In this article, we’ll explore a few things about penny stocks, what they are, and how to research them. We’ll also talk a little bit about 5 of those stocks that analysts are currently evaluating a buy for. So let’s dive in.
What are Penny’s stocks?
Penny stocks are stocks of companies that trade for less than $ 5. This is according to the Securities & Exchange Commission definition of penny stocks. Needless to say, some traders have set their own rules when it comes to these actions. Many focus on stocks under $ 1. Others actually increase that limit from $ 5 to $ 7 or $ 10. Either way, we’re going to stick to the SEC standard definition for this article.
Trading VS Investing in Penny Stocks
When it comes to research, there really is an endless amount of information you can get rid of. Most of the ways traders and investors do their research begin with the style of market participant they are. What I mean by that is asking yourself, “Am I investing or trading?” and if you are proficient in both, it could be a situational approach. Do you expect the stock to be a day trade or are you looking for an opportunity to start investing in it? No strategy should be the same. In addition, your initial strategy can sometimes turn out completely different.
Suppose you want to trade a stock on a daily basis, but then the business begins to hit major milestones. On this day, the trade might end up turning into an investment. On the other hand, if you initially set a goal of investing for a long time, but the stock ends up reaching certain levels much earlier than expected, your investment may turn into a trade. Taking profits now and reinvesting later is a way for some investors to use larger price spikes over short periods of time.
Penny Stocks Research
But when it comes to research, there are a few essential things to consider. First, check the company’s titles. Here you can see what they have announced, what they are planning, the latest financial headlines, etc. Next, examine the company’s financial statements. We discussed things like insider trading earlier today.
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It also doesn’t hurt to take a peek at stock sentiment by checking out what analysts are saying. This is where today’s article comes in. But just because analysts can say “buy” or “sell” doesn’t mean you need to do “now”. So with that in mind, here is a list of the stock analysts who appear bullish. Do you agree?
Penny Stocks to Buy According to 5 Analysts
- Gevo Inc. (GEVO Stock Analyst Forecast)
- Lexicon Pharmaceuticals Inc. (LXRX Stock Analyst Forecast)
- Xeris Pharmaceuticals Inc. (XERS Stock Analyst Forecast)
- Check-Cap Ltd. (CHEK stock analyst forecasts)
- Mustang Bio Inc. (MBIO Stock Analyst Forecast)
Penny Stocks to Buy [Noble Financial]: Gevo Inc. (NASDAQ: GEVO)
Gevo is no stranger to our penny stocks to watch lists. The company is one of the emerging trends in ESG and alternative energy that we see emerging. The two tend to go hand in hand. ESG or “Environmental, Social and Governance”, focuses on companies looking to reduce their carbon footprint, create a welcoming business environment and manage their operations ethically and efficiently, keeping communities in mind surrounding areas.
In this case, Gevo is gaining a foothold in the renewable chemicals and biofuels segment of the energy industry. More recent attention has focused on expanding the company on one of its larger contracts which we discussed in August. At the time, the company signed a deal with Trafigura Trading LLC, which sparked the initial momentum for the stock in the second half of the year. The drawdown agreement brought Gevo’s total drawdown total to around 48MGPY, collectively representing around $ 1.5 billion in revenue over the term of its contracts. Going forward until December, and the latest milestone secures control of a 239-acre site to meet the requirements of its contract with Trafigura.
At the start of 2021, that’s probably something to watch. Additionally, analysts remain bullish on the stock. Just before the end of the year, Noble Financial raised its target on GEVO stock to $ 5. The firm also maintained its outperformance rating on the stock.
Penny Stocks to Buy [Citigroup]: Lexicon Pharmaceuticals Inc. (NASDAQ: LXRX)
Lexington is one of the biotech penny stocks that we started tracking at the end of 2020. Those who have read our articles long enough can even remember the strong movement in LXRX stock in Q4 2019 as well. Either way, the company is back in the limelight after these final weeks of the year.
Some of the things that have helped this movement come from its Phase 3 studies, SOLOIST & SCORED. Both met their primary endpoints targeting the treatment of heart disease. As a result, Lexicon has aroused the interest of the analyst community. Gabelli & Co and Citigroup have upgraded the business to Buy. Citigroup took it a step further and raised its price target from $ 2.10 to $ 6, putting a forecast for the LXRX stock at around 75% from the New Years Eve closing price.
