The markets are ablaze with upbeat sentiment, and penny stocks have played a big role in that. In this article, I will go over the definition of penny stocks and discuss 5 cheap stocks to watch during February’s final days. One thing to remember is that you can have a “bulletproof” plan going into the opening bell, but thanks to speculation and volatility, a trend can change at a moment’s notice. For this reason, it’s good to have a thorough list of penny stocks put together, so you’ve got options when it comes to capitalizing on the latest market trends.Definition Of Penny Stocks
What are penny stocks? According to the Securities & Exchange Commission, penny stocks are shares of a company that trade for less than $5. Some traders make up their own definition, but we’re going to stick with the SEC standard definition of penny stocks for this article.Penny Stocks To Watch This Week
Since this is the final week of February, it could be an important one for certain stocks. The next round of earnings could boost (or depress) certain sectors. Meanwhile, economic data, stimulus measures, and you can’t forget what’s going on in Senate. Federal Reserve Chairman Jerome Powell speaks Tuesday and Wednesday before the Senate Finance Committee and House Financial Services Committee.
Powell delivers his semi-annual testimony on the economy this week. This could paint a picture of what to expect in the next few quarters. While broader market news doesn’t typically impact penny stocks, it could sway certain industry and sector trends. This is where we could see a reaction from small-cap stocks, in general. Heading into the new week, here are a few penny stocks to watch trading for less than that Starbucks Mocha Frap you’ve got there.
- Neptune Wellness (NASDAQ: NEPT)
- Onconova Therapeutics Inc. (NASDAQ: ONTX)
- Jaguar Health Inc. (NASDAQ: JAGX)
- Zomedica Corp. (NYSE: ZOM)
One of the hot sectors of the market right now is cannabis. Marijuana stocks are all the rage among many traders, thanks to the inauguration of President Joe Biden. The Administration has become known for its cannabis-friendly plans for federal legalization. Meanwhile, we’ve got plenty of companies vying for positions in the U.S. thanks to new legislation passed during the 2020 election cycle. Now, this doesn’t mean weed’s going to be legal overnight, but the prospects remain optimistic. Furthermore, attention on the U.S. cannabis market, in general, was seen as a sign for things to come.
Neptune Wellness jumped late in the afternoon on Friday. This was a welcome sight after the last few weeks that the marijuana stock had. Shares dove from highs of $3.60 to lows of $1.65 within a matter of 7 sessions. But Friday saw a turnaround in price. What was the cause of the drop? An earnings miss was to blame for the big drop.
Analysts estimated that Neptune would report a loss per share of $0.02, but the company lost $0.16 per share in reality. Sales also missed the mark on a year-over-year basis at $3.32 million, down from $6.97 million in the same period last year. Following the closing of a $55 million raise on Friday, Neptune now has cash, and the market seems to like that.Onconova Therapeutics Inc.
One of the companies we’ve discussed for a few months now is Onconova. Shares have soared in 2021, moving from around 45 cents to highs of $1.93 last week. What’s been a driving force behind this move? Speculation and excitement surrounding its ON123300 cancer treatment.
Onconova’s treatment is currently in a dose-escalation and expansion Phase 1 trial in China, and a dose-escalation and expansion Phase 1 trial is planned in the U.S. to commence in the first half of this year.
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Another product candidate, oral rigosertib, is currently in a dose-escalation and expansion Phase 1 investigator-initiated study targeting patients with KRAS+ lung adenocarcinoma combined with nivolumab. If nivolumab sounds familiar, that’s because its commercial name is OPDIVO® from Bristol Myers Squibb. Furthermore, anytime you hear “lung” in a biotech company’s arsenal, Covid also likely comes to mind. Needless to say, Onconova has also begun preclinical work investigating rigosertib in COVID-19.
With recent financing under its belt and potential milestone catalysts to look for, ONTX could be one of the top penny stocks to watch.Jaguar Health Inc. (NASDAQ: JAGX)
Speaking of popular penny stocks to watch, Jaguar Health is a frequent name mentioned. Shares of JAGX stock have been consolidating for the better part of the last few weeks but after-hours trading on Friday might suggest a change could be in store. Following the bell, JAGX jumped back above $3.10 before settling out the aftermarket session at $2.94.
The move came after a big update from the company. Jaguar announced its commitment moving forward with an exclusive relationship with the planned Dragon special purpose acquisition company. Dragon SPAC’s intention is for Napo EU, the anticipated subsidiary of Jaguar in Italy, to be the target of the Dragon SPAC.
“Jaguar was previously in discussions with Andreea Porcelli , the founder and CEO of the planned Post Pandemic Recovery SPAC regarding the listing of the PPR SPAC on AIM Italia and the potential merger of the PPR SPAC with Napo EU. However, we were not able to come to terms,” stated Lisa Conte, Jaguar’s founder, president, and CEO.
Jaguar has been exploring the conditional marketing authorization regulatory pathway in Europe to support the development and commercialization of its crofelemer treatment, the company’s drug indicated for prophylaxis and/or symptomatic relief of inflammatory diarrhea. It’s initially going to be studied in a “long-hauler” COVID-19 recovery patient population in Europe. Jaguar already engaged a regulatory agent in Europe and has a meeting organized with European regulatory authorities in March 2021.Zomedica Corp. (NYSE: ZOM)
If you want to talk about the culmination of every facet of “penny stocks,” Zomedica could be that company. Why do I say this? Stereotypically speaking, penny stocks involve hype, speculation, “the pump,” and wild swings. Zomedica has had it all this year. Hype and speculation have centered on the proposed launch of its veterinary diagnostic product, TRUFORMA. The pump came from none other than a celebrity, Carole Baskin. She mentioned Zomedica and TRUFORMA on a Cameo video that got circulated by traders. Then the Reddit army got behind the penny stock, which inadvertently put it on Robinhood’s restricted list earlier this month.
All of this lead to a massive move in shares of ZOM stock in a move of as much as 731% so far. The difference between ZOM and several of the overly hyped penny stocks is, in my opinion, the company already had things going on before the hype. So many times, you’ll see pumped-up stocks plummet shortly after the “big move.” But that wasn’t the case for Zomedica as of late. Even news of a $200 million financing round didn’t hurt the share price all that much.
Zomedica intends to use the proceeds from the offering for the continued development of its diagnostic platforms, including making milestone payments, if any, as they come due, as well as for strategic acquisitions. Armed with cash and a pending commercialization date, will ZOM be on your list of penny stocks to watch right now?