Analysts Are Bullish On These Penny Stocks
Looking for penny stocks to buy right now? You’re not alone. These cheap stocks have taken center stage this year as traders’ appetites for risk have dramatically increased. Whether you’re looking for Reddit penny stocks to buy or simply the cheapest stocks on Robinhood, the goal is the same: make money & repeat the process.
This may be easier said than done. But it hasn’t stopped millions of new traders from jumping into the markets over the last year. In 2020, the pandemic inadvertently evolved the stock market’s makeup. Where the majority of “smart money” was ruled by hedge funds and institutions, now, we’ve seen “the retail investor” take back some control.
The Meme Stock Breakout of 2021 placed a magnifying glass on this phenomenon. Shares of GameStop caught the attention of thousands of Redditors who took a page out of the movie “The 300” to “fight back” at “the suits” in pursuit of sweet tendies. And “tendies” there were. But it wasn’t just GME that fried up gains. The memery also focused on names like Express, Koss Corp, Nokia, and many others.
With this newfound ability to impact markets, more traders have continued to dip their toes in these volatile waters. We’ve also found that outside of Reddit stocks, small-cap stocks & penny stocks have gained significant ground this year. Taking a look at the year-to-date gains or losses from major benchmark ETFs, it’s clear that strength has built behind smaller companies:
| ETF | YTD % Change (@3/11 Close) |
|---|---|
| IWM (Russell) | +17.5% |
| DIA (Dow) | +6% |
| SPY (S&P) | +4.8% |
| QQQ (Invesco Nasdaq) | +0.9% |
Do Analysts Like Penny Stocks?
Aside from retail traders flocking to penny stocks, the question was posed whether analysts support these smaller companies or not. The answer is yes, and several penny stocks have begun turning heads after a flurry of recent upgrades and price targets.
- Seelos Therapeutics (NASDAQ: SEEL)
- Selecta Biosciences (NASDAQ: SELB)
- Ceragon Networks (NASDAQ: CRNT)
- Drive Shack (NYSE: DS)
Penny Stocks To Buy [According To BTIG Research]:
This week shares of Seelos Therapeutics stock continued climbing higher after the last few weeks of selling off. One of the things that have kept the penny stock in the spotlight is its recent positioning as a psychedelic stock. The newly launched PSYK Psychedelic ETF carries its heaviest weighted position in SEEL stock.
One of the reasons that the biotech company has fallen into this category is its pipeline treatments, SLS-002 (intranasal racemic ketamine) for Acute Suicidal Ideation and Behavior. The company states that it should have open-label data from an efficacy and safety study by the second quarter.
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While the company has made much progress, the focus at the end of the week is on analysts. In particular, BTIG Research. The firm initiated coverage on Seelos, starting it with a Buy rating. The firm also issued a $14 price target, joining other firms like Roth Capital expecting a move into double-digit values. Based on Thursday’s closing price, this latest rating puts BTIG’s forecast price 360% higher.
Penny Stocks to Buy [According To Mizuho]: Selecta Biosciences
Selecta has been on our list of penny stocks for months as progress has helped spark a multi-leg rally since October. This period saw SELB stock climb from around $1.50 to highs of $5.70 this year. Like most stocks since mid-February, SELB slid for the last few weeks. However, over the past week, the stock has been back on the rise. This week several key highlights have triggered continued momentum in the market.
Thursday, Selecta reported its Q4 and full-year 2020 financials. It also gave a business update. The immunotherapy company’s President and CEO, Carsten Brunn, Ph.D., explained, “In 2020, we significantly de-risked the company through a strategic partnership with Sobi for SEL-212, under which we commenced the Phase 3 DISSOLVE program in the third quarter of 2020. We rapidly advanced our pipeline, having recently dosed our first subject with ImmTOR in combination with an AAV capsid, which builds on compelling non-human primate data announced earlier this year.”
This has all lead to a bullish outlook from analysts. Mizuho currently has SELB at a buy. The firm’s price target is also 105% higher than Thursday’s closing price, set at $8. What’s more, following this up was William Blair which upgraded Selecta this week. The firm has the company at Outperform, up from Market Perform previously.
Penny Stocks To Buy [According To Oppenheimer]: Ceragon Networks
Similar to Selecta, Ceragon experienced a similar sell-off period during the second half of February and into March. Shares dropped from over $6.20 to lows of $3.40 last week. Since then, however, CRNT stock has been bouncing back. Thursday afternoon it closed at $4.17 as it continued climbing back toward the 50-day moving average.
This week Ceragon announced a big update, which has also helped give things a boost. The communications technology company announced that its products and services were selected by a Colombian Tier-1 operator with a large presence in Latin America to support extensive 4G and future 5G network capacity. Ceragon was also tasked with establishing the wireless backbone for a large-scale government-sponsored rural connectivity project. How big of a deal was this? Ceragon and the operator entered into a series of agreements with a total value “exceeding $26 million” for 2021 and 2022.
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Achievements like this have also turned heads in the analyst community as well. Oppenheimer boosted its rating last month from Perform to Outperform. It also set a price target 55% higher than recent closing prices at $6.50. Furthermore, this week, analysts at Needham upgraded Ceragon to Hold from Underperform. Though it wasn’t a “Buy” rating, an upgrade is usually taken as a bullish sign.
Penny Stocks To Buy [According To B. Riley]: Drive Shack
One of the mainstays on our lists of reopening stocks has been Drive Shack. The golf-centric entertainment/food and beverage company has gained significant ground since the early days of the pandemic. At its lowest, DS stock traded at $0.86 last March. Fast-forward a year and as of Thursday’s close, shares sat at $2.66. This move has come at a time where Drive Shack is in expansion mode.
While the company operates a series of driving ranges, it has recently focused on building a footprint in a different niche of the sport. In particular, the company is rolling out the launch of its Puttery locations this year. Part of this roll-out included a recent partnership with famed golf star Rory McIlroy. He will invest in the future growth of Puttery through his investment vehicle, Symphony Ventures.
This week the company reported earnings. President and Chief Executive Officer Hana Khouri, “Our revenue driving initiatives and continued expense control discipline contributed to the positive Adjusted EBITDA results of $5.3 million this quarter, a $7.4 million improvement compared to the same quarter last year. With the challenging year faced by many in 2020, the quick reaction by our team across the entire organization to adapt to the new environment and re-stabilize the business positioned us to advance our growth priorities through the year.”
Right now B. Riley analysts have DS sock at a Buy with a $5.50 price target.
