Are penny stocks part of your investing and trading strategy? If they’re not, you might want to reconsider. While plenty of these stocks under $5 are highly volatility and many end up failing, there’s a whole other side to this niche. In fact, the other side involves some of the biggest banks and advisory firms in the business weighing in on their potential.
Yes, I’m talking about analysts. Sure, there are smaller firms out there that might not hold a lot of weight. Family offices obviously have different goals in mind compared to big banks. But considering that Credit Suisse, Bank of America, Citigroup, and others are also giving outlooks on penny stocks, I’d say there’s some merit to these cheap names.
Whether you want to believe it or not, there are plenty of these companies that end up truly growing into formidable companies. This year, that growth was accelerated by the coronavirus pandemic. More than just a few companies trading as penny stocks ended up seeing price increases to much higher levels.Are All Penny Stocks Worth It?
One of the top names we’ll continue referencing for obvious reasons is Novavax (NASDAQ: NVAX Stock Report). The company grew from just a penny stock to a company valued at nearly $190 a share within a few months. We also saw the company obtain significant government funding for its potential vaccine candidate.
Not all penny stocks will mirror this trend. But that doesn’t mean they can’t become successful. I find it that when traders first approach these companies, they are skeptical. They should be skeptical so no one can blame them. But understand that not all penny stocks are just quick breakout movers.
Some actually go on to climb for months, even years. It’s just about finding the best names to track. Needless to say, the future is never guaranteed. As we’ve seen with other companies like Hertz Global (OTC: HTZGQ Stock Report), the pandemic has brought a much different impact on the penny stock. It sent Hertz stock into a tailspin and the company into bankruptcy. Even though analysts might not rate HTZGQ highly right now, there might be some merit to keeping an eye on the company.
Since there is a pandemic and travelers still skittish about air travel, car rental companies could be the ones to benefit. The upcoming Thanksgiving and then Christmas season could be two important pieces of the puzzle. Needless to say, this could also be short-term speculative hype driving Hertz stock right now. Unfortunately, if you’re looking for analysts to back you up on a bullish thesis, you’re not going to find that. The most recent ratings have all been downgrades and price cuts.What Do Analysts Think About Penny Stocks?
Analysts can play a role in deciding future trends. But they aren’t the end-all to base your strategy on. It’s not a bad idea to see what they like or don’t like about certain companies. At the end of the day, it’s up to you to decide if you’re a buyer or not. Several firms have weighed in on these names and dubbed them penny stocks to buy right now. Do you agree?Penny Stocks To Buy Now [according to analysts]: FuelCell Energy Inc.
If you’ve been a reader for a while now, I’m sure you remember Plug Power (NASDAQ: PLUG Stock Report). It was a company that we had covered since early last year. In fact, PLUG stock was trading around $2, believe it or not. Fast-forward to this year and shares of the fuel cell company have reached more than $19 a share at times. Obviously, with such progress in the market, traders will look for “sympathy trades”. When that company also has other fundamental progress to note, it can create an interesting scenario.
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FuelCell Energy (NASDAQ: FCEL Stock Report) has become one of these “sympathy” movers alongside PLUG stock. The company has also focused on expanding its fuel cell business. Amid months of progress, the most recent momentum has come from a new U.S. Department of Energy project award. The company will work in collaboration with the Office of Nuclear Energy for an $8 million funding award supporting the design and manufacturing of SureSource. This is an electrolysis platform able to produce hydrogen.
There were a string of negative headlines earlier this quarter that questioned the validity of the company itself. While that might’ve been a short-term hurdle, it didn’t stop analysts from weighing in on the company. The most recent rating comes from JPMorgan Chase which initiated coverage on FCEL stock with an Overweight rating. Other analysts include Oppenheimer, Cowen, and Craig Hallum.Penny Stocks To Buy Now [according to analysts]: DBV Technologies
One of the popular penny stocks to watch this week is DBV Technologies (NASDAQ: DBVT Stock Report). The company hit scanners this week following news of filing and validation of its marketing authorization application for DBV’s Viaskin Peanut product. The company has designed this as a potential defense against certain food allergies.
Furthermore, DBV said it expects to receive the first set of questions from the European Medicines Agency in about 120 days. This news triggered a strong move in shares on Monday. However, as you’ll see, by the end of the session, DBVT stock dipped down significantly.
One thing we always talk about is follow-through. How will the stock perform the next day or during the next week? So far on Tuesday, DBVT has maintained levels over 30% higher than where the penny stock closed on Monday afternoon. Something that wasn’t really highlighted yesterday was a recent analyst rating on the company. Societe Generale recently upgraded its Sell rating to a Hold this week. In addition, both Citigroup and HC Wainwright carry Buy ratings on DBVT.Penny Stocks To Buy Now [according to analysts]: BioLineRx Ltd.
BioLineRx Ltd (NASDAQ: BLRX Stock Report) might be a company you’re tired of hearing about if you’ve read our articles from the last week or so. We discussed the major breakout BLRX stock saw at the end of October. This was triggered by positive phase data. BioLineRx announced positive results from interim analysis of its GENESIS Phase 3 trial. Specifically, the company said that results were significant and that this form of treatment represented a “significant unmet medical need” in multiple myeloma.
Since then it’s been one of the top penny stocks to watch this week. Shares pulled back from the $3.10 high from last Friday. But again, like DBVT, it’s about the follow-through. So far we’ve seen BLRX experience continued trading momentum and now price has tested levels above $2.70 on Tuesday.
This year, 3 analysts picked up coverage on BioLineRx. Oppenheimer, H.C. Wainwright, and, most recently Maxim Group all follow the company. While Oppenheimer has an $11 target on the company, the other two simply have Buy ratings. Given the recent progress from its GENESIS trial, will you add this to your list of penny stocks to buy right now?Penny Stocks To Buy Now [according to analysts]: Nokia
When we put together the list of penny stocks on Robinhood to watch for November, Nokia (NYSE: NOK Stock Report) took one of the spots. It’s been a rough go for the telecomm company over the last few months. A Q3 earnings miss put the final straw in place to see NOK stock tumble this quarter. However, over the last few days following the update, the penny stock has managed to hold some semblance of support above $3.20.
Some analysts like BofA Securities ended up downgrading Nokia stock. The bank changed from Buy to Neutral in light of these earnings. However, other analysts like UBS Group and Deutsche Bank actually reiterated their Buy ratings on the penny stock. Exane BNP Paribas didn’t go as far as a Buy rating but it did upgrade its Underperform to Neutral at the end of October. With new management in place, the next few months should be ones to keep a close eye on.
On November 15th, Nokia will discuss a full review of the company’s strategy, operations and financial targets.
“Our goal now is to ensure that our strategic framework is supported by concrete operational plans from the businesses, factors that support our ability to generate stronger margins.”Pekka Lundmark, CEO, Nokia on its Q3 earnings call