With the Ukraine invasion bringing more uncertainty to the stock market today, volatility is once again driving trends. One of the more prevalent is in energy. Overnight, oil prices retested highs of nearly $100 thanks to the constrained supply resulting from additional sanctions threatening Russia’s commodity exports.
As they say, “The trend is your friend,” and even with the stock market down today, specific sectors, including energy, are trading much higher. It isn’t just higher-priced names either. Energy’s surge has also affected penny stocks. Last week we discussed the potential of a bigger move in smaller oil and gas and nuclear power-related companies.
Penny Stocks To Buy
Thanks to increased volatility today, there’s no shortage of penny stocks to watch. Today we look at four that can be bought for under $5. Remember that just because they’re “low priced” doesn’t mean they aren’t risky. In light of the Ukraine invasion and growing uncertainty originating from Russia, here are a few energy penny stocks to take a closer look at:
- U.S. Energy Corp. (NASDAQ: USEG)
- Enservco Corporation (NYSE: ENSV)
- Denison Mines Corp. (NYSE: DNN)
- Gevo Inc. (NASDAQ: GEVO)
- Tellurian Inc. (NYSE: TELL)
1. U.S. Energy Corp. (NASDAQ: USEG)
U.S. Energy Corp. has a few things that traders have focused on over the past week. Not only is this one of the energy penny stocks gaining momentum from the rise in pricing, but it’s also one of the low float penny stocks turning heads. With fewer than 30 million shares outstanding and some outlets citing a float of fewer than 5 million shares, USEG stock has staked its claim among retail traders. The question now: can it firmly solidify new highs after last week’s big run.
U.S. Energy Corp. has established a portfolio of assets in the U.S. These include its primary oil and gas producing properties in North Dakota and South Texas. Last week the company released its year-end proved reserves update for 2021 and highlighted the potential for increased production following the closing of its acquisitions of oil and gas assets from Lubbock Energy Partners, Synergy Offshore, and some of Sage Road Capital’s entities. This transaction bolstered the company’s assets across the Rockies, West Texas, and Eagle Ford, among other locations.
Ryan Smith, Chief Executive Officer of U.S. Energy, explained, “With the closing of our Acquisitions at the beginning of the year, we have expanded our operations into geographically diverse assets that generate significant cash flow, allowing us to remain focused on our consolidation initiatives.”
As attention focuses on energy stocks, ENSV could be on the watch list for some at the top of the week.
2. Enservco Corporation (NYSE: ENSV)
Shares of Enservco Corp. have also surged on the back of the Russia-Ukraine conflict. The company provides well-site services to onshore oil and gas companies. According to Enservco, it serves more than 300 energy and production customers ranging from major producers to small independent operators. Its notable customers include BP, Whiting, ConocoPhillips, Gulfport, Chesapeake Energy, and Marathon Oil, among many others.
With earnings season heating up, in addition to the energy industry’s excitement. The last update for its third quarter revealed some second-half strength in 2021. Revenue jumped 72%, with gains posted across all service offerings. Enservco also recorded an adjusted EBITDA, up 10% over the same period in the prior year. Its Texas operations, in particular, produced revenue growth of more than 120% year-over-year.
“Our fourth and first quarters constitute our heating season, which is historically when we generate a high percentage of our revenue and profitability.”Executive Chairman Rich Murphy
ENSV stock could be one to watch heading into March, thanks to this optimistic outlook.
3. Denison Mines Corp. (NYSE: DNN)
Nuclear power has come back into the spotlight after the Ukraine invasion. As a result, uranium miners and producers are gaining attention among retail traders. Denison Mines is one of the companies benefiting. It holds interest in the Athabasca Basin region of Saskatchewan, Canada, including 95% of the Wheeler River project and 22.5% ownership in the McClean Lake joint venture.
Earlier this month, Denison gave an update on its operations. The company announced that three drill holes were completed late last year. It returned intervals of high-grade uranium mineralization.
This update came after news on its McLean Lake operation (which Denison owns 22.5%). It gained approval for expanding its tailings management facility. David Cates, Denison’s President & CEO, commented, “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.”
Thanks to growing attention on nuclear conflict, it may be worth paying attention to some uranium names.
4. Gevo Inc. (NASDAQ: GEVO)
Alternative energy and renewables aren’t out of the discussion either. Even though oil and gas have taken a brighter spotlight recently, companies like GEVO have also gained momentum. The company specializes in generating energy0dense liquid hydrocarbons for use in transportation fuels. These include things like gasoline, jet fuel, and diesel.
At the end of the month, last month, Gevo started taking its renewable natural gas project online. In particular, Gevo NW Iowa RNG, LLC is expected to produce roughly 355,000 MMBtu of renewable natural gas per year from dairy manure (you read that correctly). According to the company, “Because dairy manure left in lagoons and used as fertilizer releases high levels of methane to the atmosphere, there is an opportunity to capture that methane as biogas and refine it to be used as renewable natural gas.”
Mixed earnings stalled momentum in the market last week. However, a surge of bullishness sparked early action to start the week. Analyst sentiment may have also added to the upbeat sentiment this month. Citigroup started Gevo at Buy. It also issued a $5 price target.
5. Tellurian Inc. (NYSE: TELL)
Based on several catalysts, Tellurian has become a popular energy penny stock to watch. First, the reopening trend has placed a magnifying glass on certain companies with green energy and infrastructure applications. Since Tellurian focuses on liquified natural gas (LNG), it is one of the companies looked at for providing “bridge fuels” for building the renewable energy infrastructure that so many countries have discussed.
The idea of “bridge fuels” is that they will be used to reach short-term greenhouse gas reductions. In theory, by replacing things like coal power, they would reduce reliance on other traditional energy sources over time. As a result, this would positively impact greenhouse gas reduction initiatives.
In its recent update, President and CEO Octávio Simões said, “The global economy is in the early stages of an energy super cycle driven by strong demand for natural gas and several years of underinvestment in energy infrastructure. Tellurian is optimally positioned with fully executed market-based LNG SPAs and a permitted project. Bechtel will begin construction of Driftwood LNG in April, and we will seek to conclude the financing process shortly thereafter.”
Best Penny Stocks To Buy Right Now
What are the best penny stocks to buy right now? If you’re following the Russia-Ukraine conflict, you may want to take a closer look at the energy sector. It’s also worth noting that oil and gas aren’t the only things that traders are paying attention to either. Everything from renewables to alternatives has come into a brighter spotlight to start the week. Given the volatility that’s already in the stock market today, penny stocks have become a core focus for retail traders.