There’s Blood In The Streets, But Opportunity Could Be Presenting Itself With Penny Stocks
What’s your strategy for finding the best penny stocks to buy? At the top of my mind, there are a few things to look at. One of them is industry sentiment. Several industries have continued showing bullish sentiment even in light of recent market downtrends. This seems to stem from the various factors that are at play in the world right now.
With the election of President Biden, many investors have become bullish on things like energy penny stocks. Furthermore, with Jerome Powell speaking this week, markets appear to remain cautious. But just because there’s blood in the streets right now, that doesn’t mean opportunities are gone. You need to know where to look for momentum.
Because of this, investors are now searching for penny stocks that could have bullish sentiment beyond their relation to the pandemic or lack thereof. With this in mind, traders have been moving toward industries like the ones mentioned above. Also, we have to consider the pandemic’s economic impact as it relates to the long term. With $1.9 trillion on the table in stimulus, inflation has become a point of interest. This is where we’ve found financial stocks and financial technology stocks also gaining in recent weeks.
Aside from the macro ideology, we’ve got an animal spirit to consider in retail trade. When you start hearing the least likely of people discussing stocks to buy, that might suggest market froth and, in turn, volatility. This past week has shown such a trend. So if you are taking a stab at these markets right now, from a short-term take, I would be prepared for big swings in short periods of time. With penny stocks, or any stock for that matter, it is always a balance between speculation and fundamentals. So if we can find a company that has positives on both of these, it could be worth watching. With that in mind, are these 3 penny stocks on your watchlist?
Penny Stocks To Watch
- Yunhong CTI Ltd. (NASDAQ: CTIB)
- Sunesis Pharmaceuticals Inc. (NASDAQ: SNSS)
- Color Star Technology Co. (NASDAQ: CSCW)
Yunhong CTI Ltd.
This is an interesting company that we’ve discussed a few times over the last year. Yunhong CTI produces foil balloons as well as candy blossoms and other gift items. While this industry may seem small, Yunhong covers a large portion of the party supply market. Additionally, it provides these products around the U.S., China, and in other countries worldwide. A few weeks ago, the company announced a $1.5 million private placement of series c convertible preferred stock.
Jennifer Connerty, CFO of Yunhong CTI, stated that “we view this equity investment as a strong vote of confidence by our Chairman and largest shareholder, Mr. Li, as we continue to see positive results from our enhanced manufacturing capabilities coupled with our focus on profitable, growth-oriented product lines. The additional liquidity also supports our ability to meet growing customer demand for our foil novelty balloons as we prepare for our seasonally strongest customer demand.”
Something else that we see as a recent trend is momentum behind Chinese penny stocks. Or rather, attention on public companies based in China. This will be somewhat of a trend for a few names on this list of penny stocks. Due to their typically lower floats and the ability for big swings, historically, companies like CTI could be a trend right now. However, if CTIB stock is on your list, remember that low float penny stocks are inherently volatile, so risk comes in the form of dramatic shifts in price during very short periods of time.
Sunesis Pharmaceuticals Inc.
Another one of the companies we’ve discussed over the last few months has been Sunesis Pharmaceuticals. Shares of SNSS stock surged during premarket trading on Tuesday, thanks to analysts upgrading the stock. Oppenheimer upgraded Sunesis to Outperform. The firm also announced a $12 price target. Considering that SNSS shares closed Monday’s session at $3.56, this represents an analyst price forecast on SNSS stock of more than 230%.
The revised analyst rating and price target come just about a week after the company announced that its merger partner, Viracta Therapeutics, reported notice of allowance for a U.S. Patent Application. In particular, the application covers the use of its combination product candidate to treat Epstein-Barr-associated lymphoma.
The two companies announced a definitive merger agreement last November to form a company focused on building a pipeline targeting virus-associated malignancies. This transaction is expected to close sometime this quarter. However, if it isn’t closed by May 29th, it may be terminated by either party.
Color Star Technology Co.
Shares of Color Star Technology were also up pre-market on Tuesday after headlines. The company announced a $26 million financing round to raise capital for Color Star to upgrade to develop AI, AR, and mixed reality technologies for creating virtual communities for its software application.
When the company launched its Color Star app, it focused on virtual interactions with celebrities. Fast-forward to this year, and the Company is now creating AI with blockchain technology. Its current collaborations with developers focus on creating applications for 3D virtual reality technology for online concerts.
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Aside from this new directive, the specifics of the financing are also in focus. Where companies typically raise funds at a discount to market, sending shares lower, Color Star did something different. The company’s latest $26 million raise was done at $1.30. Compared to its Monday closing price of $0.912, this is a premium of over 40%.
Penny Stocks Today
The stock market today is in a highly volatile state. When you throw penny stocks into the mix, that can easily compound. If history serves as a guide when markets are uncertain small caps gain attention from traders. However, that attention can be fleeting, with short-term trading taking the place of longer-term swings or investments, in general. So if you are looking for penny stocks to buy right now, don’t forget that rapid price fluctuations can be an important factor in your strategy.