Have you ever traded penny stocks or are you just getting your feet wet with these low priced stocks? No matter what kind of experience you have, it’s a safe bet that you know these types of stocks are risky. But that doesn’t mean they aren’t profitable.
In fact, if you talk to any pro trader, they’ll likely explain how they like to trade penny stocks. In general, small-cap stocks are too active to simply ignore for most traders. So, how can you really make money with penny stocks?
Besides “trial and error,” research and planning are key. It’s true that you can get lucky here and there. But to become consistently profitable, you need proper education and a real trading strategy to stick to.
Greed can easily sway you from your plan; who doesn’t’ like to make more money? But the fact remains, even if you sell out of a winning trade and it continues higher, you can always buy back in and ride the next wave.
Are Penny Stocks Profitable?
So, when it comes to answering the question, “Are penny stocks profitable,” you should take all of these things into account. Are they profitable for someone who blindly picks a stock without any research? It may be for a fleeting moment but not likely a long-term result.
However, if you have a clear approach to trading and a real strategy before going into a trade, the chances of becoming consistently profitable will likely be greater. In this penny stocks article, we went over several things including how to research corporate filings. One of the most clear-cut ways of getting company info is through its filings.
Sure, you can read the news. But sometimes public companies will rely solely on filings to get information out to the public. In these cases, it can mean the difference between catching a big win early or missing out completely. Furthermore, you’ll want to understand the industry a stock is in.
I don’t care how popular a company might be if its industry or sector is getting hammered, it might be a sign to put on the breaks and wait for a sector reversal. We clearly saw that this week with gold stocks.
Penny Stocks To Watch
As far as finding the best penny stocks to watch or even top penny stocks to buy, I’d suggest putting together a list, first. This will allow you to get a “lay of the land” and guide you down the path of deeper research. This week, we saw several companies report big news and with that came monstrous rallies. This having been said, here are 4 names that could be on penny stocks watch lists later this week.
Chico’s FAS (CHS)
Chico’s (CHS Stock Report) is a brand house home to White House Black Market, Soma, TellTale and namesake, Chico’s. The specialty retailer targets women’s clothing and accessories. Over the last year, the company has battled troubled waters of brick and mortar retail. However, recent news suggests that it’s trying to turn that tide.
This week, Chico’s reported its Q4 outlook. In the report, the company revealed several milestones. First, it raised its fiscal, Q4 outlook. Furthermore, Chico’s also restated that it’s focusing on continuous improvement in its business.
The company expects Q4 net sales to be flat. This may not seem all that impressive. But considering it was declining previously, it’s a step in the right direction. The company also will present info and conduct discussions at an upcoming investor conference next week.
Of course, this is something to note (Jan. 13) as these dates can become important if the company releases some big updates at a conference. The story’s obviously developing. But thanks to this, CHS stock has started to make it’s way back toward it’s previous, Q1 2019 levels.
Seneca Biopharma (SNCA)
The next on this list of penny stocks, Seneca Biopharma (SNCA Stock Report) has no headlines nor does it have any public filings. So why have shares begun to move so aggressively? Well, diligence is key but luckily for you, you’re reading this article. Today it was revealed that the company was actually granted a patent by the European Patent Office.
The patent is for the “Transplantation of human neural cells for treatment of neurodegenerative conditions.” Could this be the next step in developing its NSI-566 treatment? Why I say this is because the treatment is specifically designed around neural stem cells. This is developing as things just began to unfold later in the afternoon. However, it could become one of the penny stocks to watch this month.
Nabriva Therapeutics (NBRV)
Next, Nabriva Therapeutics (NBRV Stock Report) came out swinging on the afternoon of January 8. After a lackluster 2019, things look like they might be heading in the right direction in 2020 for the company at the very least. Nabriva said this week that the US FDA received its New Drug Application resubmission for its therapy, Contepo. It’s designed to treat urinary tract infections.
Though it hasn’t been formally “accepted” or “approved” by the FDA, the fact that Nabriva received the acknowledgment of receipt could be meaningful. It’s still very early, however, the resubmitted data was said to be supported by data from a pivotal Phase 2/3 clinical trial.
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What’s next? The goal date for the completed review of the NDA is set for June 19 of this year. So, there’s a bit of a runway to keep in mind. Needless to say, it was an aftermarket development and could become a point of focus for the markets come January 9th.
Shares of ToughBuilt (TBLT Stock Report) haven’t lived up to the namesake over the last 12 months. But since hitting 52-week lows of $0.0906 in November, it would seem TBLT stock found a home under $0.20. That was the case until recently. Call it late December when ToughBuilt’s stock began to see some life coming back.
Furthermore, this week, shares continued to climb to highs of more than $0.40 during after-hours trading, January 8th. But will this remain the case later in the month? Let’s see what the excitement was about so far in January.
There were a few things to shed light on. First, the company regained compliance with NASDAQ. Where it’s usually a minimum price threshold, ToughBuilt regained compliance thanks to it having much more than the required stockholder’s equity of $2.5 million. In this case, the company’s stockholder’s equity sat at $5.7 million as of December 23, 2019.
On top of that, the company came out with more news this week. ToughBuilt announced a historic year over year increase in sales growth. The company’s 2019 UK sales came in at $1.75 million. This was up significantly from $726,000 in 2018. That’s a jump of over 140%. Chief Executive Officer Michael Panosian said, “Our over 100% growth in U.K. sales this year is a huge win for the Company. It shows the popularity of our products and brand acceptance in Western Europe, a market we are focused to grow quickly.”