Why Are Investors Watching These 3 Penny Stocks Right Now?
Over the past few weeks, penny stocks and the broader stock market have experienced solid momentum. In March alone, we have seen both the Dow and S&P 500 reach record highs. If you look at their respective ETFs, The Dow (NYSE: DIA) and the S&P 500 ETF (NYSE: SPY) continued trading near these record levels for most of Tuesday’s session. While this is probably a result of the large $1.9 trillion stimulus package, there seems to be a larger feeling of confidence in the market right now.
With $1,400 stimulus checks hitting right now, analysts have hopes for retail sales to recover. With more retail investors than ever, we could see an influx of capital into the stock market. On the other hand, some investors believe that this stimulus and the prior stimulus will result in long-term inflationary effects.
There are still headwinds that remain and have shaken nerves a bit. Last week, investors watched as the benchmark 10-yr Treasury yields reached a high of 1.6%. This was up by around 50 points over the month prior. However, with so many bullish factors at play in the market right now, there are plenty of opportunities for traders to capitalize upon. One of the things to be cognizant of is that speculation has played a large role this year in driving momentum for certain stocks. One of the most popular asset classes where this can compound volatility is with penny stocks. Let’s take a peek at some of the cheaper stocks to watch right now.
Penny Stocks to Watch in March
- Teligent Inc. (NASDAQ: TLGT)
- GTT Communications Inc. (NYSE: GTT)
- Drive Shack Inc. (NYSE: DS)
Teligent Inc.
Teligent Inc. is a biotech company specializing in the production of generic pharmaceuticals. In its most recent quarterly report for Q3 2020, the company reported solid growth over the second quarter of the year. Specifically, Teligent brought in revenue north of $14.3 million, representing a 6% increase over the previous quarter. Additionally, Teligent reported a gross profit of $0.1 million, a decrease of $2.4 million over the previous quarter.
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The company stated that this decrease is due to large research expenses. Also, it is attributed to API write-offs for several canceled development programs. Most notably, the company brought in an EBITDA gain of $4.1 million, which represents a $6.3 million increase over the previous quarter.
Over the past few months, Teligent has worked on repositioning its business to ensure greater long term profitability. This includes several capital raising operations that have gone on over the past three months.
CEO Tim Sawyer explained that this marked “a pivotal step in our journey toward securing a strong financial future for Teligent, and we are grateful for the continued support of our lenders and noteholders as we work to achieve this goal. Over the past 12 months, we have taken significant strides to reduce our debt burden while addressing market trends and operational hurdles that have challenged our business.”
GTT Communications Inc.
GTT is a tech company providing a broad range of services to its global clients. On March 16th, the company announced Dave Salustri as its new Division President, Americas, and Tom Homer as Division Presidents, Europe. CEO Ernie Ortega expanded on these appointments saying that “the extensive industry experience that Dave Salustri and Tom Homer offer, combined with their distinguished track records of achievement, is precisely the seasoned leadership talent that will enable GTT to exceed the business objectives of our two main divisions.”
GTT has been working on the development and commercialization of its global Tier 1 internet network, in addition to its large cloud suite. Its product pipeline includes virtual private LAN service, high bandwidth internet, managed equipment and security, and others. The company operates across five continents where it works with private businesses, governments, transport, and other industries.
While the U.S. makes up more than 40% of its revenue, it is focused on pushing its European boundaries to increase market share. As a communications company, GTT has not been adversely affected by the pandemic as other industries have. With all of this in mind, including the push for advancements in telecom, in general, GTT could be one of the penny stocks to watch right now.
Drive Shack Inc.
Drive Shack is a company that we have discussed quite frequently in the past few months. Shares of the entertainment penny stock jumped substantially this week after the company announced its fourth-quarter results. Before we get into the numbers, let’s take a closer look at the company.
Drive Shack is an owner and operator of a large range of leisure and entertainment properties. This includes entertainment golf venues, traditional golf properties, and its new Puttery concept.
In its fourth-quarter report, the company posted an EPS of $0.13. This is compared to a loss it took during the previous fourth quarter of $0.25 per share. Additionally, revenue solidly beat out expectations of $55.7 million, coming in at $60.3 million for the quarter.
While this year-over-year decline of 16% is something to keep in mind, we have to consider the pandemic’s effects. This is more so given that Drive Shack is an entertainment company that thrives off of in-person revenue. The company stated in the report that “the strong momentum and demand for traditional golf continued for American Gold throughout the fourth quarter of 2020.”
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The company also managed to bring in an EBITDA of $5.3 million, illustrating a strong financial position. This is in comparison to an EBITDA loss of $2.1 million in the same period last year. Investors had also considered DS to be one of the reopening penny stocks to watch because it was hit heavily when the pandemic struck. Now, some are betting on the short and long-term future of the company. With this in mind, DS stock could be worth watching as states continue reopening their economies.
