Does Your List Of Penny Stocks Include These 3?
Penny stocks are usually seen as high-volatility, high-risk trades. Rarely does the average retail trader take a large position in penny stocks to invest in them. However, it’s worth mentioning that not all penny stocks are only to be traded. Also, not all penny stocks should be invested in. At the end of the day, using different strategies appropriately can give you an edge when it comes to these cheap stocks.
While there are ways like trading and investing in penny stocks that are money-making strategies, have you ever thought about a hybrid? What I mean by this is that we’ve all been in a trade that we’d wished we stayed in for the longer road. Take many of the coronavirus penny stocks this year, for example. The one that comes to mind is Novavax (NVAX Stock Report). We reported on it during the time it was trading below $5 and stopped after it officially graduated from penny stock levels.
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While those who bought NVAX stock at $4.50 and sold it at $14.50 made a killing – over 220% – the ultimate high reached was nearly $190. Had someone held on for that ride, it would’ve equated to a move of over 4,100%. That would mean $1000 invested (not day traded), would have been worth $41,000 at the high. But let’s face it, rarely does someone ever buy at the ultimate low or high. Furthermore, the likelihood someone actually neglected to take profit at some point before $189 is even more unlikely. There are ways, however, that the initial day trade could’ve turned into a longer-term hold and it’s got everything to do with tier trading.
Trading VS Investing In Penny Stocks
What is tier trading? This is a method that keeps you in winning trades longer. It also allows you to cut losing trades quicker taking a smaller loss in comparison to buying 100% of a position at once. Just as the name suggests, tier trading involves buying and selling in tiers. Executed properly, it aims to keep your overall cost basis lower as the stock climbs and the trader buys and sells on the way up. I won’t get into the full details but this is the basic idea of how tier trading works.
Employing a strategy like this gives a higher chance of carrying a winning position longer than if you were to simply buy all at once and sell all at once. In any case, making money with penny stocks involves a strategy nonetheless. If you’ve got a proven one then that’s half the battle. With this in mind, will any of these be on your list of penny stocks heading into the Wednesday session?
Penny Stocks To Watch: Allied Esports Entertainment
If there’s one arena that is full right now, it’s the virtual ones focused on EGaming. Obviously with the pandemic more people are home now more than years prior. We’re also seeing plenty of people laid off now more than before due to COVID-19s impact. Regardless of this as the case, an industry has begun to emerge that has capitalized on this situation. It’s also a trend that has begun to solidify itself as an actual competitor to live, physical sports. ESports have seen teams of younger adults and even children making big money by participating in competitions.
Allied Esports Entertainment (AESE Stock Report) has been one of the names thrown into the ring that hasn’t really gained much acclaim until recently. After missing earnings estimates in November, we really haven’t heard much from the company. However, there were a few takeaways from the company’s corporate update.
CEO, Frank Ng explained, “While strong results in the In-person pillar of our business was our primary growth driver for the Company prior to the on-set of the pandemic, operational restrictions, including extremely limited social gatherings mandated globally, impacted this part of our business model for both Allied Esports and the WPT(R) during the third quarter. Nonetheless, we generated solid third quarter revenue growth from Multiplatform Content and Interactive Services that helped to nearly offset the impact of the pandemic on our business.”
With the releases of the new Playstation and Xbox gaming consoles, attention on gaming could likely increase. What’s more, is the sector as a whole – VanEck Vectors Video Gaming and eSports ETF (ESPO ETF) – is on fire. ESPO reached new, record levels on Tuesday pushing to highs of $68.15.
Penny Stocks To Watch: Cinedigm Corporation
Cinedigm Corporation (CIDM Stock Report) is another one of the aftermarket movers on Tuesday. Shares reached highs of $0.93 after the market closed. This was a continuation of Tuesday’s regular session. Cinedigm has been in the spotlight recently as streaming stocks have become a focus for traders. The early successes of companies like Netflix, Roku, and recently, FuboTV have stirred up excitement in entertainment tech. Cinedigm provides premium content and streaming services to its customers.
This week, the company inked a deal with Spherex, another entertainment tech company. The two will expand upon Cinedigm’s international footprint. Spherex’s AI and machine learning capabilities will also be used for compliance measures as the companies expands its reach, globally.
While this news has become a fundamental catalyst on Tuesday, it echoes bullish sentiment that began late last week. This was when Cinedigm reported a reduction in total debt by $24.4 million compared to last year. Obviously, during the pandemic, debt has become a huge issue for companies. Many haven’t been able to approapriateiy handle the burden. However, in this case, Cinedigm managed to realize a drop in this amount by 47% compared to the same time last year. What’s more is that the company said that it aims to “aggressively seek more opportunities to further reduce” its second lien and other debt balances.
In light of these recent fundamental milestones, CIDM stock has begun aggressively climbing. Earlier this quarter, analysts at Alliance Global Partners initiated coverage on the company. The firm issued a Buy rating and set a $2 price target.
Penny Stocks To Watch: Lipocine Inc.
Lipocine Inc. (LPCN Stock Report) is one of the penny stocks we’ve discussed over the last year. Cutting straight to the chase with this biotech penny stock, Lipocine has been at the center of speculation and it’s got everything to do with the company’s TLANDO. As we discussed over the weekend regarding LPCN stock, last November, Lipocine failed to wow the FDA with regard to a New Drug Application. Since then the company’s made strides to regain substantial ground during 2020.
But here we are in December, and once again Lipocine’s TLANDO is at a cross-roads. The company said that the FDA informed Lipocine that it is continuing to work towards taking action on the TLANDO New Drug Application “during the week of December 7, 2020.” Some rumblings have surfaced suggesting that Lipocine had preemptively released information relating to this event. While nothing has been confirmed as of 8PM EST, LPCN stock was halted at 6:25 PM EST pending news.
Will this finally be the long-awaited reveal that investors have been waiting for. On the other hand, however, could this be a repeat of last November?