Penny stocks are highly speculative equities priced under $5 per share. They grab attention for their rapid rally potential even if the risks give most investors pause. Still, short-term traders look for volatile penny stock picks for explosive upside moves, especially around high headline volume periods like earnings season or retail events like Black Friday.
When Do Penny Stocks Whip Around Most Wildly
While penny stocks stay volatile year-round, certain cyclic events enhance turbulent trading. Earnings season represents a predictable hotspot as penny stocks react strongly to financial surprises and guidance, both good and bad. Outsized stock market reactions this Black Friday have sparked most of the interest in cheaper names and quick spikes before the weekend.
You can also see whipsaw action with other catalysts. Clinical trials or regulatory catalysts also drive sector volatility swings in biotech penny stocks. FDA approvals can launch shares skyward by several hundred percent almost overnight. Conversely clinical holds shutting down development crater prices and spark sympathetic sell-offs across peer penny stocks.
Broader markets also stoke or dampen penny stock volatility as institutional capital rotates between safety and speculation. Hawkish Fed rate changes can incite a growth stock selloff, often trickling into the niche of cheap stocks. Dovish signals lifting the Nasdaq compels sidelined capital back toward penny stocks hunting upside torque.
Strategies For Trading Penny Stocks Around Turbulence
With penny stocks more susceptible to external shocks compared to large caps, what strategies may help traders capitalize on price swings or avoid peril?
Avoiding thinly traded stocks with opaque reporting or unproven business models marks one best practice. Such low-priced stocks offer minimal fundamental backstops when share prices swing wildly on low information volume. Discerning traders focus analysis on penny stocks with news or accelerating fundamentals.
Maintaining reasonable position sizing also limits one’s risk exposure if holding through volatile patches surrounding binary events. Over-concentrating into one or two penny stocks invites outsized portfolio drawdowns. Diversification across sectors insulates against category-specific volatility triggers as well.
While turbulence flashes overnight profit potential, unchecked volatility risks portfolio-wide havoc without proper risk management. But by selecting promising penny stock picks, setting stops, and diversifying, traders can aim to harvest gains around turbulent swings.
Penny Stocks To Buy? 4 To Watch Under $5
MoneyHero Group (MNY)
MoneyHero Group, formerly CompareAsia Group Capital Limited, is a financial products platform in Greater Southeast Asia. They specialize in connecting consumers with financial institutions. The freshly minted public company successfully completed its business combination with Bridgetown Holdings Limited, a special-purpose acquisition company. The SPAC is also a blank-check company backed by Hong Kong billionaire Richard Li and PayPal cofounder Peter Thiel.
This merger, approved by Bridgetown shareholders, values MoneyHero at an approximate enterprise value of $310 million and an equity value of around $283 million. Prashant Aggarwal, CEO of MoneyHero, stated that the merger not only provides capital for strategic growth but also strengthens their commitment to simplifying financial decisions.
5 Penny Stocks With Big Black Friday Stock Market News
The partnership aims to enhance MoneyHero’s market position in Greater Southeast Asia, a region experiencing rapid growth. It will also enable continued investment in their financial products platform, serving as a crucial link between consumers and financial institutions.
Higher-profile names combined with penny stock hype have helped fuel speculation in the market.
Globalstar, Inc. (GSAT)
Globalstar, Inc. is a provider of satellite communications services. They focus on delivering reliable connectivity solutions globally. Thanks to earnings, GSAT stock has gained plenty of momentum in the stock market this month.
The company reported significant growth in its third-quarter 2023 results. Total revenue increased by $20.1 million, a 53% rise to $57.7 million compared to the same quarter in 2022. This increase was primarily driven by higher service revenue, particularly in wholesale services. The company’s operational income showed a remarkable turnaround, with an income of $2.0 million in Q3 2023 compared to a loss of $186.6 million in Q3 2022.
The loss in the previous year was largely due to a non-cash impairment charge of $174.5 million related to the abandonment of second-generation Duplex assets. Excluding this charge, the increase in operational income was attributed to the higher service revenue, offset by increased operating expenses.
As shares approach 2023 highs once again, GSAT stock has turned some heads recently. Black Friday trading saw a larger 1-day jump in shares compared to the previous two weeks.
Heron Therapeutics (HRTX)
Heron Therapeutics, Inc. is a commercial-stage biotechnology company developing and commercializing therapeutics for acute care and oncology patients. The company recently updated its financial guidance for 2023 and 2024. It now expects full-year 2023 net product sales to be between $123 million and $125 million, with an increase in oncology care franchise sales guidance from $99 million-$103 million to $104 million-$106 million.
For 2024, net product sales are expected to be between $138 million and $158 million, with the oncology care franchise anticipated to grow 3%-5%. Its acute care business is also showing signs of growth expected to be over 48% year-over-year. Full-year 2024 EBITDA (excluding stock compensation) is anticipated to be between ($22 million) and $3 million, showing a potential move towards profitability.
Penny Stocks To Buy Under $1? 3 For Your Holiday Watch List
The company has put a cost reduction plan in place, decreasing operating expenses by 26% in 2023 compared to 2022. Operating expenses for 2024 are expected to be between $108 million and $116 million. The company also expects its gross margin to improve from 41% in 2023 to over 75% in 2025 and beyond.
HRTX stock joins this list of penny stocks with insider trading after its CFO, CEO, and Chief Development Officers bought shares this month. Altogether, the three purchased over 280,000 shares in November. The largest buy came from CEO Craig Collard, with 150,000 shares bought at an average price of $0.9198.
The Metals Company Inc. (TMC)
TMC The Metals Company Inc. is an explorer in the field of critical battery metals. They focus on extracting polymetallic nodules for use in lithium-ion batteries and steel production. One of the more prominent catalysts helping boost momentum is a potential deal with Pacific Metals Co. Ltd.
TMC inked a binding MOU with Pacific Metals for a feasibility study. This study will focus on processing 1.3 million tonnes of polymetallic nodules annually. The nodules will be processed at PAMCO’s Hachinohe facility in Japan starting Q1 2026. This aligns with the planned first commercial production from the NORI-D Polymetallic Nodule Project at the end of 2025. PAMCO’s facility is strategically located and well-equipped for this purpose.
It will produce nickel-copper-cobalt alloy for lithium-ion battery cathodes and manganese silicate for steel manufacturing. This MOU follows a successful pre-feasibility exercise completed in November 2022. PAMCO expects to complete the feasibility study by Q3 2024. This partnership is part of TMC’s capital-light strategy to leverage existing assets and reduce upfront costs.
List Of Penny Stocks To Watch
- MoneyHero Group (NASDAQ: MNY)
- Globalstar, Inc. (NYSEAMERICAN: GSAT)
- Heron Therapeutics (NASDAQ: HRTX)
- The Metals Company Inc. (NASDAQ: TMC)
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