Notable Brands Are Trading As Penny Stocks In 2022 But Are They Worth It?
If 2022 has taught us anything, you can’t ignore penny stocks. For those initiated in this world of “cheapies,” the standard definition includes stocks under $5. So if you were to ignore this market area, you would be missing some big brands, believe it or not. We have written a series about “Will It Be On Your List Of Penny Stocks In 2022.”
More times than not, the companies discussed have breached this $5 threshold. Does this mean all penny stocks are bad, or the companies are going to fail? No, nor does it mean that stocks under $5 aren’t worth your time. The focus of this article is to shed light on the fact that low-priced stocks aren’t exactly the “lotto tickets” or “grassroots” companies that popular opinion suggests. In this article, we look at a few notable brands whose stocks can be bought for pennies right now.
At the end of this article, we’ll also have a complete list of penny stocks that include plenty of recognizable names for you to look at. Remember, just because they can be purchased for pennies on the dollar that doesn’t make them any less risky or “better to buy” than other stocks.
Penny Stocks To Watch
Carvana Co. (CVNA)
The newly minted penny stock, Carvana, was trading above $200 at the beginning of the year. Last month we speculated on it becoming a penny stock, which has come to fruition this week. The company continued missing the mark on performance during one of the most bullish periods for the automobile marketplace. It also ran into a significant cash crunch, which helped push shares below the level of $5 most recently.
Reports from multiple sources, including Bloomberg, have cited that Carvana could be seeking debt restructuring. Firms including Apollo and Pimco are being named as the ones looking to prevent a “creditor brawl” over the automobile retail company. Unfortunately, the outlook isn’t much brighter because of cheaper stock prices. Wedbush recently downgraded the penny stock to Underperform and dropped its price target to $1.
Analyst Seth Basham said in a research note that he saw a “likelihood of debt restructuring that could leave the equity worthless in a bankruptcy scenario…or highly diluted in a best case.”
In a Q3 shareholder update, management outlined several objectives. It said:
As discussed in our recent operating plan presentation, given the current industry, economy, and market environment, we have shifted our priorities to lowering expenses and driving positive free cash flow. However, this letter maintains our historical format built around the three objectives (1) Grow Retail Units and Revenue; (2) Increase Total Gross Profit Per Unit; and (3) Demonstrate Operating Leverage to discuss our key results.
Whatever happens next is to be seen. Regardless, CVNA stock is an example of a notable company trading for pennies on the dollar in 2022.
Express Inc. (EXPR)
Shares of Express Inc. aren’t a stranger to the penny stock range. Shares of the apparel company have traded as low as $0.57 in the last three years. A quick bout of momentum in early 2021 during the meme stock frenzy helped the penny stock explode to highs of nearly $14. Fast-forward to this month, and EXPR stock is back at 52-week lows.
One of the biggest hurdles for the company can be found in its financials. Worse-than-expected earnings results for multiple quarters and bleak guidance have hurt Express in 2022. This, of course, is against a backdrop of an already bearish economic outlook. Nevertheless, EXPR shares are trading higher this week after the latest round of earnings.
True to form, Express missed EPS estimates. It missed sales estimates, and it slashed its 2022 outlook. Why in the world would EXPR stock trade higher? WHP Global may have helped bring some short-term optimism back to the beaten-down retailer. The two announced a strategic partnership where WHP also invested $25 million to acquire 5.4 million newly issued shares of EXPR at $4.60 per share. This new venture will go after new domestic category licensing and expansion internationally.
“The global growth potential of the Express brand and the EXPR omnichannel platform will give our company a distinct competitive edge as we look to acquire more consumer brands,” said Yehuda Shmidman, WHP Global Chairman and CEO, in a December update.
Rent The Runway Inc. (RENT)
The self-billed “shared designer closet platform,” Rent the Runway, has grown in popularity among millennials. The company is best known for offering its customers designer clothing and accessories they can rent and return. Unfortunately, the success behind its branding hasn’t translated to the market since the company went public.
