer its platform in the U.S. and Germany. This has been a long-road coming for the company and an event that has been at the center of speculation for weeks. As you’ll see on the chart, this has translated favorably for AVGR stock.
“We believe full commercial availability of the Tigereye device will be an important contributor to expanding our revenue growth opportunities in 2021, both in terms of attracting new Avinger user sites and supporting higher utilization per site,” Jeff Soinski, Avinger’s President and CEO, said. “With three new product families launched in less than three years, Avinger offers physicians a comprehensive suite of the most advanced PAD therapeutic devices available today to provide effective, measurable treatment options with superior patient outcomes.”
Acasti Pharma Inc.
Similar to Avinger, Acasti Pharma is a popular penny stock to watch recently. The company has experienced a bump in interest since the start of November. While there was speculative trading in Avinger in anticipation of its commercial launch, Acasti Pharma could be benefiting from a different point of focus from the market.
The company is currently “exploring and evaluating a range of strategic alternatives” and engaged Oppenheimer & Co to lend a hand. The main reason was to undertake a strategic review of the company with the purpose of “exploring strategic alternatives to drive shareholder value”. This includes potential mergers, acquisitions, or other initiatives that involve Acasti and/or its product. In its current pipeline are products including CaPre, the company’s treatment for hypertriglyceridemia.
Acasti had reported Phase 3 data of its CaPre treatment last year. Following the results, company decided not to push forward with filing a New Drug Application with the FDA. But it still looks like the company is open to some sort of advancement of the treatment in light of its goals outline in this “strategic alternatives” initiative. While the market waits for more detail, ACST stock remains in focus as shares have jumped significantly over the last few weeks.
Marijuana Penny Stocks To Watch: Sundial Growers
Above I discussed the idea that traders are reacting more from hype and speculation than fundamentals. Sundial Growers likely falls into that category. It has been one of the more heavily scrutinized pot stocks for months yet it continues trading hundreds of millions of shares per day. In light of this, it has become one of the marijuana stocks to watch. It has also mounted a slow and steady climb since the beginning of November (with a lot of volatility along the way).
Regardless, of the fact that Sundial continues raising money that could present potential dilution, the company has also announced milestones. The most recent came this week when the company launched its premium concentrates products under its Top Leaf brand. Sundial said it plans on providing additional offerings this quarter including Top Leaf’s Oregon Golden Goat bubble hash and Grasslands’ Sativa & Indica hash.
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In light of new state initiatives from the likes of New York, for example, the cannabis industry itself has seen a jump. In light of everything going on with SNDL, is it really one that commands a presence on your watch list? Or has it benefited more from sympathy momentum than anything else? Leave a comment below with your thoughts.
Some Final Thoughts On Penny Stocks
I can’t stress enough that speculation has always played a role when it comes to penny stocks. That’s one of the high points for these companies: they’re “emerging growth”. With that comes the idea that there’s potential ahead for some of them. So it’s not a surprise that speculative trading in a factor. However, with the recent surge of retail interest pushing rampant momentum in the stock market, it’s never a bad idea to keep your trading plan in mind as to not get caught up in the psychologic hype.