4 Penny Stocks That Traders Are Watching This Week
As we turn the corner on the third week of February, there are plenty of penny stocks to watch. This week, the major penny stock winners have been biotech and many smaller technology-driven companies. This seems to be thematic with the past few months as trading has focused on these areas. You might be wondering why that is the case, so let’s take a look at each industry respectively.
With biotech, the case is quite simple. In the past year, the pandemic has resulted in a massive capital influx into the biotech industry. This includes both biotech penny stocks, which makes sense given both the investors’ attention on the industry and the financial support that certain companies have received from federal funding. While case numbers are trending down, investors expect the pandemic to continue in the foreseeable future.
You’ve also got to remember that, though broader tech may have gotten some pressure recently, small-cap stocks continue to hold the spotlight. When to factor in things like cryptocurrency and blockchain, that bearish sentiment for broader IT turns a bit more bullish in light of recent bitcoin prices.
Are You Looking For Penny Stocks To Buy?
Considering the climate for penny stocks in general, it may not be a bad idea to have a basic watch list put together. Here are a few names that saw a surge in activity late Wednesday afternoon. Will they be on your list of penny stocks to buy right now or avoid entirely?
- Caladrius Biosciences Inc. (NASDAQ: CLBS)
- Professional Diversity Network Inc. (NASDAQ: IPDN)
- Stealth BioTherapeutics Corp. (NASDAQ: MITO)
- SenesTech Inc. (NASDAQ: SNES)
Caladrius Biosciences Inc.
While you may not have heard of CLBS stock, the company has been making big waves in the past few months. Caladrius is a biopharmaceutical company working on a variety of cellular disease therapies. This includes several treatments that allow the body to heal itself. Its pipeline includes products such as CLBS16, which is currently in a Phase 2a study to observe its efficacy in treating coronary microvascular dysfunction. The company also has several other compounds in various stages. On February 17th, Caladrius made an exciting funding announcement. At the end of the day on Wednesday, Caladrius stated that it has closed on a $65 million registered direct offering that will be priced at the market.
The deal consists of roughly 1.63 million shares in addition to the previously announced 24 million or so shares. This is something that we see quite often in the biotech industry. As stated many times, biotech companies run on capital while awaiting governmental approval for compounds. As a clinical-stage biopharmaceutical company, Caladrius depends on either selling the rights to its compounds or funding opportunities like these to bring in capital. Obviously, with an offering this large, investors could have some concern regarding share dilution. But in the longer-term, these funds should help Caladrius build upon its pipeline.
Professional Diversity Network Inc.
After shooting up by over $4 on February 17th, IPDN stock returns to many investors’ radars. Since October of last year, shares of IPDN are up by over 330%. This represents both a bullish interest from investors and confidence in the company’s business practice. While no announcement sparked the Feb 17th rally, let’s look at what IPDN does.
As its name suggests, Professional Diversity Network operates online platforms that offer training, networking, and educational portals for both employees and employers. PDN acts as a sort of HR company, allowing for underrepresented groups’ professional development in the workplace. While it doesn’t put out many releases, the company made an exciting announcement before the end of 2020.
In December, IPDN stated that it had partnered with Phala Network to develop a new blockchain-based platform. This platform would allow for enhanced privacy and a more concrete way for its system to be utilized. Adam He, CEO of PDN, states that “we are excited to partner with Phala Network to explore potential integration of substrate-based, confidential smart contract blockchain technology into our PDN network, which would potentially enhance our delivery rate and protect network users’ and clients data privacy from data-mining.”
Considering the attention that the digital currency and blockchain tech space are receiving right now, has IPDN gotten folded into this mix? It will be interesting to see if the market continues its bullish stance heading into the end of the week.
Stealth BioTherapeutics Corp.
One of the interesting and lesser-known biotech penny stocks is Stealth BioTherapeutics Corp. Like many other biotech companies, MITO has been working on several fundraising initiatives to secure capital. Before we get into the specifics, let’s explore what Stealth BioTherapeutics does. The clinical-stage biotech company works on a large range of novel therapies. These compounds are used to treat many diseases, and specifically for those suffering from mitochondrial dysfunction. A few weeks ago, the company was granted a Type B meeting with the FDA for its SPIBA-201 treatment for Barths Syndrome.
Reenie McCarthy, CEO of Stealth, stated that “we are encouraged by the agency’s acceptance of our Pre-NDA meeting request. We are keenly aware of the urgent unmet need facing the Barth Syndrome community as described in the recent petition signed by over 4,000 members of the Barth community and addressed to the FDA and us.”
A week ago, the company announced the pricing of a $4.7 million registered direct offering of American depository shares. At $2, the company will sell roughly 2.339 million shares to raise new capital. Stealth said it intends to use the net proceeds from this offering to fund the continued clinical development of its elamipretide platform.
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On Wednesday, a 13D filing came out showing a sizable stake in the company made by Morningside Venture Investments. The firm reported a 70% stake in the company, which sparked a strong surge of post-market momentum.
SenesTech Inc. is different than all the other penny stocks in this list in the industry it operates in. The company is a producer of technology used in the control of animal pest problems. This includes its ContraPest product, which is a liquid bait that targets the reproduction of small rodents. Also, the company has products aimed at animal health, such as non-surgical spay tools and more. While this may seem like a niche industry, SenesTech has managed to build a name for itself. A few months ago, the company announced its latest operating results for the third quarter of 2020. In the results, the company posted a 114% increase in sales over Q3 2019.
CEO Ken Siegel stated that “we continued to achieve traction during the third quarter in the awareness and deployment of ContraPest, which resulted in a 114% increase in sales over the prior-year period. Perhaps most notable during the quarter was the passing of the California Ecosystems Protection Act of 2020, otherwise known as AB 1788, which will prohibit the use of four major Second Generation Anticoagulent Rodenticides (SGARs) commonly used in rodent pest control under many circumstances.”
What’s more, analysts have gotten more bullish on the stock. The most recent rating came from H.C. Wainwright which started SenesTech at a Buy. The firm also issued a $4 price target. Will that same underlying bullishness translate into the market this month?
Penny Stocks & Volatility
Penny stocks have been incredible in 2021. But keep in mind that volatility has played a huge role. Look at stocks like Comstock Mining earlier today. Shares gapped up over 300% during premarket trading. Those same shares were nearly 50% off those same highs within the same trading session by the closing bell. While not all penny stocks perform similarly, it is important to understand both the risk and reward of choosing to buy penny stocks. With that in mind, will any of these names be on your watch list before next week?