Are These Robinhood Penny Stocks Worth The Risk?
When it comes to penny stocks on Robinhood and Webull, two popular trading apps, you need to take some things into consideration. Aside from the slower speed in trade execution, users are also limited in access to certain stocks. Specifically, the vast majority of OTC penny stocks are inaccessible on the trading apps. While this might not seem like a big deal to some, others find it difficult to navigate.
Whether or not that is your personal preference or not, I can tell you trading marijuana penny stocks is a task. If you’re a Robinhood trader or use Webull, you can count out most US marijuana stocks. That’s because many are dually listed, with their main exchange being foreign. What that means is they are listed in the US on the OTC. There are obviously ways around it like buying the US Cannabis ETF – MSOS – however, direct exposure is not best suited for Robinhood traders.
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Needless to say, that doesn’t mean all penny stocks are inaccessible. There are plenty of NYSE and NASDAQ names to choose from. This is also one of the likely reasons we see companies like Aurora or Canopy Growth benefiting from U.S.-centric headlines. The millions of new traders on these apps want exposure and the only way to get it is via those foreign names.
Are Penny Stocks Worth The Risk?
Aside from pot stocks, however, most Robinhooders were able to access the latest surge we’ve seen in electric vehicle stocks recently. The vast majority of breakout names traded on major U.S. exchanges. What’s more, is that the momentum from EV seems to have trickled over into energy penny stocks and even tech stocks as well. Considering most of the big movers of November started as penny stocks, it makes a bit of sense.
Herein lies a bit of a conundrum. Just because stocks are “cheap” are they worth the risk? The lower the price, the less it takes to see percentage gains. Case in point, penny stocks under 10 cents need to only move a penny to record a meaningful gain of 10% or more. Stocks over $4 would need at least 4 times that to do the same. The downside risk is that a small move lower can equate to larger losses. However, the flip side to that is a small move up can mean turning a small sum into a large one quickly. With this in mind, are any of these Robinhood penny stocks on you watchlist heading into the rest of this week?
Robinhood Penny Stocks To Buy [or sell]: Vertex Energy Inc.
Vertex Energy Inc. (VTNR Stock Report) has been one of the top-performing energy penny stocks in November. Since the start of the month, Vertex stock has climbed from around $0.42 to highs this week of $0.76. This comes during a time of upbeat sentiment in the energy sector itself.
Vertex refines hydrocarbon and caught a recent bump after reporting an EPS beat in its Q3 earnings results this month. Estimates pegged the company at a loss per share of 15 cents. Vertex recorded a loss per share of just 10 cents. With a focus on renewables and net-zero emissions initiatives ahead of a Biden presidency, Vertex has identified certain opportunities it looks to capitalize on heading into 2021.
“Beginning in the first quarter 2021, we plan to begin supplying our Marrero refinery with pre-treated intermediates from Myrtle Grove , consistent with our continued focus on asset optimization. We are currently in discussions with third-parties to fund a project at Myrtle Grove that would allow us to begin commercially treating raw vegetable and other organic waste oils that refiners can use as a feedstock in the production of renewable diesel fuel.”
Benjamin P. Cowart, President and CEO of Vertex
VTNR stock has experienced an uptick in trading volume. However, compared to some of the stocks we look at, overall, it is relatively low. Considering the recent uptick, however, will this momentum continuing building upon itself heading into the rest of Q4?
Robinhood Penny Stocks To Buy [or sell]: 9F Inc.
If there’s one group of penny stocks that has been incredibly volatile and turned heads this year, it’s been China-based companies. Many of these have very low floats and tend to make parabolic moves “out of nowhere”. In this case, 9F Inc. (JFU Stock Report) has been a previous example of this. Shares of JFU stock took off back in October. In a span of 3-days the penny stock jumped 127% on heavy volume.
One of the hot markets in China right now is FinTech. 9F offers a digital financial account platform and ate last year, it launched 9F Superbrain. The product uses artificial intelligence, cloud, and blockchain technologies. The platform provides its financial institution partners and merchant partners with a customized modularized service package.
Obviously, the latest surge in things like bitcoin and blockchain stocks have helped give related names a boost. On Tuesday, JFU shares jumped over 35% on some of its highest volume since late-October. There weren’t any headlines to accompany the move. With after-hours momentum also becoming a factor, JFU could be one of the penny stocks on Robinhood to watch before the Thanksgiving Holiday.
Robinhood Penny Stocks To Buy [or sell]: Weidai Ltd.
Another Chinese fintech stock, Weidai Ltd. (WEI Stock Report) isn’t a stranger to big moves quickly either. Back in October, the penny stock made a move from $0.85 to nearly $5.50 within a single day. While that move didn’t last more than the day, it happened, all the same. The company is an auto-backed financing solutions business based in China. Weidai uses a risk management system to turn used cars into an investment strategy. Its platform also allows institutional financing for those who wish to buy used cars in the Chinese market.
Similar to 9F, Weidai doesn’t release much news or filings for that matter. It’s set to hold a shareholder meeting in December but no major topics are up for vote. Aside from this, we can take a look at its 6-month operating results for clues on corporate progress & developments. For the period, Weidai reported over $123 million in total net revenues and an EPS loss per share of $0.97. Most of its revenues came from loan service fees followed up by financing income as a distant second.
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The company called 2020 a year of “comprehensive transformation” for the lending industry. Since July Weidai has been cooperating closely with local government in its business operation. With fintech penny stocks continuing to grab interest, it will be interesting to see how WEI stock performs heading into the end of the month.