The stock market’s current volatility may have piqued your interest in investing in penny stocks. Usually priced below $5, these stocks are known for their significant price fluctuations and potential for high returns, albeit with considerable risks. In this article, we’ll examine the fundamentals of trading low-priced stocks and explore some examples of stocks moving in today’s market.
Penny Stocks Definition
First, let’s define penny stocks. They typically represent smaller companies trading at relatively low share prices. Due to their pricing and limited liquidity, penny stocks can experience extreme price swings. Regrettably, this also makes them vulnerable to exploitation by fraudulent schemes, classifying them as high-risk investments that demand thorough research and due diligence.
Pros
A primary advantage of trading penny stocks is their potential for sizeable returns. These stocks have lower prices, but even minor increases can lead to substantial gains. For example, a $0.50-per-share stock could double in value with just a 50-cent increase. Conversely, losses can be significant if the stock price declines.
Cons
Some significant risks of penny stocks include their low liquidity, making it challenging to enter or exit trades at favorable prices. Furthermore, these companies tend to be minor, with limited resources, making them more vulnerable to market downturns or regulatory changes. Additionally, obtaining reliable information about their financial health or growth potential can be difficult, as they are not as widely followed as larger companies.
Sentiment Fueling Penny Stocks Today
There’ve been plenty of examples of penny stocks and their ability to break out. Today alone saw more than a few jumped over 50% or more in a single day. Take, for instance, some of today’s most active penny stocks. Evelo Biosciences (NASDAQ: EVLO) saw its share price jump by less than 20 cents. While such a move would be inconsequential for a stock like Apple, for EVLO stock, it represented a jump of over 150%.
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That’s just one example, and there are plenty more. The first step in finding breakout stocks is to put a watch list together, and to do that, you need to know what’s happening in the stock market today. Here’s a list of penny stocks traders are watching after an uptick in activity during Thursday’s session.
Penny Stocks To Watch
Evolv Technology (EVLV)
This year has been much stronger for Evolv compared to where things finished in 2022. The company is an AI-based weapons detection security screening tech company. A deal with Major League Baseball teams and their respective stadiums has helped keep the focus on EVLV stock.
Earlier this month, Evolv was named the official weapons detection screening system provider of the Houston Astros. It also was chosen by the Philadelphia Phillies, the Wells Fargo Center, and Citi Field for screening fans. But it wasn’t limited to professional venues, as Evolv closed on corporate deals, including one with Purple Innovation. Purple is a mattress company that will use the screening tech at its Georgia factory.
What To Watch With EVLV Stock
This week, more headlines focused on Evolv’s expansion as it teamed up with the Pittsburgh Pirates and Colorado Rapids for fan screening solutions. This expansion compounds on what was already a milestone Q4. In its last earnings update, Evolv announced better-than-expected earnings, beating sales estimates by a wide margin.
TeraWulf Inc. (WULF)
TeraWulf is a Bitcoin mining facility operator. It leverages low-carbon energy production platforms to capitalize on the new “green” mining opportunity. Bitcoin prices have made a nice rebound, and WULF stock has benefited. TeraWulf also recently announced that it would participate in a series of investor events this week and into May. Coupled with underlying industry momentum, it seems to be a focus for traders in the stock market this week.
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What To Watch With WULF Stock
TeraWulf reported the full deployment of 50 MW at its Nautilus Bitcoin mining facility ahead of schedule.
“Our team has been working swiftly and diligently to achieve our stated goal of reaching 5.5 EH/s of operational mining capacity in Q2 2023,” said Paul Prager, Chairman and CEO of TeraWulf. “Deploying 50 MW of mining capacity at the Nautilus facility is an important milestone for the Company. Not only does it represent the first nuclear-powered Bitcoin mining facility in the U.S., but TeraWulf now has the opportunity to realize the economic advantage of 50 MW of zero-carbon mining at what is arguably the lowest contracted power cost in the sector – just $0.02 /kWh for a term of five years.”
Terran Orbital Corporation (LLAP)
Satellite-based solutions provider Terran Orbital caught a much-welcomed uptick in trading activity on Thursday. Shares reversed sharply after news surfaced before the stock market opening. The jump comes after LLAP stock has been in a 3-day downtrend that began after it filed a $500 million mixed shelf-offering that brought dilution fears back to the market.
What To Watch With LLAP Stock
This week the company received a milestone payment for 300 spacecraft combined with the screening of industrial partner screening and trade studies to support the acquisition process for the spacecraft, a $2.4 billion contract with Rivada Space Networks.
CEO Declan Ganley explained, “The additional ’Demonstrator Mission’ in 2025 will ensure that customers can test the operational environment of our unique laser-connected data network ahead of the rollout of the main constellation and provide RSN with an operational test bed for early ground segment automation to build up best practices for operating our larger fleet.”
ImmunoGen Inc. (IMGN)
ImmunoGen develops antibody-drug conjugates for cancer treatment. It aims to enhance anti-tumor activity through its portfolio of candidates, which includes therapies to address ovarian cancer, acute myeloid leukemia, plastic plasmacytoid dendritic cell neoplasm, and other cancer types.
What To Watch With IMGN Stock
The company recently appointed a Senior VP and Chief Commercial Officer after securing non-dilutive financing of up to $175 million. However, the main focus could fall on what happens Friday. This will be when the company hosts its conference call to discuss its first-quarter operating results.
Cosmos Health Inc. (COSM)
Shares of Cosmos Health have quietly risen over the last few weeks. This comes after several months of selling pressure taking shares back down to their 2023 lows. With what it considers a “transformed” balance sheet at the end of 2022, the market may be speculating on how to continue the trend.
CEO Greg Siokas discussed this in more detail in the company’s April update, which shortly followed the completion of the acquisition of the ZipDoctor telehealth platform.
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“2022 was a transformational year for Cosmos Health. Despite challenging market conditions, plagued by elevated inflation, high-interest rates, and overall market uncertainty, we delivered yet another year of robust operating performance. However, what stands out the most is the game-changing transformation of our balance sheet.”
What To Watch With COSM Stock
Siokas hasn’t only been making comments about the stock. He’s also been putting up money of his own. Less than a week ago, it was reported that he purchased over $100,000 worth of COSM stock via a private placement. This seems to have boosted sentiment in recent sessions.
List Of Penny Stocks
- Evolv Technology (NASDAQ: EVLV)
- TeraWulf Inc. (NASDAQ: WULF)
- Terran Orbital Corporation (NYSE: LLAP)
- ImmunoGen Inc. (NASDAQ: IMGN)
- Cosmos Health Inc. (NASDAQ: COSM)
