Making A List Of Penny Stocks Right Now? 3 For Next Week’s Watch List
Tech penny stocks have not been the kindest to investors during the last full week of March. But with any bearish retreat, there is always a slew of traders looking to capitalize on the potential bounce trades.
What could also help give a little push next week is the bullish momentum we saw on Friday afternoon. It took all day, but before the closing bell, markets surged. In fact, if you took a half-day, you definitely missed the rally that took the S&P SPY and Dow DIA ETFs to levels within reach of all-time highs. Tech struggled a bit, but it too closed strongly last week. The SPDR Tech ETF (NYSE: XLK) jumped over 2.5% by Friday’s bell.
Why Are Stocks Going Up?
Last week was definitely a volatile one for stocks. But Friday saw its late afternoon surge thanks to news that restrictions on buybacks could be lifted by the end of June. The big question that I have is what happens on Monday? Will this same bullish sentiment remain in play?
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Something to note is that this broader move was felt only slightly by small-cap stocks. If you look at the Russell 2000 Small-Cap Index ETF (NYSE: IWM), it only rebounded by roughly 1.8% on Friday but finished the week down 9%. So when you’re looking for penny stocks to add to your watch list right now, it could be more of a stock-picker’s market than a sector or industry-wide case.
With this in mind, here are a few tech penny stocks that finished strong last week and can be bought for under $5 right now. But just because they’re “cheap,” does that mean they’re worth the risk?
Tech Penny Stocks to Buy [or avoid]
- BGC Partners Inc. (NASDAQ: BGCP)
- Kelso Technologies Inc. (NYSE: KIQ)
- Vinco Ventures Inc. (NASDAQ: BBIG)
BGC Partners Inc. (NASDAQ: BGCP)
One of the hotter areas of tech has been in financials. This fintech niche is wide-reaching and includes everything from cryptocurrency to brokers and anything in between. BGC Partners is a global brokerage firm that specializes in fintech. This includes brokering fixed-income rates and credit, foreign exchange, equities, energy, commodities, shipping, and much more.
It has several brands under the BGC Partners name, including BGC Trader, GFI, Fenics, Fenics Market Data, Capitalab, and several others. All of these compile to show that BGC is an extensive player in the financial tech marketplace. In its latest earnings report, BGC Partners showed revenue of $479 million. For the full year, this number jumps to $2.05 billion. While it reported a GAAP loss of $19.5 million, its adjusted EBITDA came in at over $107.9 million. This represents a post-tax EPS of $0.13 per share.
Over the course of the year, two of its subsidiaries, Lucera and Capitalab, grew by 45% and 27%, respectively, year-over-year. If we look at the report, we see that BGCP is growing at a substantial and stable rate. One of the interesting factors regarding the company’s model is just how broad it is. Since there’s been such a big focus on fintech lately, BGCP could be one of the names to have on your penny stocks watch list heading into the second quarter.
Kelso Technologies Inc. (NYSE: KIQ)
Kelso Technologies is a product development company specializing in tech made for transportation. This includes the supply of crucial assets such as rail tank car valve equipment and containers for the safe handling of hazardous and non-hazardous materials. It states that its products are intended to efficiently grow the companies it works with through operational advantages.
This includes mitigating the potential for human error in the transport sector. Last week, Kelso Technologies reported its full-year financial results for 2020. It brought in roughly $11.1 million in revenue with around $4.8 million in gross profit during the year. This puts it at a gross profit margin of a healthy 43%. While this revenue is less than in 2019, the company attributed this to the lessened demand for its products due to the pandemic.
Given that Kelso works primarily in the rail tank car industry, it is affected greatly by any global supply issues. In 2020, sales declined by around 46% over the previous year due to the pandemic. But, Kelso shows that it has a long-term game plan as well. By reducing its expenses by 5% for the year, the company states that it has remained cash flow positive.
While this isn’t your typical “tech” name, the technology behind its products could be something to keep in mind. According to IBISWorld*, the market size, measured by revenue, of the rail transportation industry is expected to be $68.5B in 2021. Furthermore, as manufacturing output increases thanks to economies reopening, demand for things like long-distance freight rail could increase. Utilizing Kelso’s technology to design and sell optimized solutions is something that may be important, especially when discussing the “reopening trade.”
Vinco Ventures Inc. (NASDAQ: BBIG)
Last month, a group of investors agreed to purchase an 80% controlling stake in TikTok competitor, Lomotif. This stake, worth $125 million, will be completed by Zash Global Media and Entertainment Corp. So what does this have to do with Vinco?
An announcement was made that it would take Zash public in a deal with Vinco. In short, Vinco is expected to merge with Zash, whereby Zash will engage in the Lomotif acquisition. The merger between Zash and Vinco made headlines back in January of this year but has not yet been completed.
With the emphasis on video-sharing from the popularity of TikTok, this deal could be huge for all parties involved. It’s also worth noting the team behind Zash. Ted Farnsworth, financier and former MoviePass Chairman, Jaeson Ma, an early Musical.ly (now TikTok) investor, and Vincent Butta, an early Triller (TikTok competitor) visionary and board member, have focused on building a digital portfolio.
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The figures behind Lomotif are something that has gained attention as well. These include 10+ billion Lomotif video atomic clips, a 210+ million lifetime community, & 300+ million videos watched on the platform per month, to name a few. This growth is one of the main reasons for the proposed acquisition. While it may take some time for everything to come to fruition, this is exciting news for the company. With this pending deal, Vinco could be a company to follow right now.
Penny Stocks To Watch Next Week
If you’re putting together your list of penny stocks today, make sure you look at the recent trends for certain niches. Things like fintech and the whole NFT craze are captivating attention right now. These are just a few of the penny stocks that could be on watch next week after a strong close on Friday.
End Notes:
https://www.ibisworld .com/industry-statistics/market-size/rail-transportation-united-states/
