Penny stocks are one of the things that keep traders excited. The obvious volatility and potential of these cheap stocks have made their mark. Since the onset of the pandemic, thousands of new traders have come into the stock market. They’ve got a singular goal, which is to capitalize on stocks, options, and futures.
Needless to say, for broader markets, it isn’t all sunshine and rainbows despite the last several weeks of trading action. The S&P500 and its associated SPY ETF surged to near-2023 highs in November. But that has cooled off dramatically as December approaches.
For the last week, the SPY, Nasdaq, and Dow have traded in tight channels. This has given little to no volatility for anyone trading the overall market. That hasn’t been the case for penny stocks, but first, why is the November stock market rally cooling?
The Stock Market Today
The stock market on November 28, 2023, showed signs of caution among investors. This was indicated by the flat opening of major indexes like the S&P 500, Dow Jones, and Nasdaq Composite. This caution stemmed from the speculation of a potential pullback after a significant November rally, which had led to the best monthly performance for stocks in over a year.
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Optimism about peak U.S. interest rates and a strong economy had fueled this rally. However, concerns about economic softness were emerging as market gains stalled. Investors were also focused on upcoming key economic data, including a GDP update and the PCE index, a measure closely monitored by the Federal Reserve. Additionally, a report on consumer confidence was awaited to provide further insights into consumer spending.
The retail sector was under scrutiny, especially following Black Friday and Cyber Monday, with specific attention to online shopping trends. The performance of retail stocks like PDD and Affirm also came to light. In the commodities market, oil prices increased by around 1%, influenced by a weaker dollar and anticipation of production cuts by OPEC+. This scenario reflected a market where previous bullish trends were showing signs of slowing down, leading to a cautious approach by investors.
Penny Stocks To Watch
Despite a lack of volatility in broader market segments, penny stocks are a whole other ball of wax. Even if the stock market is down, trading sideways, or slightly up, chances are there are more than a handful of penny stocks outpacing major indexes daily.
While this is typically not the case over the long term, day-to-day trends show that you can find a few cheap names making big moves. In this article, we look at some of the most active penny stocks today, and recent catalysts, and then you can decide if they deserve a place on your list of penny stocks to watch this week.
- Iris Energy Limited (NASDAQ: IREN)
- Moneyhero Ltd. (NASDAQ: MNY)
- Coeur Mining, Inc. (NYSE: CDE)
- Opendoor (NASDAQ: OPEN)
Iris Energy Limited (IREN)
Iris Energy is a sustainable Bitcoin mining company. They focus on utilizing renewable energy and supporting the global Bitcoin network. While Bitcoin prices slumped over the last 24 hours, IREN stock has bucked this trend. This month the company announced its October 2023 monthly investor update.
The update included a partnership with WEKA to optimize generative AI workloads and an expansion to 9.4 EH/s. Iris Energy acquired 1.4 EH/s of Bitmain S21 miners and continued construction at their Childress site. The update highlighted improved revenue and operating hashrate. However, there was a decrease in Bitcoin mined due to increased network difficulty.
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Given the state of the cryptocurrency arena, IREN stock could be more influenced by sentiment within the sector. Bitcoin prices have rebounded in the stock market today. Meanwhile, the prices for other currencies, including Ethereum, are following the trend. ETH has bounced back toward its 2023 highs this week.
Moneyhero Ltd. (MNY)
Last week we brought attention to MoneyHero Group after a recent IPO flop. It was formerly CompareAsia Group Capital Limited and is a financial products platform in Greater Southeast Asia. The company connects consumers with financial institutions and recently 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.
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.
Coeur Mining, Inc. (CDE)
Coeur Mining, Inc. is a U.S.-based precious metals producer. They own four major mining operations. These include the Palmarejo gold-silver complex in Mexico. It has also popped on news catalysts from earlier in the month.
The company announced an agreement to acquire mining concessions near the Palmarejo Mine from Fresnillo plc. The deal involves a $25 million cash payment and future royalties on discoveries. The concessions span nearly 7,000 acres near Palmarejo’s current operations. They include areas with significant mineralization and historic resources.
This acquisition aims to fill strategic gaps, increasing land holdings by nearly 20% and forming a large, contiguous mining district. The transaction terms include a $10 million upfront payment, with additional payments over two years and royalties on new discoveries. This expansion represents a strategic move to increase resource potential and extend the mine life of Palmarejo.
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This week Coeur presents at the Bank of America Leveraged Finance Conference today. Its leadership will also participate in the Scotiabank Mining Conference on Wednesday.
Opendoor (OPEN)
Opendoor Technologies Inc. specializes in streamlining residential real estate transactions. The company recently reported its financial results for the third quarter of 2023. Despite a significant revenue decrease to $980 million, down 71% from 3Q22 and 50% from 2Q23, the company marked a return to a positive contribution margin.
The quarter saw the sale of 2,687 homes, a decrease from previous quarters. The net loss for the quarter stood at $106 million, an improvement from the $928 million loss in 3Q22. Adjusted net loss was reported at $75 million, better than the previous year’s $328 million. The positive contribution margin of 4.4% reflects operational improvements and cost-saving measures implemented by Opendoor.
A significant drop in revenue and the decreased number of homes sold might be a near-term concern. However, the improvement in net loss and the positive contribution margin might be seen as signs of effective cost management. Whether these factors lead to cautious optimism in the market is to be seen. However, since the earnings release, OPEN stock has been on the rise, trading back above $2.70 for the first time since early October.
Deutsche Bank recently initiated coverage on Opendoor. The firm has a Hold rating. It also set an OPEN stock forecast price target of $2.80, which is nearly the price that shares are trading at this week.
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