When we see geopolitical events in the stock market, it’s essential to pay attention. With the invasion of Ukraine by Russia, the world is now paying close attention. With that has come a ton of uncertainty, confusion, and fear, but all is not lost; you need to know where to look. If we’re talking about global conflicts like the Russia-Ukraine conflict, you’ll probably find some bullish action energy and defense stocks.
Companies providing services and fulfilling government contracts or producing oil and natural gas have historically benefited from things like wars, conflicts, and the like. In this instance, other types of “energy stocks” may be in focus if they’ve got exposure to nuclear power. Also, safe-havens might flourish under these conditions. These include precious metals like gold and silver. Furthermore, with “new world” military tactics, including cyberattacks, it might not be a bad idea to pay attention to some tech names within the sector either. Today we look at a handful of penny stocks to watch as Russia has invaded Ukraine.
Penny Stocks To Watch
- IronNet Inc. (NYSE: IRNT)
- Globalstar (NYSE: GSAT)
- Denison Mines Corporation (NYSE: DNN)
- Kosmos Energy (NYSE: KOS)
- Sypris Solutions Inc. (NASDAQ: SYPR)
IronNet Inc. (NYSE: IRNT)
IronNet management was featured on CNBC this morning discussing the outlook on cybersecurity threats. IronNet is a cybersecurity company developing its Collective Defense platform. Its team comprises former NDA cybersecurity professionals integrating “deep tradecraft knowledge” into its products.
The company recently secured several global-scale deals, including one in Singapore for healthcare and finance customers. The company also secured agreements with “a Gulf Cooperation Council Country” providing defense for national infrastructure. IronNet’s AI-based Network Detection and Response solution, in addition to its Collective Defense Platform, will facilitate real-time cyber defense for key ministries and companies.
General (Ret.) Keith Alexander, Co-CEO and Founder of IronNet, “Enabling public-private partnerships is a critical part of helping this country strengthen their cybersecurity posture in the face of escalating cyber threats.”
Given the potential for cyberwarfare to become a factor with the Ukrainian invasion, related companies, including IronNet, could be on traders’ watch lists this week.
Globalstar (NYSE: GSAT)
Shares of Globalstar shot higher today on the back of the Ukrainian invasion news. Thanks to its business model, the company is heavily involved in government contract fulfillment. Globalstar provides things like GPS services and satellite-powered intelligence platforms for improving operational efficiencies.
One of the things helping extend optimism in GSAT stock is some recent news from the company. Globalstar signed a new contract with Macdonald, Dettwiler, and Associates Corporation (MDA), where Globalstar will acquire 17 new satellites to extend the life of its existing constellation. This $327 million deal also allows the company to acquire up to another nine more satellites.
Given the current market sentiment state, defense stocks are in focus. Satellite companies, including Globalstar, have come into a brighter spotlight as a result.
Denison Mines Corporation (NYSE: DNN)
Nuclear warfare is an unfortunate side-effect of the current conflict. Discussions on “what could happen if” are now folding in the possibility of nuclear weapons. With that, speculators are looking at some raw materials companies, including uranium miners.
Denison Mines is among the growing list of penny stocks gaining momentum. The company is focused its efforts in the Athabasca Basin area of Saskatchewan, Canada, and holds a 95% interest in the Wheeler River project. The company explores for uranium deposits and, of its most recent update, expressed a strong position at Wheeler River. In particular, Denison announced that three drill holes were completed late last year, which returned intervals of high-grade uranium mineralization.
This news came shortly after the company announced that its McLean Lake operation (which Denison owns 22.5% of) was approved for expanding its tailings management facility. David Cates, Denison’s President & CEO, commented, “The McClean Lake mill remains a strategically significant asset in the Athabasca Basin region – representing the only uranium milling facility currently operating in Canada. The amendment to the operating license for the McClean Lake Operation allows for the expansion of the TMF, such that the facility will be well-positioned to serve as a regional milling center for current and future uranium mining projects in the eastern portion of the Athabasca Basin for many years to come.”
With a focus on nuclear warfare, DNN stock could be one of the names to watch as speculation continues.
Kosmos Energy (NYSE: KOS)
Traditional oil and gas are also part of the conversation in the stock market today. Earlier this week, we discussed the company in our article “Best Penny Stocks To Buy? 3 Energy Stocks To Watch As Markets Drop.” As discussed, Kosmos completed drilling at its Winterfell-2 appraisal well in the Gulf. In a January PR, CEO Andrew G. Inglis explained that “The positive result from Winterfell-2 appraisal well demonstrates the greater potential in the Winterfell area. The well results are encouraging and provide the support needed to advance a low-cost, lower-carbon development scheme that could be brought online in around two years.”
With the global oil demand strain at the forefront, it’s no wonder why oil stocks are surging today. KOS stock has jumped another 12% during the morning session on Thursday. Something else to keep in mind is Kosmos has earnings coming up next week. The company most likely will look to regain some of its strength after reporting a sales miss last quarter despite its jump in earnings per share for Q3.
Sypris Solutions Inc. (NASDAQ: SYPR)
Another one of the companies focused on defense contracts is Sypris Solutions. Earlier this month, the company won a follow-on contract from a U.S. Department of Defense prime contractor. No terms were disclosed. The company plans on manufacturing and testing electronic power supply modules for mission-critical precision-guided missile systems.
The contract calls for an increase in production volume from current levels starting this year. In particular, this program was based on meeting the needs of U.S. Navy and Air Force warfighters. Mark R. Kane, Vice President & General Manager of Sypris Electronics, explained, “Our customer is a worldwide leader in the development and delivery of advanced technologies for the commercial and military electronics markets. We look forward to many more years of continued partnership with this valued customer.”
With a surge of interest in wartime stocks, Sypris has gained a bit more momentum in the stock market this week. The biggest question is whether or not the Russia-Ukraine conflict sparks further interest in companies like Sypris in the near term.
Are Penny Stocks Worth It?
When speculation meets emotional trading, there are many things to consider. Penny stocks, in particular, are some of the most volatile in the market regardless of broader market conditions. It’s vital to have a plan to determine a course of action and profit from quick swings. Are penny stocks worth it? The first thing to do to get this answer: start with learning how to trade, so you understand how to gain an edge no matter the current market conditions. New to penny stocks? Check out some of these articles: