The Federal Open Market Committee (FOMC) held its November meeting this week. Everything from penny stocks to blue-chip stocks was in focus. On the broader message from the Fed, there will be tapering of bond-buying starting this month, which will complete in June.
However, the scope of the bond-buying isn’t as large as some had expected. In addition, traders were looking at details on the future of interest rates and any hikes that could ensue. For now, rates aren’t changing. However, comments made by Fed Chair Jerome Powell gave further clarity on the details of this week’s FOMC meeting.
As markets flip-flopped with volatility and fought for direction, retail traders shifted focus to some lower-priced stocks. One of the significant parts about penny stocks is that they tend to move independently and are less tied to the broader market moves. Of course, this isn’t always the case, and there are plenty of stocks that break this “rule.” With attention on small-cap stocks heading into the second half of this week, we’ll look at four that seem to have gained some interest on Fed Day.
Penny Stocks To Watch
- Kala Pharmaceuticals (NASDA:KALA)
- Digital Brands Group (NASDAQ:DBGI)
- Clear Channel Outdoor Holdings (NYSE:CCO)
- Liquidia Corporation (NASDAQ:LQDA)
Penny Stocks To Watch #1. Kala Pharmaceuticals (NASDA:KALA)
You’ll notice if you read our articles that we’ve recently discussed many of these penny stocks. Our goal is to find trends and dive into why certain companies are doing what they’re doing in the stock market. Of course, if a trend persists, we aim to cover it as long as possible.
Kala Pharmaceuticals is the first example. At the start of the month, I mentioned this company on a list of short squeeze penny stocks to watch. While this remains a high short interest stock thanks to an 18.5% short float percentage (according to Fintel data), there are other things to keep track of with KALA stock.
In particular, Kala’s commercialization platform targeting eye diseases has come into focus. Its EYSUVIS® treatment is for dry eye disease, and INVELTYS®is a treatment of post-operative inflammation and pain following ocular surgery. In line with a focus on further expanding its commercial progress, the company recently appointed C. Daniel Myers to its Board. With more than 35 years of industry expertise, he brings plenty of knowledge to the table. In an October release, Mr. Myers explained, “I look forward to collaborating with the management team and the other members of Kala’s Board, and to offering my perspective on strategic initiatives including the expansion of Kala’s pipeline.”
Heading into November, this could be a point of interest for the market.
2. Digital Brands Group (NASDAQ:DBGI)
Another “short squeeze” penny stock we’ve discussed is Digital Brands Group. As the name suggests, the company specializes in building digital brands, mainly focused on e-commerce. Digital Brands discussed revenue growth and record eCommerce revenue jumping year-over-year in one of its most recent updates. This came as the company launched its digital advertising with the Bailey 44 and DSTLD brands for the first time in over a year.
A quick follow-up to this highlighted the company’s Amazon Prime launch in tandem with an affiliate program. Its DSTLD brand moved past the “on-boarding” stage with Amazon Prime resulting in products ready for sale on Amazon Prime. CEO Hil Davis explained that the company is prepared to “finally move into [its] growth phase” and believes “these programs will show the power of our platform and the growth opportunity for Q4 of 2021 and 2022.”
This week, momentum continues carrying DBGI stock higher as it breaks back above the $3.80 level following the FOMC meeting.
3. Clear Channel Outdoor Holdings (NYSE:CCO)
Tuesday Clear Channel Outdoor was in focus thanks to growing attention on penny stocks to buy, according to analysts. Firms like TD Securities are bullish on the stock and placed a Buy rating on CCO. As far as price targets go, the range is between $2.50 and $3.15 among firms that have issued them.
If you’re unfamiliar, Clear Channel is an outdoor advertising company. You’ve likely seen billboards with the Clear Channel logo on the bottom indicating such. While the economy continues reopening, traditional advertising methods are gaining steam. If you look at Q2 results, Clear Channel realized revenue growth year-over-year that was 36% higher. In addition to this, it beat earnings estimates set by Wall Street. Analysts expected $496.2 million, while Clear Channel reported more than $531 million.
Now, the market is focused on continued growth. Next week, on November 9, the company releases its Q3 results. In July, the company outlined its Q3 guidance citing $315-$325 million for revenue in the Americas and European revenue in a range of $245-$255 million. These figures will likely be in focus heading into next week.
4. Liquidia Corporation (NASDAQ:LQDA)
Shares of Liquidia caught a substantial spike ahead of key catalysts this week. The company’s stock hit fresh 2021 highs. Liquidia specializes in treatments for pulmonary hypertension and other applications of its PRINT® Technology. We discussed this company at the beginning of the month because November marks an important period for Liquidia.
In the article, “5 Penny Stocks To Watch For November With Potential Biotech Catalysts” we discussed this in more detail. The FDA accepted a New Drug Application for its LIQ861 treatment earlier this year. This is the company’s inhaled dry powder formulation of treprostinil in treating pulmonary arterial hypertension. On November 7, the company has its Prescription Drug User Fee Act date.
If you reference Liquidia’s June update, it states that “If the FDA determines, following its substantive review of the NDA, that all requirements for approval have been met, the FDA may issue tentative approval on a timeline generally informed by the PDUFA goal date.”
If LQDA stock is on your list, November 7 will be a date to keep in mind. This could also pose a considerable risk should results come short of expectations (another thing to consider).
Time To Buy Penny Stocks?
Whether you’re building a penny stock watch list or looking for trends to play, having your strategy in mind from the start is essential. Knowing what events are coming in the future, different topics traders focus on, and current technology trends can help make your decision-making more manageable. The goal is to make money with penny stocks and repeat that process, and your plan can set help set you up for success.
If you’re new to trading, feel free to check out some of our other articles to get you started:
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