Is It Time To Buy Penny Stocks After This Week’s Dip?
Looking for penny stocks to buy right now? If you said “yes,” you’re not alone. In fact, retail traders have seemingly been frothing at the mouth to find a sustainable trend in small-cap stocks lately. Last week finished strong with expectations that lower-priced stocks would gain some much-needed follow through. However, as I’m sure many of you saw, this wasn’t the case earlier this week.
In fact, not only did broader markets drop, so did small-caps. Look at the Russell 2000 Small-Cap ETF (NYSE: IWM) and the S&P Small-Cap ETF (NYSE: IJR). The IWM dropped as much as 2.6%, while the IJR slid by around 1%. In the grand scheme of things, this isn’t an earth-shattering pullback. Nor would I consider this anything remotely resembling a “correction.”
What I will say is that it was a gut check for some retail traders. Whether you’re calling them Reddit or Robinhood traders – maybe you’ve got your own definition of retail market participants – the idea that “stonks only go up” has been a pressure point for novice traders this year.
Are Reddit Penny Stocks The Only Thing To Watch?
Thanks to the pandemic, millions of newbies flooded the market, looking for exposure to what may have been the only money-making opportunity to take advantage of early last year. Fast-forward to this year, and most “stonks” have certainly just gone straight up, recovering hundreds and even thousands of percentage points at times.
What helped fuel the fire was the strong social sentiment originating from places like Reddit and Twitter. Who can forget the rise of GameStop (NYSE: GME) earlier this year? With that, however, has come more risks thanks to hype playing a short-lived role in 1 or 2-day breakouts.
Learning how to day trade has become even more important. Are all penny stocks on Reddit bad? No, but it’s important to do more than just read a post, then immediately buy penny stocks because of that post.
Now that reopening has begun, people are reentering the workforce, and fundamentals have begun to play a role. Meanwhile, more volatility has become prevalent in the stock market today. This means that things may not follow the rosey bullish trend we’ve come to find over the last 14 months.
In fact, I think that we clearly see that unfolding this month. The gap up and gap down from the day-to-day timeframe is enough to make the most experienced trader a little seasick. Nevertheless, there’s plenty of money to be made. Where someone is selling, someone else is buying, and in between, one of them is turning a profit.
Best Penny Stocks To Buy Right Now?
- Jaguar Health Inc. (NASDAQ: JAGX)
- Cyclerion Therapeutics Inc. (NASDAQ: CYCN)
- Kaixin Auto Holdings (NASDAQ: KXIN)
1. Jaguar Health Inc. (NASDAQ: JAGX)
Jaguar Health Inc. is a penny stock that we’ve covered numerous times in the past few months. And, shares of the biotech company moved up by around 7% on Friday, May 21st. While no major news was announced today, the company did provide an update from its Cancer-related Diarrhea abstracts submitted to the ASCO June 2021 Annual Meeting.
Now, it’s hard to imagine why this would result in such a large spike in value, but this is often the case with biotech penny stocks. Because they are more volatile than most, any news no matter how big or small the announcement may be.
For some context, Jaguar is a commercial-stage pharmaceutical company working on developing plant-based, non-opioid prescription medicines for GI disorders. These medicines are also sustainably derived which is a big part of Jaguar’s mission.
In addition, its wholly-owned subsidiary, Napo Pharmaceuticals Inc. works on producing and commercializing proprietary plant-based GI pharmaceuticals as well. Its main product, known as Mytesi, is one of the only plant-based, FDA-approved products for the symptomatic relief of non-infectious diarrhea.
This is a big deal and has helped to push the company deeper into the public eye. While JAGX is not a traditional biotech company as it relates to its products, it is a very interesting company. For this reason, it could be worth adding to your watchlist.
2. Cyclerion Therapeutics Inc. (NASDAQ: CYCN)
Another decent gainer of the day is Cyclerion Therapeutics Inc. By EOD, shares of CYCN had jumped by a modest 4%, to $3.13 per share. It’s worth noting that no specific news caused this jump, which is also quite common in biotech.
Often, we see that when an industry jumps in value or an industry-specific event occurs, many companies that either relate to it or don’t can also see spikes. While this may not be the case with CYCN, it’s worth diving into what the company does.
A few weeks ago, CEO and Director of Cyclerion, Peter Hecht, announced that he had boosted his holdings of CYCN by almost 310%. This is a large announcement and adds over $1.7 million worth of shares into his portfolio. When an insider buys shares, it’s always exciting for investors. While it doesn’t necessarily mean any big news is coming up, it is a sign of institutional confidence in a company.
Cyclerion is a clinical-stage biopharmaceutical company working on developing compounds to treat cognitive dysfunctions. This includes those used in CNS signaling, for ailments such as Alzheimer’s, Mitochondrial Encephalomyopathy, and more. The company has several ongoing trials at the current time which include those with its CY6463 and CY3018 compounds.
These both act as part of disrupting the cellular pathway that causes CNS disorders. Because of its large pipeline, many believe that CYCN could be well-positioned for the future. Whether it makes it onto your watchlist, however, is up to you.
3. Kaixin Auto Holdings (NASDAQ: KXIN)
Moving out of biotech for a moment, we see that Kaixin Auto Holdings is pushing up by around 7% by EOD. Before we go any further, it’s worth noting that there is a worldwide shortage of microprocessors. These are used in everything from electronics to you guessed it, cars.
Because of this, the price of used cars has shot up tremendously in the past few months. And, there is now a shortage of new automobiles as well. KXIN is a large owner of multiple dealerships in the used car market in China. It offers both online and offline car buying platforms that allow it to be one of the larger provides of automobiles in the country.
Recently, it announced that the NASDAQ approved the acquisition of Haitaoche Limited. This is a deal that was penned at the end of last year, so investors have been waiting anxiously to see progress. And, last week, the company announced that it had appointed two new members to its board, including a new chairman of the board.
The new Chairman, Mr. Mingjun Lin, states that “on behalf of my fellow directors, the Company’s management team, and shareholders, I would like to thank Joseph for the significant contributions he made during his service on Kaixin’s Board. We wish him the best in his future endeavors.”
With this new leadership in place, we could see the company move in a different and more effective direction. Considering this, is KXIN stock worth watching?
Are These Penny Stocks Worth It?
At the end of the day, finding the best penny stocks to buy is all about you and your portfolio. If volatility is not your thing, you may want to find penny stocks that could be better suited for long-term growth.
However, if you are looking for large intraday swings, there are plenty of penny stocks that could be worth watching. With this in mind, making a penny stocks watchlist is all about the individual investor. So, are these penny stocks worth it?