Penny Stocks Continue to Benefit From Economic Reopening
Forming a penny stock watchlist is not as complicated as one might think. At the end of the day, it comes down to staying up to date with news and making educated decisions. Looking towards the future is also another strategy many successful investors use when looking at penny stocks. To choose the right companies for your penny stock watchlist, there are a few things to consider.
The first and foremost is speculation. Speculation is at the root of a company’s daily price movements and is a key factor in its volatility. People want to feel confident in a company’s future before they invest their hard-earned money. The question to ask is, how will a penny stock perform in either the short or long term? Of course, depending on your capacity for risk, this timeline may change.
Additionally, many investors find penny stocks on Robinhood or Reddit, or other social media outlets. These are great places to get inspiration. But they shouldn’t be used unless in tandem with another research method.
The second thing to consider is where the company is at now. In your research, is it overvalued? Is it undervalued? This can partially be answered by reviewing the recent financials of the business as well as analyst recommendations. Investors often look into balance sheets, debt amounts, previous earnings reports to find this data.
Right now, we are witnessing penny stocks benefit from a reopening economy. Many are looking towards cheap stocks that could benefit from these lessened restrictions. In a time such as this, it has never been more important to remain practical. Rash decisions can lead to FOMO (fear of missing out) investing, which rarely works out.
Following your own investing strategy is the best way to remain confident in your short and long-term investments in penny stocks. The abundance of choices offered on trading platforms can be intimidating as well.
This however gives you, the investor, an opportunity to perform proper due diligence and choose the right reopening penny stocks for your watchlist. Given all this, here are three reopening penny stocks that you may want to keep an eye on.
3 Reopening Penny Stocks to Watch Right Now
Drive Shack Inc (NYSE: DS)
Drive Shack is a provider of in-person golf entertainment. This makes it also up for consideration as an entertainment penny stock. With golf venues in Virginia, North Carolina, and Florida, DS is set up well to take advantage of the reopening economy. With rising vaccination rates, more and more people are feeling comfortable leaving their homes to seek group activities.
DS manages golf-oriented leisure, offering social entertainment at its venues and courses. News this past year of its plan to grow post-COVID has allowed its stock price to move in an upward trajectory. Opening near $1.12 this time last year, shares of DS stock have increased by over 115%.
Much of the reason for DS seeing bearish movements recently, however, is due to the debt it has incurred. Many see debt on the balance sheet and are concerned about its potential to pay it back.
However to really get an understanding of a company we need to see where the debt is coming from and where it’s going. If a business is losing money while fully operational investors lose faith in a company’s profitability and future success.
In the case of DS, new facilities are being built and the world is still in recovery from the pandemic. Debt, in this case, has only increased in preparation for the opening market which can be interpreted as an intelligent move due to low-interest rates. In either case, what do you think? Should Drive Shack be on your list of reopening penny stocks to watch?
Cinedigm Corp. (NASDAQ: CIDM)
With the high volume of money being moved around in the stock market, investors are looking towards the entertainment industry as a potential source of growth. Because of the slowed production of movies and television, people have been deprived of new content.
This might explain why there has been an over 125% increase in Cinedigm share value over the past year. As a company engaging in the market and distribution of movies, television, and other forms of content, CIDM could thrive in an opening market.
Due to the speculative nature of investing, many see the television industry as a reopening market. It’s also worth considering that entertainment can thrive in both good and bad economic times. With in-person restrictions, theaters are closed, filming is on pause, and funding for new projects has ceased. As a business reliant on active production, CIDM has recently provided a new streaming service called Local Now.
“Cinedigm is passionate about Movies and TV, and we want to share that passion with streaming enthusiasts all over the world. We are thrilled to make Cinedigm’s suite of networks available on Local Now. With a strong line-up of channels, fans will be able to enjoy their favorite genres while discovering new films and series.”
Senior Vice President of Revenue at Cinedigm
Hearing this, what do you think of CIDM’s prospective future? As a penny stock under $5, CIDM has a lot of room to grow remains an integral part of the entertainment industry. Whether it deserves a spot on your watchlist, however, is up to you.
Muscle Maker Inc. (NASDAQ: GRIL)
An interesting penny stock to consider is Muscle Maker Inc. As a restaurant chain operator, this modern dining experience offers protein-based meals for patrons looking for a healthy meal. Founded in Texas by Rodney C. Silva in 1995, GRIL has seen a 30% loss this past year.
One thing to consider is that GRIL has taken a major hit from Covid. But, the company has continued to innovate by offering curbside pick up, delivery, and more. And, as vaccine rates hit all-time highs, we could see a resurgence in attendance at restaurants owned by Muscle Maker Inc.
Trading at under $2, this company will undoubtedly benefit from lessened restrictions regarding COVID. With more and more people returning to in-person dining as well as the current health craze that has been seen, GRIL is in a strong position.
Of course, there is always a lot more risk when it comes to a business that has not been performing well, however, it’s important to consider the future potential in a company as well. So, whether or not Muscle Maker Inc. has forward momentum remains to be seen. But, with its eyes set on the future, that choice is up to you.
Are Reopening Penny Stocks Worth It?
As we move into an opening economy, our foresight for what is to come has never been more important. The high volatility in the market, especially with certain penny stocks to buy, can be in use for your advantage.
Creating a list of penny stocks is an investing strategy that can be used any time prior to pressing the send button. It prepares us for what is to come and grants us the opportunity to be aware of patterns in the marketplace. With all this, what do you think is a good move when it comes to making a penny stock watchlist. What will be valuable in the coming months?