3 Energy Penny Stocks Turning Heads This Week
As January comes to an end, we see a lot of volatility in blue-chips and penny stocks. While the S&P 500 continues to trade near record highs, there are a few themes at play in the market investors need to understand. If we put aside the pandemic, economic instability in the U.S., and the changes that have come with a new presidency, we can examine the trading that occurred on January 27th to see how it may affect penny stocks moving forward. On Wednesday, the influence of retail investors was fully realized. Yesterday, the head trader of True Trading Group, Mike Edward, stated in a broadcast that it was one of the craziest things he’s seen in his years of trading. And yes, yesterday is important both ideologically and for the future of investing.
The trading that took place shows that volatility in the stock market may continue to be extremely high. With retail traders now realizing their influence, we could see bigger swings in the stock market than ever before. Now, this mostly pertains to blue-chip stocks, as penny stocks are usually quite volatile.
But, it is something to keep in mind. With this, investors turn to resource penny stocks, as they present a different and potentially more stable investment for the long term. With the pandemic hopefully slowing down in severity, resource consumption could increase. If that occurs, here are three energy penny stocks that you might want to look at.
Energy Penny Stocks to Watch
- U.S. Well Services Inc. (NASDAQ: USWS)
- McEwen Mining Inc. (NYSE: MUX)
- New Concept Energy Inc. (NYSE: GBR)
U.S. Well Services Inc.
USWS is a penny stock that we’ve been covering for a few months now. One of the main reasons for this is the rise in the value of the energy sector. With energy penny stocks like USWS, investors are hopeful for a demand recovery as covid begins to slow down. Interestingly enough, U.S. Well Services has a unique position in the energy industry.
As opposed to traditional resource-driven companies, USWS provides good services, as its name suggests. This means that its price is driven by demand for resources, but in a different way than traditional energy penny stocks. The company’s products include hydraulic fracturing services as well as electric fracture stimulation. This is a popular method for producing natural gas via wells.
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Many investors believe that the recovery in this sector could take some time to see through. In the past few months, USWS stock has struggled to meet the NASDAQ market value compliance rule. This rule basically states that a stock trading on the NASDAQ has to have a minimum of $1 for its bid price to stay listed. On January 25th, U.S. Well Services announced that it had regained compliance with this rule. This is a good sign for those watching this stock, but it is also something that should be taken with a grain of salt. If the energy sector continues to recover, energy stocks could stand to benefit. With this in mind, is USWS a penny stock to watch?
McEwen Mining Inc.
McEwen Mining Inc. is another pure-play resource penny stock that we’ve been covering for quite some time. As opposed to USWS, McEwen Mining works as an extraction company. This means that it is physically extracting various resources, including gold and copper. It does this at its wide range of owned mining properties, including the El Gallo and Fenix projects in Mexico and the Froome and Tamarack properties in Canada.
While it does have several operations around the world, the company primarily focuses on North America. A few weeks ago, McEwen announced that it would be engaging in a flow-through financing deal. The financing consists of roughly $11.8 million private placement offering roughly the same amount of common shares.
With these proceeds, McEwen should be able to further its development expenditures as well as for the further exploration of its Timmins Region properties. Additionally, in an announcement made a week ago, the company Silver Mountain Mines had entered into an agreement with Nevgold. While this deal may not seem relevant, Nevgold holds the right to acquire the Limousine Butte and Cedar Wash projects in Nevada from McEwen Mining.
Silver Mountain could gain enough capital to complete the acquisition of these properties from McEwen. Obviously, this may be a few months away if that, but it is still an exciting piece of news. With this, shares of MUX stock are up by around 25% so far on January 28th. Whether or not this makes it a penny stock to watch is up to you.
New Concept Energy Inc.
One of the largest gainers that we’ve seen in a while is New Concept Energy Inc. At midday, shares of GBR stock were up by a staggering 636% to $17.30 per share. Obviously, this is now considered a “former” penny stock but worth discussing all the same. As much as we love to write about penny stocks, we love it even more, when a company sees enough bullish interest to “graduate” from sub-$5 levels.
This is the case with New Concept Energy. In the past month, shares of GBR are up by over 800%, which includes today’s gain. Strangely enough, no news came out on Thursday detailing why GBR would make such a big jump in value. But if we combine the overall bullish sentiment in the stock market right now with the bullish sentiment in energy stocks specifically, it begins to make more sense.
The company works as an operator of oil and gas wells throughout the U.S. This includes properties based in Ohio, West Virginia, and other states around the country. In its third-quarter results released back in November, the company posted a net income of around $0.43 per share. It also stated that it owns roughly 190 acres in West Virginia with 53,000 square feet of structures for use in production. Sadly, there isn’t too much information on New Concept Energy’s day to day operations.
But, we can assume that investors are bullish about the future of energy production in the U.S. Obviously, this would not lead to a 636% gain on its own, but technical trading has also played a role on Thursday. Keeping in mind how volatile GBR stock is, will it still be a penny stock to watch after Thursday’s closing bell?
Trading Energy Penny Stocks
It’s important to keep in mind that energy stocks are fickle. They can change as the prices of the underlying commodities change. This isn’t usually a steady change either. Many times we can see big fluctuations in energy stocks with knee-jerk reactions in the oil market itself. So if you’re looking at this sector, keep this in mind as volatility can play a large role from day-to-day.