These Penny Stocks Were Climbing Strong During Monday’s Aftermarket Session
Penny stocks and risk go hand-in-hand. But rightfully so. These cheap stocks have been targeted by fraudsters in the past and became the targets of social media-fueled momentum. Volatility is where the bulk of this risk is. This is the rate at which penny stocks shift in price. One minute you might see a stock green 40%, and the next, it could be down 50%.
Understanding how to day trade comes in handy, especially when we’re talking about a class of stock defined by price. If you can handle big swings, however, these may be just the thing you’ve been looking for. GameStop (NYSE: GME), Express (NYSE: EXPR), and many other Reddit penny stocks demonstrated this in a big way this year.
The social media frenzy that sparked massive breakouts to the tune of thousands of percentage points emphasized why it can be beneficial to buy low-priced stocks. On the flip side, it also shined a very bright spotlight on the big risks involved too. Case in point, yes, GME stock ran big, but compare the all-time high from January and the current price levels. GameStop shares have come back more than 60%. Obviously, anyone who bought shares above $183 is down on their position, some in a big way.
How To Find Penny Stocks To Buy
The process of how to find penny stocks to buy is just as important as when to buy, in my opinion. Taking time to research a company, analyze its fundamentals, and observe market trends can be a huge help to both capitalize on momentum or suggest that it might not be the best idea, in which case your research can prevent you from getting into a losing trade. Some people will utilize technical analysis to find penny stocks to buy. Others will look for more fundamental developments like news and filings. No matter the case, understand why you’re buying.
Penny Stocks To Watch
With so much noise right now, it might be tough not to get FOMO (fear of missing out). But I will be the first to say, taking emotion out of trading is something that will save you money in the long-run. Have a strategy and put it to the test. Keeping this in mind, some stocks under $5 caught a strong uptrend after Monday’s closing bell. Could they be good penny stocks to watch before the next opening bell?
Novan Inc. (NASDAQ: NOVN)
One of the hot penny stocks to watch over the last year has been Novan. If you look back to March of 2020, shares were trading around 40 cents. It had just started generating buzz as a coronavirus stock. Fast-forward to this year, and the company is looking to begin preclinical studies for an intranasal formulation of its berdazimer sodium for its COVID-19 program, SB019, in the first quarter. Obviously, the clock is ticking on that timeframe. We’ve got a few days left before we turn the page on Q1.
Last quarter, Novan announced positive in vitro results showing the potential efficacy of its berdazimer sodium (NVN10000) as an anti-viral against SARS-CoV-2. The company started in vitro assessments targeting the reduction of viral burden in differentiated normal human bronchial epithelial cells. Even at low dosage levels, results showed that berdazimer sodium reduced 90% of the virus after repeat dosing, once daily.
Other than speculation on the timing of this, momentum has played a role this week. Once the market closed on March 29th, shares of NOVN stock began shooting higher. If you’re looking for trending biotech penny stocks to watch right now, this might fall on the list of names.
What helped this could have been the Form 4 filed after the close. It showed CEO Paula Stafford bought 70,000 shares of NOVN stock at an average price of $1.43 last Friday. This seemed to trigger a post-market breakout to highs of over $1.55, accompanied by strong volume. In light of the action, it could be on the pre-market list come Tuesday morning.
#2. Performant Financial Corporation (NASDAQ: PFMT)
Another one of the penny stocks jumping after Monday’s close was Performant Financial Corporation. There weren’t any insider trades to point to. But headlines were helping ignite a late afternoon move.
Performance reiterated its intention of focusing on future investments on long-term growth and profitability of its healthcare operations. The company justified this by pointing out the strong growth last year thanks to revenues of $68.5 million. That represented an increase of 58% compared to 2019.
“We expect revenues from our Healthcare market in 2021 will be in the range of $83 and $90 million , which represents continued strong top line growth, along with positive EBITDA for 2021. However, we expect to record cash charges of between $1.5 million and $2.5 million during the second and third quarters of 2021 consisting primarily of severance and labor costs, which will result in near-term pressure on our results.”Lisa Im, CEO of Performant.
In conjunction with this reiteration, Performant also announced that it signed a deal to sell its certain non-healthcare recovery contracts to a buyer specializing in outsourced receivables solutions. Needless to say, seeing PFMT stock jump like that during Monday’s aftermarket session could be something to make a note of heading into the rest of the week.
#3. SRAX Inc. (NASDAQ: SRAX)
If you remember last week and the week before, there was a growing trend in NFT penny stocks. These were typically companies with exposure to digital asset sales, blockchain technology, cryptocurrency, and the like. SRAX Inc. was one of the names that were caught up in the hype, which saw shares trade as high as $5.42 last week. Since then, the hype has lessened a bit. While SRAX doesn’t necessarily have a direct tie-in to the NFT craze, it focuses on financial technology. Specifically, its Sequire platform is used to track investor behaviors and trends to engage current and potential investors.
On the blockchain/crypto side, the company’s former subsidiary, BIGtoken, is a consumer data management and distribution system. BIG offers consumers choice, transparency, and compensation for their data, essentially allowing them to opt-in to receiving ads and get paid for them. The system also provides advertisers, and media companies access to transparent, verified consumer data to better-serve audiences. That company was spun out into its own public company this year.
SRAX stock jumped during Monday’s post-market session after releasing its Q4 and 2020 financials. Revenue was reported at $4.5 million, up 316% year-over-year. This also represented an increase of 74% sequentially, quarter-over-quarter. Full-year revenue guidance was also boosted to a range of $23 million – $25 million, up from the previous $17 million – $18 million range.
“We had another record quarter of bookings for Sequire. In the first quarter of 2021, we have closed over $10 million in contracts. This momentum is not slowing down, and we are growing the business to accommodate this demand,” said Christopher Miglino, Founder and CEO of SRAX. So on the heels of this milestone, SRAX could be one of the penny stocks to watch right now.