Are You Familiar With These Four Penny Stocks?
As we get ready to turn the corner in February, traders are constantly looking for the best penny stocks to buy. For some context, the term “penny stock” means any security that is trading under $5. Given that there are so many to choose from, traders have to be picky when creating a strong watchlist. One of the reasons that investors love penny stocks so much is the heightened potential for large gains. For example, if a penny stock goes from $0.10 to $0.20 in a day, that represents a 100% gain. If a $10 stock adds $0.10 in a day, that is a 1% gain.
With penny stocks, it’s also common to see large, double-digit gains during daily trading sessions due to how high volatility is. It’s worth noting that the potential for losses is also just as great with these securities. Ok, so now that’s out of the way, it comes down to knowing exactly where to look to find potential winners. With this, investors should utilize the same trading methods such as research, in order to compile a list of penny stocks to watch.
One thing that may be different for penny stocks than blue-chip stocks is that investors may want to watch their portfolios more closely. As stated earlier, these securities tend to be quite volatile, which means that quick jumps in price are very common. With all of this in mind, what do you think could be in store with some of these penny stocks?
Penny Stocks to Watch
- RCM Technologies Inc. (NASDAQ: RCMT)
- Camber Energy Inc. (NYSEAMERICAN: CEI)
- RealNetworks Inc. (NASDAQ: RNWK)
- Flotek Industries Inc. (NYSE: FTK)
RCM Technologies Inc.
On February 10th, shares of RCMT shot up by over 80% to almost $3.70 per share. Before we get into why RCMT stock gained, let’s take a closer look at the company. RCM Technologies is a business and tech solution provider working throughout North America. The company has three primary segments that it works within.
Those segments are engineering, specialty health care, and IT. Within these, RCM offers several products, including engineering analysis, 3D design, health care management, and a slew of others. As you can see, RCM has an extensive market in which it operates. The company has contracts in several different industries, including energy, defense, health care, financial services, tech, and education.
If you look carefully, you see that these are all industries that have been able to thrive during the pandemic for one reason or another. And while this doesn’t explain the gain on Wednesday, it does show why sentiment may be bullish. In the past few months, RCMT hasn’t released much in terms of news or press releases.
But this week was different. On Wednesday, the company provided an update on its recently obtained projects to help its clients produce higher grades of ethanol for use in beverage and hygienic applications. Think things like sanitizer-grade ethanol. The recent projects include USP Grade (US Pharmacopeia) and GNS Grade (Grain Neutral Spirits). Thermal Kinetics, a division of RCM, was contracted by Al-Corn Clean Fuels to build its existing Fuel Ethanol facility to produce 20,000,000 gallons per year of USP Grade Ethanol to meet demand. In light of this, it’s been a substantial gain on February 10th that could make it a penny stock to watch for some.
Camber Energy Inc.
CEI is a penny stock that we’ve been covering for many months at this point. As an independent oil and gas company, Camber Energy has taken full advantage of the increases in demand for energy as covid cases trend down. In the past month, the number of new covid cases in the U.S. has dropped significantly, showing that we could be on the right path.
Obviously, as we’ve seen, there’s no way to predict what will happen in the long term. But, we do see that there is a high correlation between covid and energy. If fewer people are contracting the illness, more people will be traveling and operating their vehicles. This means that the demand for fuel could rise in the short term. At the beginning of last year, CEI had proven reserves north of 133,000 million oil-equivalent barrels. This is quite a lot and could benefit once the world opens up in the long term.
Camber Energy announced that it had extinguished almost $19 million worth of debt about a month ago. This deal consists of Camber acquiring roughly $19 million worth of Viking Energy Group Inc. common stock, thus acquiring majority in the latter. James Doris, CEO of the two companies, stated that “this transaction further strengthens the relationship between Camber and Viking and moves us one step closer toward a full combination of the two entities. Moreover, extinguishing the $18.9 million of debt improves the equity position of both companies. This is a great start to 2021.”
One of the larger after hours gainers of the day on February 10th is RNWK stock. Up by around 21% for the day to $3.12 per share, RealNetworks is on many investors’ radars. While many sizable gains go unnoticed, RealNetworks announced its Q4 2020 earnings report after hours. In the report, the company brought in a net income of around $8.1 million.
This is a significant gain over the loss it reported during the same period in 2019. For the fourth quarter, EPS came in at around $0.21, which is quite good, in addition to reporting $17.6 million in revenue. For the total year, revenue came in at approximately $68.1 million. As you can see, this data is a big win for RealNetworks. But to see its full potential, let’s take a closer look at its business.
RealNetworks is a provider of digital media applications and services for a broad range of audiences. This includes its RealPlayer software, allowing users to download, manage, and edit digital video for streaming purposes. Also, the company offers mobile services that allow for similar uses. During the pandemic, tech and specifically software companies have seen a large jump in popularity.
Because it has shot up so dramatically in the past few weeks, it is worth noting that RNWK is quite volatile. But if volatility is what you’re after, RNWK could be a penny stock to watch.
Flotek Industries Inc.
Flotek Industries is another company that does not frequently put out press releases or announcements. Despite this, it is operating in an exciting market. Flotek is a company that provides chemistry and services for a wide variety of oil and gas operations in the U.S. and around the world. It specializes in the development and manufacturing of products for use in the extraction of fossil fuels.
Thus, it has a very high correlation to the ups and downs of the energy industry. And as stated earlier, we have seen a tremendous amount of long term bullish sentiment for oil and gas companies in the U.S. A few months ago, Flotek announced its Q3 results for the 2020 year. The company showed a lot of positive momentum in the works, despite being somewhat adversely affected by the pandemic.
John Gibson, Jr., CEO of Flotek, stated that “it has been a challenging period as we continue to navigate through this global market disruption as a result of the health crisis and demand destruction to the oversupply of crude oil. While our third-quarter performance showed some positive signals, we continued to face some headwinds in the business, and our results did not meet our expectations.”
While this may not have been good a few months ago, looking back, we see that FTK could have been at a value level. Now, as oil prices begin to move back up, FTK is once again in the penny stock spotlight. Given this, investors should keep a close eye on the oil and gas industry to see the potential value of FTK stock.