Last October, RENT stock made its public debut, reaching highs of over $24 on the day of its IPO. Since then, the overarching trend has been bearish, with the stock slumping to 52-week lows of $1.10 last month. This week, however, has seen one of the highest trading volume days in the company’s public history. On Wednesday, RENT stock saw more than 14 million shares traded during the early morning session. The move comes a day after reporting its latest round of earnings.
The company reported better-than-expected Q3 sales results and issued higher-than-expected Q4 sales. Company CEO Jennifer Hyman also noted that Rent the Runway’s restructuring plan is “substantially complete.” She also explained that it would allow the company to “invest in our customer proposition while significantly improving cash burn.”
Does this mark a turning point for the company, or is this just a quick break in the action before the next retest of lows? That’s something to be seen. For now, RENT stock has gained some optimism from penny stock traders.
Blue Apron Holdings Inc. (APRN)
Another company that is no stranger to being a penny stock is Blue Apron Holdings. The meal kit company has faced similar headwinds that many subscription-based retail consumer brands have run into. One of the ways it has aimed at combatting this is by opening up its sales to non-members.
The company’s recent launch of subscription-free meal kits on Amazon has helped promote some attention to the company. Blue Apron kits are also available to customers of Walmart through its online store. Earlier this year, the two linked up with a plan to offer subscription-free access to Blue Apron menu items.
While APRN stocks’ short interest and unusual options data have been in and out of the spotlight this quarter, this week, APRN stock news is the focal point. Blue Apron announced cost reductions and liquidity management plans in its latest business update.
List Of Notable Brand Names, Now Penny Stocks
- Carvana Co. (NYSE: CVNA)
- Express Inc. (NYSE: EXPR)
- Rent The Runway Inc. (NASDAQ: RENT)
- Blue Apron Holdings Inc. (NYSE: APRN)
- Stitch Fix Inc. (NASDAQ: SFIX)
- Tattooed Chef (NASDAQ: TTCF)
- Bed Bath & Beyond (NASDAQ: BBBY)
- fuboTV Inc. (NASDAQ: FUBO)
- Canopy Growth Corp. (NASDAQ: CGC)
- Virgin Galactic (NYSE: SPCE)
- SoFi Technologies (NASDAQ: SOFI)
- Traeger Grills (NYSE: COOK)
- PLBY Group, Inc. (NASDAQ: PLBY)
- Oatly Group (NASDAQ: OTLY)
- Mesa Air Group Inc. (NASDAQ: MESA)
- BurgerFi International Inc. (NASDAQ: BFI)
- Trivago (NASDAQ: TRVG)
- Bark Inc. (NYSE: BARK)
- Stryve Foods, Inc. (NASDAQ: SNAX)
- 23andMe Holding Co. (NASDAQ: ME)
- BuzzFeed, Inc. (NASDAQ: BZFD)
- The Beachbody Company, Inc. (NYSE: BODY)
- Party City Holdco Inc. (NYSE: PRTY)
- ContextLogic Inc. (NASDAQ: WISH)
- SmileDirectClub Inc. (NASDAQ: SDC)
- Clear Channel Outdoor Holdings Inc. (NYSE: CCO)
- Nokia (NYSE: NOK)
- Redfin (NASDAQ: RDFN)
- Fossil Group (NASDAQ: FOSL)
- Virgin Galactic (NYSE: SPCE)
- Vera Bradley (NASDAQ: VRA)
- Tupperware brands (NYSE: TUP)
- BlackBerry (NYSE: BB)
- Rite Aid (NYSE: RAD)
- Vimeo (NASDAQ: VMEO)
- F45 Training (NASDAQ: FXLV)
- TrueCar Inc. (NASDAQ: TRUE)
- Gannett (NYSE: GCI)
- WeWork (NYSE: WE)
- Nautilus Inc. (NYSE: NLS)
- Bright Health Group (NYSE: BHG)