Biotech Penny Stocks Continue Captivating Traders
As the stock market pushes toward new highs, many biotech penny stocks are taking the lead. Furthermore, with the announcement of a $2 trillion stimulus package, many expect another surge to come to the market. On the downside, we have to consider that this stimulus package could bring long-term inflation to the U.S. economy, underpinning a potential bubble scenario.
Regardless, we saw a big boost to markets with last year’s stimulus infusion. Many also flocked to apps like Webull and Robinhood to gain exposure to stocks. This entirely new generation of traders hasn’t focused on fundamentals as much as it has momentum. In several recent cases, we’ve even seen unbridled buying in names that otherwise wouldn’t justify such bullishness. This past week alone saw traders on Reddit rally behind names like GameStop (NYSE: GME) just because a short-seller was calling for a drop. This mentality has become all-too-frequent and suggests a new type of trading style altogether. Case in point, GameStop was actually a penny stock not that long ago and one we discussed quite frequently on the site.
But, while some new “Robinhood traders” focus on these high volume larger-caps, others find opportunity within certain industries like biotech. As we’ve discussed in the past, biotech has become one of the staples for traders daily. Even last week, we saw health- and pharma-related stocks explode to new highs. With that in mind, there could be a lasting tailwind for the biotech industry. In January 2021, many believed that certain biotech stocks could be trading at very low or even discounted prices. With so much bullish interest in penny stocks, it doesn’t hurt to start putting a watch list together that includes names in hot sectors like biotech.
Robinhood Penny Stocks to Watch Next Week
- OncoCyte Corp. (NYSE: OCX)
- Transenterix Inc. (NYSE: TRXC)
- Senseonics Holdings Inc. (NYSE: SENS)
- Biolase Inc. (NASDAQ: BIOL)
One of the companies that we’ve discussed during the past few months is OncoCyte Corp. After shooting up by roughly 17% on January 22nd, OCX stock is once again on our radar. At $4.76 per share, it’s making its way out of penny stock territory. But to see if it can successfully do that, let’s take a look at its business. OncoCyte is primarily a biotech company working on advanced cancer detection methods. This includes its large pipeline of detection products such as DetermalO and DetermaDx. These tests utilize molecular gene expression to pull data from the body. In the past few months, OncoCyte has been working on obtaining the funding needed to continue operations and develop its major pipeline.
On Wednesday, January 20th, it announced just that. The company stated that it would be entering into a definitive agreement with Pure Vida Investments (its largest shareholder) to sell roughly $25 million worth of common shares. This offering will increase Pure Vida’s ownership from under 10% to around 16%. This is for OncoCyte to have access to greater capital for its research expenditures and expansion needs. Also, Pura Vida’s willingness to increase its stake means that it holds confidence in the future of OncoCyte.
Commenting on the milestone, CEO Ron Andrews said, “We believe our strengthened balance sheet will help facilitate our planned expansion activities and offerings in lung and other cancers as we prepare to launch DetermaIO™ and DetermaTX™ later this year, as well as provide the resourcing necessary to complete development of our anticipated blood-based monitoring offerings.”
Will OCX remain one of the top biotech penny stocks to watch this year with commercialization in its sites?
Transenterix Inc. is another company that we’ve been discussing for quite some time. Since late-July, shares of TRXC stock have climbed by roughly 845%. Year-to-date, shares have climbed by over 550% to highs this week of $4.44. This is a massive jump and definitely hasn’t been ignored. But, investors should also be realistic about how long these bullish gains can go on without at least some consolidation coming into play.
In the case of Transenterix, the company has a lot going for it right now. In the past few days, we’ve seen shares of TRXC bounce up and down quite a lot. One of the major catalysts for this is the European approval for its Intelligent Surgical Unit or “ISU” as its known.
As a biotech company, Transenterix makes its revenue off of approved products. The fact that it was given this approval is a big deal for Transenterix now and moving forward. This device is utilized in laparoscopic procedures. And if it sounds too specific, more than 6 million of these procedures occur in the U.S. and Europe yearly. Intelligent systems can do this fairly straightforward procedure, and the demand remains very high.
In addition to this, we see that Friday, the US Patent & Trademark Office granted the company a patent titled, “ENDOSCOPIC CONTROL AND MANEUVERING SYSTEM IN AT LEAST TWO DEGREES OF FREEDOM.” While the company didn’t release any press around this milestone, it looks like at least a few traders have found the same thing we did. Heading into the new week, it’ll be interesting to see how the market reacts.
Senseonics Holdings Inc.
One of the other interesting biotech penny stocks on our list this month is Senseonics Holdings Inc. The company produces glucose monitoring devices that are used by diabetic patients. Its product pipeline includes the CGM System, Eversense, Eversense XL, and others. These devices were primarily sensor-based and can be inserted under the skin. They utilize a smart transmitter to send data regarding a patient’s glucose level.
On the market side of things, SENS shares have performed strongly this year. In the past month, shares are up by over 270%. In the past six months, that number jumps up to 425%+. This could be another case of a biotech stock that is receiving bullish interest due to the industry’s overall excitement.
Senseonics has also announced some key updates recently. On Thursday, January 21st, the company increased its underwritten offering to bring in total gross proceeds of $100 million. The goal is to use this funding for general corporate purposes and product development, along with the funds needed to move through the various regulatory stages. With any biotech company, funding is the most important necessity for growth.
These types of fundraising methods take place quite often. Though shares slid (as many do) with news of the offering, something to take notice of is Friday’s aftermarket session. Shares actually rallied to highs of $2.70 before the final closing bell. Considering that the financing is set to close “on or about” January 26, 2021, traders could be speculating on momentum now that Senseonics has a nine-figure funding under its belt for growth capital.
One of the high-volume penny stocks to watch recently has been Biolase Inc. The dental laser company has repeatedly seen days of double-digital gains in the past few weeks. Since September, by over 280%. As a producer of medical devices, Biolase depends on the medical industry for its demand. When COVID hit, the focus was on necessary medical procedures, with dental work only resuming in the past few months. Now, Biolase has stated that dental procedures are occurring at almost 90% of their pre-pandemic levels.
Of course, investors should also consider how volatile BIOL stock is and whether its massive rise can maintain in the future. A few weeks ago, the company announced an agreement with the DCA to expand the use of dental lasers around the U.S. The Dental Care Alliance has an affiliation with more than 330 practices across 20 states in the U.S. Because these lasers have high efficacy, adoption could occur on a fast-paced basis.
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Friday, in particular, traders began focusing on BIOL after-hours. This was thanks to a recent 8-K filing showing that the reverse split Biolase sought approval for didn’t receive enough votes to move forward at the last Special Meeting of Shareholder. The Special Meeting will reconvene on February 16, 2021.
Are Robinhood Penny Stocks Worth The Risk?
Whether you’re buying penny stocks on Robinhood, Webull, TDAmeritrade, Interactive Brokers, or the slew of other platforms, risk is always a factor. The idea behind “Robinhood penny stocks” focuses on listed companies. The fact that the application doesn’t give access to broader OTC penny stocks means that the discussion is based on Nasdaq and NYSE companies. So whether or not they’re worth it is up to you and depends on your own personal trading style.