Could These Penny Stocks Bounce Next Month?
With February fast approaching, investors are working out strategies to find the best penny stocks to buy. While this may seem difficult at first, it can be fairly straightforward with the right insights and research. In the past year and prior, investors have focused heavily on both fundamentals and speculation. But, with the trading that’s occurred in the past week, there is now a shift, leaning more toward speculation than anything else. For those who don’t know, this means that securities are trading more based on “what could be” than on the current company fundamentals. Now, we’re not here to say that fundamentals are useless by any means because it is quite the contrary.
But, during the last week, we’ve seen that retail investors are becoming a larger factor in market moves. What’s important is knowing what type of trader you are and how to best utilize these strategies. When it comes to penny stocks, we’re quite used to speculation and high volatility. Because penny stocks are ones under $5, they tend to make bigger moves than traditional blue-chip stocks. With these big moves comes the potential for both big gains and big losses. So as we turn the corner in January, here are four penny stocks to watch for February 2021.
Top Penny Stocks to Watch Next Week
- Iconix Brand Group Inc. (NASDAQ: ICON)
- Sos Ltd. (NYSE: SOS)
- Phunware Inc. (NASDAQ: PHUN)
- Rigel Pharmaceuticals Inc. (NASDAQ: RIGL)
Iconix Brand Group Inc.
One of the larger gainers of the day on January 29th was Iconix Brand Group Inc. By EOD, shares had jumped by roughly 67%, closing at $2.85 per share. Since the beginning of January, the brand management company’s shares have more than doubled to its current price. While you may not have heard of Iconix, the company licenses brands to retailers and manufacturers across the apparel industry. It holds the rights to brands that can be bought in stores like Kmart, Sears, Target, and others. Its brands include Joe Boxer, Ecko Unltd, Buffalo, and more. While a pandemic may seem like the wrong time to invest in an in-person clothing retailer, the company has shown high demand during this time.
In its third-quarter report, posted on November 16th, the company showed adjusted EBITDA of almost $14 million. While this is around $7 million less than the same quarter of the previous year, this can be attributed to the pandemic. Despite this, the company still posted revenue of roughly $24.5 million with a GAAP Operating Income of $66.4 million. The latter is quite important as it represents a massive jump from the $8 million loss it took in the same quarter of 2019.
Bob Galvin, CEO of Iconix, stated that “as we continue to navigate through the pandemic and the resulting economic conditions, the well being of our employees, licensees, and communities remains at the forefront. Despite Covid-19, we continued to expand our business, including a successful launch of Umbro products in Walmart.”
Sos Ltd. ADR
Another big gainer of the day was SOS stock, climbing roughly 27% by EOD. As of Friday, shares sit at a comfortable $3.04, which is more than double what it was at the end of 2020. The company works through its subsidiaries, providing high tech services in the data and emergency services market. Also, it works in the IoT, blockchain, and artificial intelligence markets. As you can see, Sos Ltd. is quite a broad company in its operations. And while many big daily gains go without news, Sos made an exciting announcement on January 29th. During trading, the company stated that it had completed the initial steps of its blockchain strategy.
This includes the successful development of cutting-edge biological info storage systems, firewall systems, antivirus, and AI. The Chairman of Sos, Yandai Wang, stated that “R&D is our lifeblood and our growth engine. We anticipate investing 15% of our revenue in R&D and the annual growth of R&D budget to be over 10% in each of the next five years.”
The company also stated that it had established a new subsidiary, known as Qingdao SOS Digital Technologies Inc. This group will focus on researching cryptocurrency to find new ways to utilize it in its business. As a tech company with hands in many industries, SOS could be a penny stock to watch next week.
To continue the theme of this article, Phunware is another company that posted major gains on Friday. During trading and into after-hours, shares of PHUN stock jumped by roughly 56%, ending the day at $2.08. We’ve discussed Phunware Inc. several times in the past few months for a variety of reasons. For one, PHUN stock has shown a lot of bullish momentum during that time, which has helped make it quite popular in the penny stock world. Also, Phunware has a relatively unique business model.
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The company provides multiscreen-as-a-service products across a large cloud platform. This allows its customers to engage in data licensing, transactions, location-based services, marketing automation, and more. Again, Phunware is quite a broad company working within the MaaS industry. As a tech and software business, Phunware has seen increased attention due to the pandemic. With Covid on the rise, business automation software has become ever more popular. While PHUN stock is highly speculative, it could be a penny stock to watch.
Rigel Pharmaceuticals Inc.
Rigel Pharmaceuticals Inc. is a biotech company that develops novel treatments for cancer and rare diseases. Also, the company works on hematologic disorders, where it holds several drugs currently in trials. In its pipeline, Rigel Pharmaceuticals has a large range of compounds, including Fostamatinib, which is in a Phase III trial to read autoimmune hemolytic anemia. More recently, the company has been working on the use of this drug to treat Covid-19. On Friday, a big announcement was made stating that Rigel had received roughly $16.5 million from the U.S. Department of Defense.
The goal of this deal is to support the Phase III trial of fostamatinib in hospitalized Covid patients. Currently, this drug is known in the U.S. as Tavalisse and is approved domestically and in Canada and Europe. On January 29th, Raul Rodriguez, CEO of Rigel, stated that “we are grateful to receive this funding from the DOD and for their demonstrated commitment towards finding safe and effective treatments for Covid-19 patients. These additional resources will contribute significantly to the advancement of our Phase III trial.”
With this information in mind, Rigel could be an important part of the Covid-biotech industry moving forward. But, investors should also consider the long term for RIGL stock. Whether or not this makes RIGL worth watching is up to you.