When you think about “frothy stocks” do penny stocks come to mind? This is a term you’ll likely come across in the stock market today. What does frothy refer to in stocks? These are market conditions that typically come before a potential bubble. Usually, asset prices don’t quite line up with underlying fundamental values. A simple demand for stocks drives prices higher to unsustainable levels.
So are penny stocks “frothy”? I think we can all argue that some names, lately “Robinhood penny stocks” have their moments. Look at names like Genius Brands, Urban One, and even Liberty Trip Advisor’s B shares from a few months ago. These all saw periods of parabolic, unsustainable movement based more on hype than on the companies’ fundamentals themselves.
Now, are frothy penny stocks a bad thing? They aren’t if you know how to trade them. Understanding is the first step in making money with penny stocks. That’s specifically understanding things like fundamentals not lining up with the hype, understanding technical levels, and having an idea about the true future prospects of a company. Let’s face it, not all penny stocks are going to be huge runners and stay up “that high”.
While there are some that have definitely gone on to be huge runners (Novavax, for one), a general rule of thumb is that no one ever went broke taking profit. But people have gone broke holding on too long. So, the same thing we always talk about, taking profit early is better than losing everything later. If the trend is truly strong with long-term potential, then there should be opportunities down the line as well. With this in mind, these 4 penny stocks might have been missed amid all of the other “frothy penny stocks” this week.Robinhood Penny Stocks To Trade [or fade]: IZEA Worldwide Inc.
Looking at IZEA Worldwide Inc. (IZEA Stock Report), you’re likely familiar with this penny stock if you’re an avid reader of our articles. This company has been in a spotlight since the start of May as the thick of COVID-19 was wrapping its grip around the market. At the time, the company announced a streaming event to demonstrate the latest capabilities of BrandGraph®, its social intelligence platform. Over the course of the last few weeks, IZEA has continued to keep an open dialogue with the public and even sparked optimism earlier in June. IZEA announced significant deals with Fortune 500 companies.
Last week, the company even reported that it added $13.1 million to its balance sheet. While IZEA stock ended up breaking to highs of over $3, here’s where it got “frothy”. Traders started speculating on much bigger things and as a result, hype fueled momentum more than the company’s developments themselves. As a result we saw this penny stock retract from those highs to where it’s trading at this week.
On Thursday, however, IZEA stock is back in the spotlight following yet another big update. The company has revised and increased its Q2 2020 Managed Services bookings outlook from 25%+ to 40%+/ This was following a series of new customer wins and renewals from existing customers. In addition to previously announced contract wins, the company has seen the return of another Global Fortune 500 customer. IZEA said it was an electronics manufacturer, since the last update the company provided. IZEA stock is back on the radar; will it head back to those previous highs, will it be another “frothy” move, or is this the next leg of a generally bullish trend for 2020?Robinhood Penny Stocks To Trade [or fade]: GNC Holdings Inc.
We talked about this company on our Twitter Feed today. Jokingly we pointed out the fact that shares of GNC stock were gapping up after some apparent “bad news” hit the wires this week. GNC Holdings Inc. (GNC Stock Report) announced that it filed for Chapter 11 bankruptcy. This is the latest in a slew of penny stocks vying for the “B” word as a means to stay afloat.
The company said that it would remain open for business but there have been a few riders to that statement. GNC expects to accelerate its plan to close at least 800 to 1,200 of its stores. As of March 31 the company had roughly 7,300 stores so that would mean about 16% of its stores shutting down.
GNC, a majority of its secured lenders and Harbin Pharmaceutical Group Holding Co. Ltd., (an affiliate of GNC’s largest shareholder) have reached an agreement in principle for the sale of the company’s business for $760 million. This would be executed through a court-supervised auction. While the stock had previously been on fire for most of the 2nd quarter, this latest update put a target on “its back” for selling pressure to come in.
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Once again we see traders flocking to the bankrupt company in droves triggering a premarket gap up to over $1.35. Is there still hope for GNC stock or is this just a momentum fueled breakout that could end in tears for novice traders? Comment below.Robinhood Penny Stocks to Trade [or fade]: Genprex Inc.
The last time we talked about Genprex Inc. (GNPX Stock Report) it was in April and the company had just brought on a new VP of Global Clinical Operations. At the time, GNPX stock was trading around $2.40. Obviously, since then, we can quickly see that things have changed (for the better). GNPX stock is up over 50% as of Wednesday’s closing bell and that momentum continued into Thursday’s premarket session.
Following an interview with a stock market radio show on June 24th, Genprex announced on June 25th that it received United States Adopted Names Council approval of a non-proprietary name quaratusugene ozeplasmid for its GPX-001. This was formerly called Oncoprex™ immunogene therapy, the Company’s lead drug candidate for non-small cell lung cancer. The USAN Council is responsible for selecting generic drug names.
Why is this important? If you’re not up on the latest biotech lingo, it’s a good question. Simply put, obtaining regulatory approval of these adopted drug names is a necessary step in securing marketing approval. “The USAN’s adoption of our non-proprietary name is another step toward advancing our lead drug candidate, GPX-001 for non-small cell lung cancer, toward commercialization,” said Rodney Varner, Chairman and Chief Executive Officer of Genprex. Is this the next catalyst to send GNPX stock higher or just a short term catalyst?Robinhood Penny Stocks To Trade [or fade]: Ekso Bionics
Ekso Bionics (EKSO Stock Report) has been one of the darlings of penny stock traders at times. But the novel bionics company has seen pressure in the market for most of the month. After hitting highs of $5.30 on June 5th, EKSO stock has been sliding ever since. That reached a low of $3 during after-hours trading on Wednesday. This drop was initially triggered by the company announcing a $75 million equity offering. Last time we discussed Ekso, was the same time we discussed Genprex.
Thursday, Ekso released one of its biggest updates yet. Before we get into that you should also understand that it has triggered a huge momentum boost in the market so volatility could be a factor right now. EKSO stock jumped back above $4.40 after announcing receipt of 501 (k) clearance from the U.S. FDA.
What does 501(k) clearance do for the company? It allows Ekso to market its EksoNRTM robotic exoskeleton for use with patients with acquired brain injury. EksoNR is the first exoskeleton device to receive FDA clearance for rehabilitation use with ABI. This significantly expands the device’s indication to a broader group of patients according to Ekso. EksoNR is cleared by the FDA for stroke, spinal cord injury, and acquired brain injury rehabilitation. The device is also CE-marked and available in Europe.