Should These Penny Stocks Be On Your May Watchlist?

As penny stock investors look to find value in the market, which companies should be on your May watchlist? Well, this is a tough question to answer simply. So, let’s break it down into a few parts. The first aspect to think about is what type of investor are you. 

In the most basic understanding, there are two types of penny stock traders. Those who invest in the short term and those who invest in the long term. While one strategy is not better than the other, before picking any penny stocks you should have a thorough understanding of which one you are. This is because different penny stocks to buy can be better suited to different time frames. 

[Read More] Best Penny Stocks to Buy Right Now? 3 Tech Stocks For April 2021

For example, a budding biotech stock could have a compound in a Phase 3 trial which means it’s on its way to commercialization. This would indicate that there could be long-term potential with this company. However, a tech penny stock that trades highly off of speculation, could be better suited to short-term or swing trading. 

And as we enter into May, we are seeing higher volume with stocks under $5 for a variety of reasons. Now, it’s also important to do the proper research before investing. This means knowing the financials of a company, the speculative factors impacting it, and any information relating to the industry it works in. 

While this is not by any means a definitive list of penny stock fundamentals, it should help to get you on the right track. With all of this in mind, let’s take a look at three penny stocks with huge potential in May 2021. 

3 Penny Stocks to Watch Right Now 

  1. Farmmi Inc. (NASDAQ: FAMI
  2. Ashford Hospitality Trust Inc. (NYSE: AHT
  3. Sonnet BioTherapeutics Holdings Inc. (NASDAQ: SONN

Farmmi Inc. (NASDAQ: FAMI) 

Farmmi Inc. is as its name lightly implies, an agricultural products supplier based in China. It offers processing and retail sales of Shiitake mushrooms, Mu Er mushrooms, and other edible fungi products. While shares of FAMI stock plunged a few days ago, presumably on tensions between President Biden and President Xi Jinping, many investors are waiting to see if the bulls will come in. 

Only a few days ago, the company entered into a sizable stock offering of 140 million shares at $0.30 per share. While this is normal, it’s interesting that the price of this offering was around $0.80 less than the level that FAMI stock was trading at when the offering was announced.

There’s no clear answer as to why the company would offer shares at such a discounted price, however it could undoubtedly lead to share dilution. However, if we move past this, we can look at what else Farmmi has been up to. In late April, the company announced that its subsidiary Zhejiang Forest Food Co Ltd. scored a multi-product order from Japan for several of its mushroom products. 

“Japan is one of the world’s top markets for us with consumers using mushrooms in a wide variety of foods and soups. We are benefitting from higher sales demand globally related to a prioritization of health and wellness. This includes the addition of mushrooms into healthy diets given they are a preferred source of protein, vitamins and a natural, delicious substitute for meat.”

The CEO of Farmmi, Ms. Yefang Zhang

With all of this in mind, it’s not easy to decide whether FAMI should be on your penny stock watchlist. However, the choice is yours. 

Penny_Stocks_to_Watch_Farmmi Inc. (FAMI Stock Chart)

Ashford Hospitality Trust Inc. (NYSE: AHT) 

AHT is a company that we’ve covered numerous times in the past few months. While a lot of this has been because of its sizable gains, AHT also has an interesting business model that’s worth considering.

Before we get into it, let’s take a closer look at Ashford Hospitality. The company operates as a REIT or real estate investment trust, which is relatively straightforward. This means that it purchases properties that are then leased out to those specifically in the upscale, hospitality market. 

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Now, the effects of the pandemic have not been the best for AHT. However, the company has managed to overcome this. It recently launched the Ashford App, which allows REIT-focused investors to communicate and form communities with one another.

Additionally, Ashford will be coming out with its Q1 quarterly results on May 5th at midday. This could be a make or break announcement for investors. Only a few months ago, the company announced a sizable financing deal worth $200 million, with an additional $250 million if needed. 

“We’re excited to announce the closing of this strategic financing with Oaktree and believe this partnership will beneficial for the Company moving forward. With this important financing now closed and vaccine distribution ramping up, we look forward to getting our hotels back to profitability and focusing on growth.”

CEO of Ashford Hospitality Trust, J. Robison Hayes

AHT has a large correlation with the pandemic as a reopening penny stock. So, if case numbers continue to decline, we could see positive momentum with Ashford. Whether AHT stock is worth watching is up to you. 

Penny_Stocks_to_Watch_Ashford Hospitality Trust Inc. (AHT Stock Chart)

Sonnet BioTherapeutics Holdings Inc. (NASDAQ: SONN) 

Sonnet is a pure-play biotech penny stock working in the field of oncology. It produces a proprietary platform used in creating biologic drugs. This platform, known as FHAT or Fully Human Albumin Binding, uses a fully human single-chain antibody fragment to target certain tissues for treatment. FHAT can be used for a large range of needs including large molecule therapeutics, cytokines, peptides, antibodies, and vaccines. 

On Monday, May 3rd, Sonnet announced the completion of a licensing agreement with New Life Therapeutics Ltd. This agreement is for the licensing of a low-dose Interleukin 6 that can be used to treat Diabetic Peripheral Neuropathy or DPN. Under the terms, New Life will distribute the compound across ASEAN countries which includes Singapore, Malaysia, Indonesia, Thailand, The Philippines, Cambodia, Brunei, Vietnam, Myanmar, and Lao PDR. 

The founder and CEO of Sonnet, Pankaj Mohan, stated that “we are excited about the opportunity to partner with NLT to advance our diabetic peripheral neuropathy program. The agreement affords Sonnet reach into territories with compelling commercial market dynamics, and also removes some of the development burdens from the Company. Most importantly, this is one step closer to a new treatment to benefit patients suffering from diabetic peripheral neuropathy.” 

Because this is a condition with not many available treatments, Sonnet could have a large market opportunity in this space. Whether or not commercialization can occur quickly remains to be seen. Considering all of this, is SONN a penny stock to watch?

Penny_Stocks_to_Watch_Sonnet BioTherapeutics Holdings Inc. (SONN Stock Chart)

Are These Penny Stocks Worth Watching?

While this is not a definitive list of penny stocks to buy, it is an interesting group of companies. Again, at the end of the day investors need to understand what their goals are. This is the best way to ensure that the companies you’re looking at are right for you.

[Read More] Penny Stocks Watchlists and How to Make One

With so many penny stocks to watch right now, it can be overwhelming for those without a dense trading education. But, the entrance of finding penny stocks on Robinhood and other accessible brokerages, has effectively democratized trading. Considering all of this, which penny stocks will you be watching in May 2021?

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