Inflation has been a hot topic recently due to the latest PCE data. The index showed a higher-than-expected increase of 0.6% month-over-month and 4.7% over the last year. Investors are concerned as inflation can affect the stock market. But that may mean something different for those trading penny stocks.
Why Does Inflation Matter In The Stock Market Today?
To understand how inflation affects the stock market, we need to know what inflation is. It’s the rate at which the general level of prices for goods and services is rising. It’s usually measured by the CPI or PPI. High inflation can decrease a currency’s value, leading to higher prices for goods and services. This can lead to reduced consumer spending, negatively impacting the stock market.
Inflation can also cause interest rates to rise. That makes it more expensive for companies to borrow money. This can lead to a decrease in profits and, ultimately, a reduction in stock prices. While inflation affects the stock market, it doesn’t necessarily affect penny stocks. These low-priced stocks tend to move independently of broader trends. This makes them more attractive and can make them more volatile than other stocks. Retail traders are attracted to cheap stocks for quick profit and are susceptible to market fluctuations, including inflation.
Despite the general lack of correlation between inflation and low-priced stocks, there are still plenty to watch that are heading higher as broader markets drop lower. Let’s take a closer look at a few of these stocks and why they’re moving. This list of penny stocks continues the article Penny Stocks To Buy Now? 4 Under $5 To Watch Before Next Week.
Penny Stocks To Watch
GeneDx Holdings Corp. (WGS)
GeneDx is a company discussed earlier this month and a name that seems to have recently gained attention from retail traders. In the article “Penny Stocks To Buy: 4 To Watch With Big News In February,” the company was discussed alongside others that reached major milestones. WGS stock news was regarding its financing round with specifics about the use of proceeds (UOP) and who invested in the round. Among the UOP, strategic investment opportunities were mentioned. Furthermore, the company’s recent filings revealed a significant purchase from the Icahn Schoool Of Medicine At Mount Sinai. The organization purchased over 28.5 million shares at the offering price of $0.35.
Formerly known as Sema4, the company changed its name earlier this year to better convey its focus on genomic and clinical insights. GeneDx has centered its focus on delivering actionable and personalized health data to provide better diagnosis and improve drug discovery. Using genomic and clinical information allows for using exome and genome testing coupled with rare disease data sets in developing effective treatment plans. The latest big-money bets from the Icahn School and companies like Opko Health (NASDAQ: OPK) have brought some speculatively bullish attention to the company this quarter.
Fast-forward to this week, and GeneDx gave an update regarding the upcoming 2023 American College of Medical Genetics and Genomics (ACMG) Annual Clinical Genetics Meeting. It will contribute eight posters on March 15, demonstrating the company’s ability to leverage genetic data and technology to generate clinical insights. It will also report earnings a day earlier on March 14th.
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Lucira Health Inc. (LHDX)
Another one of the penny stocks heating up the scanners this week is Lucira Health. The company caught attention on Monday after announcing FDA-related news. It received FDA Authorization for its at-home combination of Covid-19 and Flu test.
“Our small but experienced team at Lucira has again demonstrated the versatility of our technology platform by introducing this first-of-its-kind innovation in clinically relevant at-home diagnostics to the marketplace. The authorization of the COVID-19 & Flu Home Test with OTC label is another example of how Lucira is helping to transform the future promise of home-based, fast, accurate diagnostics into a reality,” said Erik Engelson, President and CEO of Lucira Health.
The company also said it is seeking a strategic or financial partner for the resumption of manufacturing and development of additional home diagnostic products.
Protalix BioTherapeutics (PLX)
Biotechnology penny stocks have been hot lately; Protalix is a clear example. The company’s shares have been increasing explosively since November as it continues reaching new milestones. It utilizes its ProCellEx plat cell-based protein system to produce recombinant therapeutic proteins.
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Late last year, the company announced FDA acceptance of a joint resubmission of an application for Fabry disease treatment. Protalix and Chiesi Global Rare Diseases announced the resubmitted and accepted Biologics License Application for PRX-102. Now all eyes are on the FDA’s next action date, May 9th, 2023. This is the Prescription Drug User Fee Act or PDUFA date for the outcome of the BLA. This month, the company said the European Medicines Agency’s Committee for Medicinal Products for Human Use adopted a positive opinion. It recommended marketing authorization for PRX–102 to treat adult patients with Fabry disease.
In a recent earnings update, Dror Bashan, Protalix’s President and Chief Executive Officer, explained, “We completed the pivotal parts of our PRX–102 phase III clinical program this year with the closeout of the BRIGHT and BALANCE trials, forming the basis for regulatory submissions to the EMA and U.S. Food and Drug Administration (FDA), both of which were accepted for review.”
PLX stock keeps heading higher as the market waits for more updates. Something to keep in mind, however, is that Protalix just filed a prospectus to offer up to $20 million in a stock offering. Whether or not it leads to dilution risk is to be seen. However, it’s something to remember if PLX stock is on your watch list.
List Of Penny Stocks
- GeneDx Holdings Corp. (NASDAQ: WGS)
- Lucira Health Inc. (NASDAQ: LHDX)
- Protalix BioTherapeutics (NYSEAMERICAN: PLX)
- EOS Energy Enterprises Inc. (NASDAQ: EOSE)
- Troika Media Group (NASDAQ: TRKA)
- Nuburu Inc. (NYSEAMERICAN: BURU)
- Faraday Future Intelligent Electric (NASDAQ: FFIE)