New 52-Week Lows For These Penny Stocks
Penny stocks are well-known for volatility. There’s no denying that fact but it’s something that investors need to deal with on a daily basis. Understanding how to handle big swings is important especially if you want to make money with penny stocks. But in many cases, the “potential” can suck traders in.
What I mean by this is that investors can become enamored with the thought of “the future prospects.” This is good in the aspect that it leads to an open-mindedness for investing. But that can become something very detrimental in the aspect that you forget to stick to your plan.
In this case, sometimes people believe too much of the hype and ignore the signals to sell. Living to fight for another day, as they say, is not a bad idea. That is especially true if it helps you preserve capital.
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The ability to exit a losing position before it creates a losing portfolio is vital to the success of you as a trader. But by believing the hype instead of paying attention to certain cues in the market could leave you holding the bag. Today, we’re looking at a few penny stocks that have left many “holding a bag” but can they ever return to their former glory?
Penny Stocks At 52-Week Lows: Aurora Cannabis (ACB)
Marijuana stocks have gotten hit hard this year. The mix of negative press and declining fundamentals haven’t helped either. The fact remains that these penny stocks continue to attract investors based on their previous successes. It wasn’t that long ago where many of these reached all-time highs. In fact, much of that excitement happened earlier this year.
But after hitting those highs, we saw a breakdown like we haven’t seen in a long time. In fact, many of these stocks hit lows not seen in years. As a result many became penny stocks once again. Aurora Cannabis (ACB Stock Report) was included in this as well. However, this week, the pot penny stock breached new 52-week lows as of Monday’s session. The stock that once traded above $10 a share this year now sits barely above $2 a share. So what happened recently to bring this cannabis stock even lower?
The company announced that its Chief Corporate Officer, Cam Battley was leaving his role at the company. “Our roots run deep, and Cam has been an integral part of the development, growth and expansion of Aurora,” said Terry Booth, CEO of Aurora. “We are grateful for Cam’s leadership and passion over his many years with Aurora. I am sure Cam will be successful as he moves on to tackle Australia.”
As a result of this, the analyst community came in with the start of a downgrade trend. MKM analyst Bill Kirk was first. He reiterated his sell rating on the stock while lowering his price target to C$2 from C$3. “The sudden departure, during a period of insider selling, dwindling cash to cover payables, and sector turmoil does not send a strong message to investors,” said Kirk.
Penny Stocks At 52-Week Lows: Groupon Inc. (GRPN)
There was once a time this year where investors may have been hopeful of Groupon (GRPN Stock Report)’s turnaround. But that all ended this month as shares not only waivered but broke down entirely. This week GRPN stock hit new 52-week lows of $2.17 a share.
What triggered the massive sell-off? Well, this could be a multifaceted ordeal. The initial slide seemed to have begun at the start of the month after questions arose from its last earnings report. The slide continued as more concerns began stemming from its search for a new Ad agency. But the real “nail in the coffin” came after Goldman analysts downgraded the stock to “Sell”.
The Investment bank cited possibly headwinds that could threaten the company’s bottom line. “Against the backdrop of continued macroeconomic challenges (e.g., Brexit), we expect international challenges to persist,” Michael Ng and Alberto Him wrote.
Given this, it’s no wonder why shares lid. However, after hitting these new lows, GRPN stock rebounded briefly in the afternoon on Monday. With still so much more ground to make up, can this move continue or was this just a small blip on the screen of a much larger downturn?