3 Penny Stocks to Watch in the Second Half of February
As we get started on another week of February, investors continue to seek out potentially valuable penny stocks. We first have to consider what impacts certain political and economic factors will have on penny stocks moving forward. For this reason, let’s take a look at some of the most significant events occurring right now.
The first and most obvious is the coronavirus. In the past few weeks, daily case numbers have declined significantly. Whether this is due to vaccine distribution or mask-wearing remains to be seen. But, this news is definitely positive for the reopening of the economy and trade.
Some investors believe that this will have a substantial effect on several industries. This includes energy, tech, manufacturing, and more. While we aren’t out of the woods yet, it does seem like things are going in the right direction. Moving into the rest of 2021, more industries will continue to highlight their potential forward value.
The second factor in play right now is the Biden presidency. Specifically the $1.9 trillion stimulus package as well as the potential legalization of cannabis. These two items have both been at the top of mind for penny stock investors. Last week, we saw many marijuana stocks jump greatly in value, and it seems as though this is only the beginning. With a stimulus package on the way, the hopes are that we could see a full economic recovery.
There are a few industries that have echoed this optimism, including biotech, energy, and technology. Given this as the case, here are 3 penny stocks trending in these sectors this month. Though they appear “cheap,” will they actually be the best stocks to buy?
Penny Stocks To Buy Under $3
- Color Star Technology Co Ltd. (NASDAQ: CSCW)
- 9 Meters Biopharma Inc. (NASDAQ: NMTR)
- Borr Drilling Ltd. (NYSE: BORR)
Color Star Technology Co Ltd.
Color Star may not be a familiar penny stock to some, but the company has seen more attention in the past few months than usual. The company is a provider of online and offline music and entertainment services in the U.S. and China. On its platform are celebrities and entertainers offering both educational and standard entertainment services. During the pandemic, the demand for these types of services has shot up dramatically. This makes sense given that most people are at home and will remain that way for the foreseeable future. Because of this, Color Star continues providing top-notch content for the long run. On Tuesday, February 16th, the company made an exciting announcement regarding some new film copyright acquisitions. Color Star acquired the rights to five films from a well-known Asian film company.
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The CEO of Color Star, Luke Lu, states that “a big part of the Company’s future strategy will be to produce and acquire copyrights. Building a large portfolio of copyrights will create competitive advantages for us in the marketplace. Each year, the global profits brought by copyright ownership is in the hundreds of millions of dollars. Copyrights are assets that usually will not expire for long periods of time. They may be continuously reproduced and generate strong recurring revenue.”
This is an interesting move for the company, as most platforms tend to lean toward original content. With this copyright deal, the company aims to expand its reach and include more entertainment offerings for its customers. Whether or not it succeeds in this regard remains to be seen. So far, however, the market has responded favorably to the news.
9 Meters Biopharma Inc.
NMTR is a penny stock that we’ve covered a handful of times in the past few months. Since late January, shares of NMTR stock have jumped by almost 100%, illustrating investors’ bullish sentiment in the biotech company. For some context, let’s take a look at what NMTR does on a day-to-day basis. In the past, 9 Meters operated by producing an extensive range of pharmaceuticals for gastroenterology settings. And while it still does engage in this, the company is currently utilizing one of its drugs to potentially treat Covid. The compound known as larazotide is a novel tight junction modulator and has shown efficacy in treating lung distress in Covid-19 patients.
A few months ago, the company announced that it would be working with the European Biomedical Research Institute of Salerno to study this compound. With positive results from a Phase I study, the company is now working on a Phase 2/3 program for Covid-19 patients. Obviously, this is quite promising for the company, given investors’ focus on covid-related biotech firms.
Meanwhile, the company is still working on its other drug research. A few weeks ago, the company released an update on the R&D of its drug for treating Short Bowel Syndrome or SBS. The drug in question is known as NM-002, and can be used to treat orphan diseases, and is currently in a Phase 2 trial to treat SBS. This week the company presents a corporate overview at the BIO CEO & Investor Conference.
Borr Drilling Ltd.
Borr Drilling is another penny stock that has experienced heightened popularity due to its role in the energy industry. The company is a contractor for offshore oil and gas operations. The company owns an extensive range of equipment that allows for the conducting of these large drilling operations. At the end of last year, the company stated that it held around 27 jack-up drilling rigs.
One of the reasons that investors tend to like BORR is its correlation to the energy industry. As virus cases decline, many traders are looking for options as things begin to open back up. If cases continue to trend down, there’s no doubt that demand for oil and gas would go up.
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Obviously, companies like Borr feel the lasting effects of the massive drop in demand that occurred last year. A few weeks ago, the company announced a $46 million offering. Fundraising methods like these are very common right now in the energy industry. To weather the proverbial storm that cornavirus brought & to sustain operations, it’s obviously important to maintain ample cash. Thanks to the momentum the oil and gas prices have experienced, BORR shares have also benefited. In light of this trend, will it continue the bullish move seen over the last 2 weeks?