3 Cheap Penny Stocks for Your October Watchlist
There are plenty of cheap penny stocks to buy if you’re interested in small-caps. But, knowing where to look and which ones could be worth it is where the tough part comes in. For starters, the definition of penny stocks is any stock trading under $5 per share.
This means that the majority of them are quite cheap (depending on your definition of cheap). And as a result, investors can scoop up dozens of shares for the same price as one share of a blue chip stock. It’s also worth noting that penny stocks tend to be more volatile than most others.
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This is due to their low prices and the high rate at which they can be affected by speculation. For example, when news or an announcement comes out, often the underlying penny stock will move steeply in either direction. This news can be both company or industry related and can cause major price movements with little notice.
The best advice here is to find as much information as you can and research the ins and outs of the company you’re interested in. This will help to build an overall picture of how it could move in price in the near and distant future. In addition, investors should consider the current state of the stock market as this can help to identify where there could be value. With all of this in mind, let’s take a look at three cheap penny stocks to watch in October 2021.
3 Cheap Penny Stocks to Watch in October 2021
- New Oriental Education & Technology Group Inc. (NYSE: EDU)
- Federal National Mortgage Association (OTC: FNMA)
- ToughBuilt Industries Inc. (NASDAQ: TBLT)
New Oriental Education & Technology Group Inc. (NYSE: EDU)
New Oriental Education & Technology Group Inc. is a Chinese education stock that has climbed by over 35% in the past month alone. Despite an 85% YTD drop, shares of EDU stock are beginning to rise once again. For some context, this company offers K-12 AST services, test preparation, online education, and more. It offers test preparation courses to students taking entrance and language exams used in the U.S. In addiction, it provides language training courses for English, German, Korean, and more.
On August 18th, New Oriental Education & Technology Group Inc. provided an update on its regulatory development. This is after the Beijing Municipality Government and the Beijing Municipal Committee of the Communist Party of China jointly issued the “Beijing Municipality’s Measures to Further Reduce the Burden of Homework and After-School Tutoring on Students in Compulsory Education in Beijing”. This agreement is being shortened to the “Beijing Measures”.
New Oriental Education & Technology Group can no longer offer classes with content in advance of or outside of the current school curriculum. It also cannot hold classes during break periods, holidays, and weekends. Since the Beijing Measures went into effect, EDU stock has worked to come back from a sizable period of losses. And after dropping more than 60%, shares have begun to see a bullish turnaround. With this in mind, will EDU be on your penny stock watchlist?
Federal National Mortgage Association (OTC: FNMA)
Federal National Mortgage Association is a penny stock that has recently performed well in the market. In the past five days, shares of FNMA stock have shot up by over 23%, indicating that investors could be seeing value at its recent low price. If you’re not familiar, FNMA offers a wide range of mortgage products for its customers. It is also a government backed organization that has been doing so for decades. In addition, the company provides credit risk and loss management services. Its primary goal is to securitize home loans generated by lenders into Fannie Mae mortgage-backed securities.
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On October 19th, Fannie Mae priced a $1.2 billion Connecticut Avenue Securities REMIC Deal. The Series 2021-R01 deal is a $1.2 billion note offering showing Fannie Mae’s first CAS REMIC transaction this year. CAS is the company’s benchmark issuance program to share credit risk on its single-family conventional guaranty book of business.
“We are pleased with the execution of CAS 2021-R01, which was met with strong investor demand across all classes. Subject to market conditions, we look forward to returning to market next month with CAS 2021-R02, a high-LTV transaction.”
The Senior VP of Single-Family Capital Markets at Fannie Mae, Devang Doshi
Since this took place, FNMA stock has gone from $0.85 per share to $0.95 per share on average. Considering this, will FNMA stock be on your October watchlist?
ToughBuilt Industries Inc. (NASDAQ: TBLT)
ToughBuilt Industries Inc. is another penny stock that has been making some big moves in the last few trading days. Over the past five, shares of TBLT stock have climbed by a respectable 15%. ToughBuilt has benefitted greatly with the increase in construction and home improvement projects as a result of the pandemic. And as a provider of tools and related products, ToughBuilt looks like it could continue to take advantage of the current situation. Its products are sold around the world in both commercial and retail settings. ToughBuilt is involved in the design, development, manufacturing, and distribution of these products.
On October 12th, the company announced a huge update. ToughBuilt stated that its gross sales through Amazon.com climbed by 101% in the nine months ending September 30th, 2021, compared to the year prior. This supports ToughBuilt’s vision of showing the strength of its e-commerce segment.
“We experienced strong e-commerce demand in the third quarter, despite continued industry-wide supply chain disruptions. Our decision to increase inventory levels in the prior quarter enabled us to fulfill the high order volume on Amazon across our product lines.”
The CEO of ToughBuilt, Michael Panosian
Ecommerce is a major industry right now, and is offering companies a way to continue seeing revenue during the pandemic. With the ease of access to ToughBuilt’s tools, it could continue to take advantage of this high growth strategy. Noting this info, will TBLT be on your list of penny stocks to watch?
Which Penny Stocks Are You Watching Right Now?
Finding the best penny stocks to buy in 2021 can be challenging. But, with so many to choose from, making the choice all comes down to understanding your own unique investing style.
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In addition, investors should have a thorough idea of the current state of the stock market and what it could look like moving forward. With all of this in mind, which penny stocks are you watching right now?
