Penny Stocks On Reddit Are Hot, But These Are Making New Highs
Penny stocks on Reddit have become a hot topic of discussion this year. That’s because of what happened in January. Droves of retail traders flocked to social media for trade ideas, and Reddit became a big nest for millions of new traders.
This was when we started seeing the “rise of the retail trader” take the market by storm. GameStop (NYSE: GME) lead the charge, initially triggered by a short-squeeze. It has now become the monicker for countless mom and pop traders seeking profit in the stock market today.
The rise of the video game retailer’s stock was a catalyst for many other stocks to break out. It didn’t matter if it was penny stocks or higher-priced names like Tesla (NASDAQ: TSLA) and Palantir (NYSE: PLTR) took flight. Big names seeing massive breakouts have become somewhat of a norm in 2021. So, where does this leave us right now?
Heading into the end of Q1 and the start of Q2, there’s more than Reddit penny stocks to watch. Social media, in general, has brought the markets closer than ever. While it has always been around, what happened earlier this year has become an eye-opener to many who just didn’t put the two things (stock market & social media) together. While there are still plenty of trending penny stocks on Reddit, there are many others that have gained ground outside of that platform. Many of these are making fresh highs this week
Penny Stocks To Watch
- Drive Shack (NYSE: DS)
- Trivago (NASDAQ: TRVG)
- Express Inc. (NYSE: EXPR)
- Denison Mines Corporation (NYSE: DNN)
Drive Shack (DS)
Something that will be relatively consistent with this list of penny stocks is most companies have a potential benefit to reopening. This idea of epicenter stocks and “the reopening trade” stems from the fact that vaccine distribution could lead to economies restarting. It’s been more than a year since the pandemic, and analysts like Fundstrat’s Tom Lee have pinpointed certain trends that could bring momentum to certain stocks in light of this happening.
Drive Shack, for example, operates a golf experience business. Its offering includes driving ranges and miniature golf, with the latter planned to launch this year. Last Friday, the company reported its Q4 and 2020 results.
President and Chief Executive Officer Hana Khouri, explained, “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…As we look ahead into 2021, our focus remains on strategic priorities to drive growth and profitability, including the launch and expansion of Puttery, capturing market share using data and analytics, growing brand awareness, and advancing technology and innovation to remain at the forefront in our space…We believe 2021 will be a momentous year for us that is carried by a team that sets us apart and will drive us forward.”
With its current model and the planned launch of Puttery, DS could be one of the penny stocks to watch that isn’t getting overly hyped on social media right now.
Another one of the companies that could be caught up in the reopening trade is Trivago. The company’s model centers around hotel booking and getting customers the best-perceived deals. Obviously, with travel stocks taking the brunt of the pandemic sell-off last year, TRVG stock was taken down with it. The penny stock reached a low of $1.25 as a bleak outlook continued pressuring the sector last year.
Now that this is not the case, we’ve seen an uptick in many travel penny stocks, TRVG included. Since November, TRVG stock has managed to climb as high as $5.88. Granted, it was caught up in the Reddit penny stock hype earlier in the year. Despite this as the case, after settling around $2.30 in February, shares have been steady uptrend. This week TRVG stock breached the $5 level for the first time since January.
Last week, founder Peter Vinnemeier filed an updated 13D showing a stake of over 7%. TRVG could be one of the penny stocks to watch this month with strong support from insiders and momentum building from reopening sentiment.
Express Inc. (EXPR)
Unlike Trivago, Express has been more directly exposed to the Reddit hype this year. Shares of EXPR stock skyrocketed to highs of $13.97 in January amid the social media buying frenzy. Though it settled back down around $2.40, EPXR stock never ended up breaking below its 50-day moving average. Whether or not this remains the case is to be seen. However, right now Express has maintained a stronger uptrend throughout March.
Again, Express could also be benefiting from the excitement surrounding the reopening trade. The clothing retailer has managed to weather the storm that the pandemic created for brick and mortar businesses. Moreover, Express has evolved even more as a result, now taking up a brick-and-click model to further drive sales.
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The company has even targeted 2024 to finalize a strategy to grow its digital channel to $1 billion. In its latest quarterly report, Express delivered increases in traffic, conversion, and transactions in eCommerce in Q4. With a driven focus on expanding its eCommerce footprint in addition to a potential reopening of things like malls and shopping centers, Express could be a company to watch this year.
Denison Mines Corporation (DNN)
Alternative, renewable, green, clean are all topics of discussion this year regarding energy stocks. Denison Mines is unique in this niche due to its positioning in the nuclear power sector. One of the Biden administration initiatives has focused on boosting things like nuclear energy to expand on infrastructure.
According to a report done by the Nuclear Innovation Alliance, “even with the recent growth in wind and solar power, nuclear energy still provides more carbon-free electricity nationwide than all other sources combined.”
The company has implemented a plan to de-risk its mining assets while streamlining the overall uranium extraction process. Its Wheeler River project also received independent confirmation of ‘Proof of Concept.’ This was for applying its In-Situ Recovery (ISR) mining method at the high-grade Phoenix deposit.
“With the Environmental Assessment process fully resumed, and a $21.8 million budget (Denison’s share $19.4 million ) approved and funded for evaluation and environmental assessment work at Wheeler River in 2021, the entire team is now focused on advancing Phoenix through the regulatory and community consultation process to support a future Feasibility Study, with the objective of pairing Phoenix, the world’s highest grade undeveloped uranium deposit, with ISR mining, the world’s lowest-cost uranium mining method,” said David Cates, Denison’s President, and CEO, in a press release earlier this month.
This week the company was added to the S&P/TSX Composite Index as well. So with more exposure to the market as well as the uptrend that energy stocks are experiencing, DNN could be on the list of penny stocks to watch this month.