Penny stocks typically trade for less than $5 and generally belong to small companies often overlooked by mainstream investors. Yet, for those willing to navigate the inherent risks, these cheap stocks can offer a world of potential.
One strategy that has gained traction among retail investors is tracking penny stocks with higher-than-average volume. This approach can provide a significant edge when compiling a list of penny stocks to watch, offering insights that can help investors seize time-sensitive opportunities.
Penny Stocks: Risk & Reward
Penny stocks are often characterized by their high volatility. Their low price means that even small changes can translate into large percentage gains. However, it’s important to note that investing in penny stocks is not without risks. These stocks can be subject to price manipulation and lack the liquidity of larger, more established stocks.
Furthermore, information about penny stock companies can be scarce, making it more challenging for investors to conduct thorough due diligence. As such, while penny stocks can offer substantial returns, they are also associated with a high risk of loss.
Does Volume Matter For Trading Penny Stocks?
Trading volume, or the number of shares traded in a given period, is a key indicator of market activity and investor interest. In the context of penny stocks, higher-than-average volume can signal a significant shift in market sentiment.
For investors, tracking trading volume can provide valuable insights. A surge in volume can indicate increased investor interest and potentially precede a significant price movement. Conversely, low volume might suggest a lack of investor interest or a period of consolidation before the next price move.
In this article, we look at several penny stocks experiencing higher trading volume in the stock market today. Whether it’s news headlines, filings, or something else, we’ll peel back some layers to find potential catalysts. Then you can decide if they deserve a spot on your list of penny stocks to watch.
Penny Stocks To Watch
Akebia (NASDAQ: AKBA)
Akebia Therapeutics has been a focal point for investors over the past few months, largely due to its significant jump in April and May. The company’s appeal to the FDA concerning its anemia treatment, vadadustat, has been a key driver of this interest.
Akebia engaged in discussions with the FDA about the future course of action following an interim response to its Formal Dispute Resolution Request. This was initiated in response to a Complete Response Letter received in March. The market sentiment was further buoyed by a positive opinion from the Committee for Medicinal Products for Human Use (CHMP) in Europe regarding the drug candidate. Additionally, the company showcased posters at the National Kidney Foundation Spring Clinical Meetings held from April 11-15.
Fast forward to the end of May, and Akebia received marketing authorization for vadadustat, now branded as “Vafseo®,” from the UK Medicines and Healthcare Products Regulatory Agency. However, the future of the drug in the US market has come under scrutiny. The FDA rejected its formal dispute resolution but provided guidance for approval and the resubmission of a new drug application (NDA).
The company has seen a surge in analyst interest, with firms such as HC Wainwright and Piper Sandler setting price targets above current levels. HC Wainwright has set its target at $2. Meanwhile, Piper Sandler has upgraded its rating to Overweight and raised its target to $4. It’s also worth noting that Akebia is presenting at the Jefferies Healthcare Conference today.
CEO John Butler will discuss recent regulatory updates regarding vadadustat. He’ll also talk about Akebia’s oral hypoxia-inducible factor prolyl hydroxylase inhibitor for the treatment of anemia due to chronic kidney disease for dialysis-dependent patients, and the potential global commercial opportunity for Vafseo® (vadadustat).
Corvus Pharmaceuticals (NASDAQ: CRVS)
Corvus specializes in oncology therapy development. In a business update, the company discussed its clinical pipeline plans, including accelerating the development of its CPI-818 for T-cell lymphomas. “We have established sound scientific foundations for our product candidates, which give us confidence as we initiate mid-stage clinical trials in front-line treatment of lung cancer and renal cell cancer,” explained Corvus CEO Richard A. Miller, M.D. in the March update.
Last month, Corvus discussed CPI-818 in more detail and emphasized the strong progress being made in the clinic. at the International Conference on Malignant Lymphoma. CEO Richard Miller, M.D. also explained, “CPI-818 is the main priority for Corvus and we remain on track for initiating a potential registrational Phase 3 randomized trial for T cell lymphoma later this year.”
Multiple analysts have adjusted their outlook on the company. Cantor Fitzgerald upped its $2 target to $4. It also has an Overweight rating. Meanwhile,e Ladenburg Thalmann increased its $4 to $10. The firm maintains a Buy rating on CRVS stock.
What are traders watching now? Corvus will be in presentation mode in June. This week it will be at the Jefferies Healthcare Conference. Next week could be of even more interest. CPI-818 data from its Phase 1/1b clinical trial will be presented at the International Conference on Malignant Lymphoma.
Amyris (NASDAQ: AMRS)
Amyris shares have been bouncing back higher since mid-May. The jump started after the “clean” beauty and cosmetic company announced completing a license for a supply of sustainable squalene. This was with the specialty chemicals company Croda International. The partnership was described by Croda President Daniele Piergentili as “fully aligned with Croda’s commitment to be the most sustainable supplier of innovative ingredients.”
A recent restructuring plan brought a bit more volatility to the penny stock. Amyris discussed securing funding as part of the plan. John Melo, Amyris CEO, explained, “We are pleased with the support of the PwC team as well as our board Restructuring Committee on the expansion and acceleration of our “Fit to Win” efficiency and cost reduction program. It is an important and necessary step in the evolution of Amyris to reduce our cost base, improve our operational effectiveness and achieve sustainable growth while continuing to execute the delivery of sustainable chemistry through our Lab to MarketTM capabilities and invest in our leading consumer brand portfolio.”
Though there was an initial adverse reaction in the stock market this week, that seems to have subsided so far.