3 Epicenter Penny Stocks Outperforming the Stock Market Today
Is there a silver lining for penny stocks amid this sea of red on Wednesday? The tale of the tape might seem bleak but it’s all perspective. There’s a saying that goes “When they’re yellin’, they’re sellin’ and when they’re cryin’ they’re buyin’,” let me explain. This old adage refers to the talking heads and market analysts saying one thing and doing another. This has happened countless times in the history of the stock market.
Pundits paint a bleak or rosy picture of the market then take advantage of the situation they just created. Whether it’s buying as the market oversells or selling as the market euphorically buys, these investors aren’t stupid. They take advantage of the trends at work. Whether or not they were triggered by direct comments made is another story for another day.
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However, the point is clear. You’re here to make money with stocks. So play like the smart money bets play. See where the flow is getting directed and look for opportunities. It’s great to grab the coattails of a big breakout move. The other side of that discussion focuses more on capitalizing on an optimal cost basis for a longer-term swing trade or investment. While it’s never easy to “time the market”, there are things you can do in order to position yourself properly. The first of which is do your own research.
What Are Epicenter Stocks?
Half the reason why that saying holds weight is because there’s some truth to it. The average retail trader tends to listen to someone on TV or social media if they feel as though that person is “more experienced”. But the fact of the matter is that they’re looking at the same news and filings that you are. With a level playing field, it all comes down to risk/reward. When we’re talking about penny stocks, that ratio couldn’t be higher. While there’s plenty of “cryin’” going on right now, which stocks are getting some of the “buyin’”?
This leads me to the focus of the article: epicenter stocks. Specifically epicenter penny stocks. This idea was made popular by Tom Lee of Fundstrat who said epicenter stocks are likely to succeed if/when there was economic recovery. While the current state of things might seem like that is a bit far off, it hasn’t prevented speculative buying from coming into the market. With this in mind, are any of these potential epicenter stocks on your list of penny stocks right now?
Epicenter Penny Stocks To Buy [or avoid]: Weidai Ltd.
Weidai Ltd (WEI Stock Report) has been one of the China-based penny stocks to watch recently. While there haven’t been many headlines from the company, specifically, sentiment has grown bullish for related names. Where the epicenter stock comes into play is in Wedai’s business model.
The company is an online finance marketplace business in China. Its platform connects smaller borrowers with both online investors and institutional funding partners. It also involves auto-backed lending as its preferred method of financing. If there’s one group of stocks that’s been beaten down, it has been financials. While North America and Europe continue dealing with the second wave of coronavirus, China seems to have begun to turn around its economy. For this reason, many Chinese penny stocks have been almost treated as a safer haven right now.
According to reports from Reuters, China’s economy has steadily recovered from a coronavirus-induced dive earlier this year. Furthermore, the overall output could rebound sharply in 2021, a Reuters poll showed. In light of this, business and small/micro lending could become a niche market to expand upon in the People’s Republic. Will that translate to further momentum for Chinese financial stocks?
Epicenter Penny Stocks To Buy [or avoid]: Zedge Inc.
Zedge Inc. (ZDGE Stock Report) could be another company on the list of epicenter penny stocks to watch right now. If there’s one thing we’ve learned it’s that digital-centric companies managed to weather the storm a bit better than other industries. As such, we also saw a rise in things like online shopping, eSports, and gaming, as well as a boost in digital currency prices. Zedge focuses on mobile publishing and content.
Its clients can launch things like virtual storefronts right in Zedge. They then have the ability to market and sell content via the built-in user base. With over 436 million downloads and roughly 29 million monthly users, the popularity of its app has grown. The company reflected this in a recent earnings report for its fiscal fourth quarter.
Zedge reported a strong earnings beat with EPS coming in at $0.04 compared to the EPS loss of $0.04. In addition, the company recorded $2.7 million in sales which beat the $1.96 million estimate. This boiled down to revenue increasing 39.2% over last year. Meanwhile paid subscribers jumped 277% from last year as well as over 26% from its fiscal third quarter. With more people potentially stuck home and in front of either a computer, TV, or mobile device, will digital marketing companies experience another uptick in activity into the end of the year?
Epicenter Penny Stocks To Buy [or avoid]: Chico’s FAS, Inc.
You might not even consider traditional retail as part of any list of epicenter stocks. However, as we’ve come to learn, the traditional brick and mortar companies that best weathered this storm took up a brick and click approach. They expanded upon or implemented a stronger online presence to take advantage of higher web based shopping as a result of lockdowns and social distancing.
While it’s been relatively flat for most of the month, Chico’s FAS, Inc. (CHS Stock Report) bounced back a bit on Wednesday. This came after the company announced that it had begun accelerating its digital transformation. What does that mean? According to the company, Chico’s has begun investing in new strategic relationships with tech companies including Salesforce (CRM Stock Report), Contentstack, and Afterpay. The company said its goal is to modernize its customers’ digital experience.
The company also employed a “buy now, pay later” initiative during the holiday season. This involves interest-free payment plans for customers who use Afterpay to buy products.
“As we enhance our position as a customer-first company, organizational agility and speed-to-market are top priorities. Our teams have come together to accelerate critical areas of our digital transformation in months instead of years,” said Laura Loughran, Senior Vice President of Technology, Chico’s FAS.
In light of this digital transformation, will CHS be on your list of epicenter penny stocks to watch?