Should Tech Penny Stocks Be Part Of Your Strategy In August?
Penny stocks are something every trader comes across at one point in their career. Whether it’s seeking out a quick way to turn a profit or getting into a growth company early, there are plenty of reasons why these cheap stocks have an appeal. A question that we continue to see come up during the summer is: Are penny stocks worth it?
Beauty is in the eye of the beholder. But the simple answer is yes, penny stocks are worth it if you know what you’re doing. Obviously, anything worthwhile is worth spending some time learning. You wouldn’t be expected to perform surgery without first knowing how to do it properly. So why think that trading should be any different?
Needless to say, once you know how to trade penny stocks, seeking out opportunities is the next step. One of the best performing industries over the past few months has been in tech stocks. The landscape has drastically changed thanks to the pandemic. Many companies have shifted their tech strategy to move more things online and to a virtual platform.
Top Tech Penny Stocks To Watch For August
Everything from entertainment to sports has seen this become a factor. In this article, we’ll take a closer look at a few tech penny stocks to watch in August that fit this mold.
- Alpha Esports Tech (OTC: APTEF) (CSE: ALPA)
- Cinedigm Corporation (NASDAQ: CIDM)
- Digital Brands Group Inc. (NASDAQ: DBGI)
Alpha Esports Tech (OTC: APTEF) (CSE: ALPA)
Traditional sports took a backseat during the early days of the pandemic. This opened a big window of opportunity for new types of “sports entertainment” to emerge. In this case, Esports began filling that role. Believe it or not, it has become one of the faster-growing parts of tech, and according to recent data, that growth may just be getting started. Revenues from competitive gaming are set to be just shy of US$1.1 billion by the end of this year, according to market researcher Newzoo.1
Meanwhile, major brands & influencers are getting behind this new movement. Everyone from Michale Jordan to DJ Marshmello has thrown their hat in the ring. In this light, the Esports industry and companies in it may be considered part of the early stages of development still. Earlier this year, Alpha Esports Tech, for instance, made its public debut and has since been rolling out a large-scale growth initiative to build its global footprint. A mix of new platform launches and partnership deals has helped bring attention to the company.
The company’s platform is based on building an active community of dedicated gamers. Not only can they play and watch games alongside their peers. They can compete in tournaments to earn prizes through daily tournaments. At the heart of it all, Alpha’s GamersArena+. It stores gameplay and statistical data on each participating gamer, allowing users to monitor and improve their skills. There’s also a clear path for some to become professional gamers.
Building Beyond Traditional Esports
Like professional contact sports, GamersArena+ allows scouts from several universities and professional Esports teams to find raw talent from the company’s pool of premium gamers. The company also launched GamerzYouth & GamerzArcade for young, amateur, and casual gamers to participate. Through its partnerships with companies like Mack Sporting, GamerzArena can tap into Madden, F1, 2K, and more esports events. Beyond hosting events, the company is also anticipating activation of iGaming or online betting centered on its esports platform.
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Alpha’s data already estimates that 10-20% of GamerzArena freemium users will place head-to-head bets with an average bet size of $2-$10 per math per month. At the company’s 10% service fee, that could boil down to revenue of over $5 million just for this one vertical.2 That’s assuming a $6 wager per month from just 15% of the company’s 500,000 user goal by the 4th quarter of 2021.
Cinedigm Corporation (NASDAQ: CIDM)
Another part of tech that has flourished thanks to the pandemic is entertainment. Cinedigm is an entertainment streaming company. However, unlike companies like Netflix or Hulu, Cinedigm offers more branded content networks. These include the Dove Channel, The Bob Ross Channel, GameToon, FashionBox, Comedy Dynamics, Docurama, and others.
Most recently, the company signed a deal with Robert Rodriguez’s El Rey Network. Known for his films, From Dusk Till Dawn, Sin City, Spy Kids, & Machete, Rodriguez and FactoryMade Ventures will offer the latest ad-supported channel to the Cinedigm platform.
“As audiences move deliberately to streaming, it was important for me to democratize our platform so that the masses have the opportunity to see themselves in our lineup of curated, inclusive and entertaining content. This is a huge win in every way, and I want to thank Cinedigm for putting fans first with this new alliance.”Robert Rodriguez
Thanks to the pivot to more streaming offerings and cord-cutting by consumers, networks remain a core driver for digital entertainment. Cinedigm has emerged as a provider with listed partners on its website, including Comcast, DirecTV, iTunes, Showtime, and others.
Digital Brands Group Inc. (NASDAQ: DBGI)
Shares of Digital Brands Group have popped a bit this week following a pull-back last week. The company offers a collection of digital brands supporting online sales and e-commerce initiatives.
The digital retail and direct-to-consumer models have grown in popularity thanks, in part, to the pandemic. Think of this as somewhat of an incubator or accelerator for luxury & lifestyle brands. The goal is simple, which is to build these into competitive platforms in a digital-first setting.
This week could be an important one for the company. It’s set to report its second-quarter earnings on Thursday. This will also mark the second financial report released since DBGI shares debuted on the Nasdaq earlier this year. In its first-quarter results, Digital Brands reported a loss per share of $4.55 with Q1 revenue of just over $408 thousand.
Furthermore, the company said it expected improved results for Q2 and a more significant improvement in the third and fourth quarters. This week will reveal whether or not Digital is on pace to meet or exceed these expectations.
Tech Penny Stocks To Watch This Month
There are plenty of other outliers to keep track of right now especially considering the overall trend in tech. Despite being slightly down this week, overall, technology stocks have performed well this year. In fact, tech (based on the XLK ETF) is up over 17% since the beginning of 2021. Based on the growth outlook, some expect the sector to continue flourishing in light of a lower rate environment in the near term. Should that end up as the case, there could be plenty of tech penny stocks to watch heading into the second half of the year.
- NewZoo Data: https://newzoo. com/insights/trend-reports/newzoos-global-esports-live-streaming-market-report-2021-free-version
- $5.4 M Revenue per year: Alpha Esports May 2021 Investor Deck
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