This year has been one to remember for penny stocks. While 2020 got off to a rough start, in the past six months, many small-cap stocks have seen dramatic gains. Specifically, energy penny stocks are seeing heightened attention in recent weeks. There are a few reasons why this is the case. For one, COVID has resulted in a lower energy demand than in many years prior.
With everyone stuck at home around the world, less fuel and energy is being consumed. But, with a vaccine being distributed as we speak, some investors believe that energy consumption could move back toward pre-COVID levels. This is, of course, relatively speculative but if COVID cases decline, more people will undoubtedly be out and about.
The second reason comes as Joe Biden was elected President of the U.S. This pertains greatly to electric vehicle penny stocks and renewable energy stocks. Biden has stated that he plans to bring the U.S. toward renewable energy dependency within the next several decades. This means that the market for solar, wind and other renewables could grow dramatically. While a lot is up in the air right now due to increasing COVID cases, investors continue to believe that energy penny stocks may see their day soon enough. With this in mind, let’s take a look at four penny stocks that investors are watching right now.Energy Penny Stocks to Watch
- Torchlight Energy Resources Inc. (TRCH Stock Report)
- Fuel Tech Inc. (FTEK Stock Report)
- Gevo Inc. (GEVO Stock Report)
- Orbital Energy Group Inc. (OEG Stock Report)
Torchlight Energy Resources Inc. was originally a Texas-based, oil and gas exploration company. The company’s primary assets are located in Western and Central Texas, where the concentrations of oil and gas are very high. Torchlight Resources has gained a lot of popularity in the past few months as a leading energy penny stock. In the past month, shares of TRCH stock are up by over 70%. Since September, shares of the company are up by over 130%. So what’s driving this massive gain for TRCH? Well, one of the main reasons is the increasing demand for oil and gas. With people beginning to resume travel plans and commutes, the demand for energy could continue to rise in the near future. But that may have all changed with its more recent venture.
Torchlight announced that it entered into an agreement with Metamaterial, to loan the latter around $500,000. The goal with this is to offer Metamaterial the funds it needs to continue its research on alternative energy. This comes only a week or so after the two signed an agreement for a business combination. John Brda, CEO of Torchlight, stated in regard to the combination that “we are very excited to sign the definitive agreement with Metamaterial. We believe this transaction provides our shareholders with the best opportunity moving forward. Metamaterial offers proven disruptive technology with strong environmental, social, and governance priorities.”
With all of this currently in the works, it seems as though TRCH stock has shifted gears into renewable energy. In light of this, the “former” oil and gas company could be one to watch for new advancements in renewable and alternative energy initiatives.Energy Penny Stocks to Watch: Fuel Tech Inc.
Fuel Tech Inc. is another energy company with proprietary technologies to curb pollution, aid in water treatment, and other applications. The company states that it is the leader in nitrous oxide reduction solutions. In addition, the company is working on solving many of the fuel-related issues that we have today. While FTEK stock is a penny stock, on December 22nd, it rose by around 10% to $4.26. In the meantime, however, let’s explore what Fuel Tech has been up to in the past few months. November saw Fuel Tech announce its Q3 2020 financial results. In the results, the company stated that it had some trouble during the third quarter due to covid.
Vincent Arnone, CEO of Fuel Tech, stated that “although we have experienced some deferred decision-making on the past of some customers due in part to the uncertainty created by the effect of the COVID-19 pandemic, I am very proud of how our team has continued to navigate these challenging times.”
During the quarter, Fuel Tech posted a solid 26% increase in its consolidated revenues over Q3 2019. In addition, the company stated that net income came in at around $2.4 million compared to a loss of $1.3 million in Q3 2019. Despite the effects of covid, Fuel Tech has continued to grow its business. Whether or not it can continue to do so remains to be seen. But with these promising results, investors can choose whether or not to consider FTEK stock a penny stock to watch.Energy Penny Stocks to Watch: Gevo Inc.
Gevo Inc. is a renewable chemicals and biofuel company working out of the U.S. In the past few months, GEVO stock has seen some considerable gains that should not go unnoticed. Over the past month, shares of GEVO stock are up by over 30%. In the past six months, shares are up by a solid 134%. This large gain reflects the optimism surrounding a post-covid energy boom.
In addition, Gevo’s work in the renewables market means that it could be a company with long term business prospects. On December 21st, the company announced that it has exercised on an option to buy around 240 acres of land in South Dakota. The company states that this facility alone could produce roughly 45 million gallons of jet fuel within the foreseeable future.
The company previously inked a deal with Trafigura, a major energy player. The deal brought Gevo’s total off-take sum to roughly 48MGPY, representing a value of about $1.5 billion of revenue across the life of its contracts. This land option deal is one of the conditions required by its contract that Trafigura Trading LLC. It also represents a major milestone for the company.
Investors should also note that GEVO stock is known to be quite volatile. As mentioned earlier, the election of Joe Biden means that the U.S. could be moving toward alternative energy in the coming years. With this in mind, Gevo might have a future in the U.S. energy market. Whether or not this makes it a penny stock to watch remains up to investors to decide. But I’m sure the latest milestone in the Trafigura contract has brought some upbeat sentiment to the stock.Energy Penny Stocks to Watch: Orbital Energy Group Inc.
Orbital Energy Group Inc. is a conglomerate that works by acquiring businesses that are in line with its main goal. Its business holdings include Orbital Gas Systems Inc., Orbital Power Systems Inc., Orbital Solar Services, and others. As you can see, Orbital Energy Group has holdings that are quite diverse across many energy segments. Because of this, some investors believe that Orbital Energy could continue to see growth in the long term.
Back in November, Orbital Energy reported its Q3 financial results for 2020. In the results, the company posted a 124% increase in its revenue over Q3 2019. This comes out to a total of around $13.6 million for the quarter. In addition, the company was able to push its gross profit to $2.4 million, which is around $1 million more than Q3 2019. Of course, we have to consider that this growth is substantial considering the effects of covid.
While Orbital did pull in an operating loss of $6.3 million for the quarter, the company was able to accomplish several projects in that time frame. Jim O’ Neil, CEO of the company stated that “in the third quarter, we continued our evolution into a diversified infrastructure services provider. Our recently acquired solar engineering, procurement, and construction services company, Reach Construction Group, is engaged for multiple, utility scale solar programs starting in the fourth quarter.”
With a lot of its potential hopefully yet to be seen, investors can choose whether or not to consider OEG one of the penny stocks to watch right now.