Why are stocks dropping? Whether you’re talking about penny stocks or higher-priced stocks, the bearish trend is evident in the stock market today. Stocks are falling for a mix of reasons. First, lockdown fears in China have acted as a reminder of what severe case increases can trigger.
Meanwhile, fears of slower economic growth and recessionary concerns are alive and well heading into the upcoming Federal Reserve meeting. A more aggressive stance from the Fed on raising interest rates to curb inflation has continued building steam. Each stock market bounce is met with another drop lower, as was seen in the stock market today.
Not even bullish news of Elon Musk buying Twitter (NYSE: TWTR) could hold markets up. In fact, the $54.20 purchase offer price was far from reality on Tuesday. Shares of Twitter stock slumped below the $50 level. Meanwhile, Musk’s Tesla (NASDAQ: TSLA) recorded one of the most significant 1-day drops in recent history. Shares of the electric car maker dipped more than 10% to below $890. This price point hasn’t been seen since late March.
Best Penny Stocks to Buy Now?
Are there any “top penny stocks to buy” right now? That’s a question plenty are asking. Unless you’ve got experience day trading higher volatility stocks, the answers aren’t as straightforward. Almost daily, a few groups of cheap stocks experience explosive moves. For instance, healthcare services company Nutex Health Inc. (NASDAQ: NUTX) has gotten beaten up since making its public debut.
Shares reached a high of $52.80 from an open of just $10.45 on its first official trading day. Since then, NUTX stock has dropped significantly lower to well below $4. Tuesday, that all changed as NUTX stock surged to highs of $13.47 on its highest trading volume to date. Will this trend continue? That’s yet to be seen. However, parabolic moves like this aren’t uncommon on a day-to-day basis.
Top Penny Stocks To Sell?
Based on how the broader markets are trading, some take things one step at a time. Investing in penny stocks has come second to flipping them. If you are looking for the “best penny stocks to buy,” it’s essential to understand what that means for your investing or trading style. As they say, the trend is your friend, and right now, some company insiders have taken it upon themselves to dump shares of these penny stocks below. Is it time to look out below, or is this an opportunity for traders to capitalize on?
- Clarus Therapeutics Holdings Inc. (NASDAQ: CRXT)
- XpresSpa Group Inc. (NASDAQ: XSPA)
- Checkpoint Therapeutics Inc. (NASDAQ: CKPT)
Clarus Therapeutics Holdings Inc. (NASDAQ: CRXT)
Clarus Therapeutics was one of the most popular penny stocks to watch last week. In fact, since hitting lows of $0.6099 in March, CRXT stock turned heads as it surged more than 500% within a matter of weeks to highs of $3.94. What was the catalyst? The company’s focus on “strategic alternatives” seems to have spawned speculative trading action in the stock.
Dr. Robert Dudley, President and Chief Executive Officer of Clarus, discussed several advanced in the company’s latest earnings update.
“We also significantly expanded payer access coverage for JATENZO as payers recognized its value and innovation for treatment of appropriate hypogonadal men. In February, we launched our new online patient portal, partnering with Vault Health and AssistRx, leaders in providing healthcare services to patients. We believe our commitment to serve patients through these partnerships will enhance overall patient experiences and positively impact JATENZO sales…We continue to explore various financing and strategic options to maximize stockholder value.”
Ahead of a new data readout for JATENZO at the Androgen Society Annual Meeting, CRXT stock exploded. The move was short-lived as the penny stock came crashing down swiftly since the presentation. There was also a public offering of $30 million that came to light earlier this week. That also helped add pressure to the stock. However, it could also be the stock sales from 10% owner Thomas McNerney & Partners LP, which also came to light. In a Form 4 filing, details show the firm sold over $9 million worth of stock on April 20th. Average selling prices were between $2.20 and $3.03, according to the filing.
XpresSpa Group Inc. (NASDAQ: XSPA)
One of the early winners during the pandemic was XpresSpa Group. The company quickly pivoted from an in-airport spa business to an in-airport virus testing company. Speculation began circling the company and its expansion plans to help with easing reopening efforts for travelers. This year, things are very different from what they looked like in 2021. Since the start of 2022, XSPA stock has made a nosedive from over $2 to under $1.
Even in light of new location openings in places like Phoenix Sky Harbor International Airport and a new testing site in Orlando International Airport, XSPA stock has failed to wow investors this quarter. Throw in a filing for a potential secondary offering at the start of the month, and sentiment has turned bearish.
Adding to it is insider selling in XSPA stock. This month, Director Robert Weinstein and CEO Scott Milford dumped shares of XSPA. But, compared to the selling in CRXT, footnotes in Company Form 4 filings show more details about the reasoning of the sales. Both insiders made the transactions pursuant to a Rule 10b5-1 trading plan that was previously adopted. A 10b5-1 plan allows insiders to sell a set number of shares at a predetermined time. This helps them avoid any type of accusal of insider trading. You’ll see management of larger companies sell under a 10b5, including Jeff Bezos, Mark Zuckerberg, and many others. This is important to note as the timing of the selling may not necessarily coincide with how XSPA stock is performing.
Checkpoint Therapeutics Inc. (NASDAQ: CKPT)
Since the beginning of the year, Checkpoint Therapeutics has fought hard to bounce, but so far, any rebound has been met with heavier selling. In January, the immunotherapy company saw some reprieve after discussing positive topline results in a registration-enabling trial of its cosibelimab. The treatment candidate is the company’s therapeutic for metastatic cutaneous squamous cell carcinoma. Checkpoint also said it sought submission for a biologics license application to the FDA later this year.
Jump ahead a few more months, and CKPT stock remains a laggard. Shares reached fresh 52-week lows on April 26. An updated Form 4 filing this month fueled some of the bearish sentiment. It showed CEO James Oliviero cutting his position in CKPT stock throughout the year. In April alone, Oliviero sold more than 120,000 shares at prices ranging from $1.51 to $1.81. The last time CKPT stock traded this low was in April of 2020.
How To Trade With The Stock Market Down
It isn’t easy to find lasting trends with the stock market down today. For that reason, a strategy and clear game plan is a must, especially with so much headline risk. If you’re new to the markets or new to trading, in general, getting a proper education is key.
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