4 Penny Stocks to Watch as the Market Tries To Recover
During the last week of February, the market gods have not been kind to the broader markets. While many penny stocks have escaped unscathed, it seems as though there is a lot of uncertainty right now. On Tuesday, February 23rd, markets got off to a weak start. With the S&P 500 dropping substantially during morning trading, markets were back at a neutral point by the end of the day.
This large intraday gain from lows reflects Federal Reserve Chairman Jerome Powell’s speech on the economic outlook in the U.S. Powell stated that the Fed is not at all considering pulling back on economic aid. Because of this, the Nasdaq 100 was able to nearly erase this intra-day daily loss.
Powell went on to say that stimulus will continue and that the economy should move closer to a version of normalcy within the next few months. Because of the massive U.S. spending in addition to vaccines, Powell’s outlook on the future of the American economy remains very positive.
This is an overwhelmingly reassuring sentiment for investors to hear. In the past few months, volatility has hit extremely high levels, pushing uncertainty up with it. While we are not in any way out of the woods yet, fears could subside inflation and a recession. This is where penny stocks have come into play.
Robinhood Traders Get Behind The Rally
While “paper hands” panic sold during the early morning breakdown, other Robinhood retail trading army members doubled down on everything from biotech to cannabis. Despite the pullback, many of the millions of new traders saw opportunities to buy dips in select sectors. So far, on Wednesday, this rebound in stocks has managed to sustain itself. Will that remain the case until the end of the month?
Robinhood Penny Stocks to Watch
- Akebia Therapeutics Inc. (NASDAQ: AKBA)
- Kelso Technologies Inc. (NYSE: KIQ)
- ConforMIS Inc. (NASDAQ: CFMS)
- Zomedica Corp. (NYSE: ZOM)
Akebia Therapeutics Inc.
AKBA is an interesting biotech penny stock. Akebia is working specifically in the area of kidney disease. While not much news has come out of the company in the past few weeks, it did publish a study back in November of last year. This study, titled Global Phase 3 Inno2VATE Program Rationale, was published to help identify if HFI-PHI can be used to treat chronic kidney disease-related anemia.
Steven Burke, the Chief Medical Officer at Akebia, stated that “achieving the first publication of a manuscript on the design of our global Phase 3 program focused on a HIF-PHI for anemia in a well regarded, peer reviewed nephrology journal is an important achievement for our company.”
Having entries into popular medical publications is something that is very important for biotech companies. Given that it is based on a Phase 3 trial, it looks like AKBA could be coming closer to having an approved substance on the market. Obviously, it will take some time before anything is finalized.
Much of the hype surrounding AKBA stock right now seems to be stemming from its upcoming fourth-quarter financial results. The company stated that it would release these on February 25th before the market open.
Kelso Technologies Inc.
Kelso Technologies Inc. is a designer and distributor of proprietary service equipment that is utilized in the transport industry. Specifically, the company produces everything from rail tank car valves, to safe handling materials for transport purposes. Only a few weeks ago, the company announced a non-brokered private placement worth around CA$6.3 million. With this, the company will sell roughly 7 million units at a price of $0.90 per unit.
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James E. Bond, CEO of Kelso, stated that “Kelso is a proven product development organization that over the past decade has successfully designed, engineered and sold proprietary products for transportation related applications. This Private Placement is the first time since September 2012 that Kelso has sought to access new equity capital from the investment community to help finance the Company’s ongoing R&D business development plans. The company has generated over $120 million in revenue at above average profit margins over the past decade.”
Considering that energy fuels are gaining ground, supply chain companies could be a focus; think picks and shovels. Kelso is designing safeguards against the accidental release of hazardous materials like ethanol and propane. This, according to management, could present new market opportunities.
ConforMIS Inc.
CFMS is a Robinhood penny stock that we’ve covered for many months at this point. Before we get to what ConforMIS has been up to lately, let’s talk about what the company does. ConforMIS is a biotech company working in the joint replacement sector. This includes implants, cruciate-retaining products, and full knee replacements. The company has a large pipeline of these products that it sells to a variety of countries around the world. This month the company raised roughly $85 million before expenses. With these funds, the company can engage further in product research and development and clinical studies, among other things.
In addition to this, the FDA granted 510(K) approval for its iTotal Identity Cruciate Retaining Knee Replacement System. This was announced on February 22nd during early trading. This is an exciting piece of news, as it should allow ConforMIS to further commercialize this new product. With any FDA approval, companies will often see bullish trends following.
We should consider that it takes time for the successful rollout of this product on a large scale. But in the meantime, CFMS still has a lot going on for itself. YTD, shares of CFMS stock are up by over 87%. This serves to illustrate just how bullish some investors are on the biotech company.
Zomedica Corp.
Zomedica Corp. is another company that we’ve been covering for several months now. Although ZOM stock can be quite volatile, investors have continued to show bullish interest in it. While it is a biotech company, it works differently than most others. Zomedica is a producer of diagnostic products for use in animals.
Only a few weeks ago, Zomedica announced the closing of a $173.5 million bought deal offering. The deal, which will sell roughly 91.3 million shares at $1.90 per share, should improve ZOM’s capital position. Now, we have to consider that this is quite a large fundraising opportunity. And relative to its size, $173 million is no small chunk of change. Because of this, investors should be aware of the potential for share dilution.
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However, in the meantime, ZOM is still working on commercializing its TRUFORMA product, which is set for the end of next month. So, with this large fundraising opportunity, Zomedica could be in a position to ramp up ahead of this proposed commercialization. Zomedica has earmarked funds for everything from R&D to making milestone payments for some outstanding debt that it holds.