Another thing to consider is Lexington’s 2020 closing update. The company has started dosing patients in a Phase 2 study of its LX9211 to treat postherpetic neuralgia. Earlier last month, LX9211 received an expedited designation from the FDA to treat diabetic peripheral neuropathic pain. Responding to the more recent launch of Phase 2, Praveen Tyle, Executive Vice President of Research and Development, said, “We believe that LX9211 has the potential to offer a novel therapeutic approach to treat postherpetic neuralgia. . “
Penny Stocks to Buy [Mizuho]: Xeris Pharmaceuticals Inc. (NASDAQ: XERS)
Xeris had a more mixed end to the year. However, during the second half of 2020, equities significantly outperformed compared to the first half. Since the start of the third quarter, XERS stock has managed to climb to 153%. This happened as the company continued to demonstrate significant progress on its pipeline. This type of uptrend has also been echoed by analysts more recently. Mizuho reiterated his buy note on the penny stock during the fourth quarter. It also has a target price of $ 14; a forecast price of XERS stock 184% higher than where it finished last week last week.
Something to keep in mind as the new year approaches is the company’s pipeline. Specifically, its product Gvoke® (injectable glucagon) for the treatment of severe hypoglycemia in people with diabetes. In fact, Xeris has just signed a distribution agreement with a company to market Gvoke® in Israel and the Palestinian Authority. Gvoke® will also be available in Israel prior to registration on a named patient basis from early 2021.
In addition, its recent victory in Europe brings its Ogluo ™ (glucagon) closer to commercialization. Xeris has received a favorable opinion from the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency. The CHMP recommended Ogluo for the treatment of severe hypoglycemia in adults, adolescents and children aged 2 years and older with diabetes mellitus. A final decision on Ogluo’s marketing authorization application in the European Union is expected in the first quarter of 2021. If successful, the company could launch Ogluo in select European countries in the second half of this year.
Penny Stocks to Buy [HC Wainwright]: Check-Cap Ltd. (NASDAQ: CHEK)
Check-Cap is another of the biotech penny stocks that we have been following for some time. More recently, however, the commercial momentum has really accelerated. In fact, on December 31, CHEK stock had its second highest trading volume of the year with over 26 million shares traded at the closing bell. Additionally, this momentum continued well into the secondary market session. CHECK hit an extended hours high of 60 cents before finally settling around $ 0.552. This was 20% higher than the price of $ 0.46 it closed during regular session.
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Not only has the company received a favorable response thanks to a new life from the Nasdaq, Check-Cap may also have other fundamental things to watch out for. First, at the end of last week, the Nasdaq granted a 180-day extension for the company to comply with the market operator’s minimum bid price requirement. While this is favorable and prevents any short-term write-offs, Check-Cap also has potential milestones to consider. The most recent was discussed in its November trade update. An investigational device exemption request has been submitted to the FDA for a pivotal C-Scan study. This is the company’s screening test to find polyps before they turn into colorectal cancer.
Alex Ovadia, CEO of Check-Cap, said the company plans to “provide investors with a further update on the timeline for the launch of the US pivotal study, scheduled for 2021, in accordance with FDA guidelines. .
In light of this, analysts have become more optimistic. At present, HC Wainwright has a purchase on the business. He also placed a price target of $ 1.50, 226% higher than Thursday’s closing price.
Penny Stocks to Buy [B. Riley]: Mustang Bio Inc. (NASDAQ: MBIO)
Mustang Bio also had a stronger second half of 2020. Despite highly volatile weekly swings, MBIO shares remained higher on New Years Eve compared to where they were trading in early July. In addition, you will notice that the second half of December was also strong. MBIO managed to recover from a previous sell off, which took the stock down from $ 3.99 to $ 2.55. This decrease follows the presentation of interim phase 1/2 data for its lymphoma treatment, MB-106.
However, some significant insider buys as well as the start of a new Phase 1 trial seem to have fixed things a bit. Director Lindsay Rosenwald picked up 100,000 MBIO shares at an average price of $ 2.66 mid-month. For its Phase 1 trial, the focus is on the safety and feasibility of administering MB-101 to patients with leptomeningeal brain tumors.
Ultimately, analysts remained bullish on the penny stock. Towards the end of December, B. Riley reinstated Mustang with a buy note. He also has a price target of $ 13 on the share. Considering that MBIO closed last Thursday at $ 3.79, B. Riley’s expected MBIO share price is 243% higher than current trading levels.