Are These Meme Penny Stocks On Your Under $5 List?
We’ve all heard the terms, Reddit penny stocks, meme stocks, and any other popular trends that have come up this year. And if you’re new to penny stocks, these are some of the biggest trends in the market right now.
For those unfamiliar, let’s talk about these briefly. Reddit penny stocks are a trend that has come up ever since GameStop (NYSE: GME) shot up in the triple-digit percentage points after almost declaring bankruptcy earlier this year. This was a coordinated effort by traders on the social media site Reddit and specifically in the subreddit, R/wallstreetbets.
For the first time, a community came together to invest in a company, not because of its fundamentals, but because they couldn’t stand to see a piece of their childhood be shorted to non-existence. So, these traders decided to all buy-in and beat out a massive short position held by a large hedge fund.
[Read More] 3 Reddit Penny Stocks Making Big Moves Right Now
While this was a big deal when it happened, it has had an even larger effect months later. We witnessed a complete paradigm shift, illustrating just how influential retail traders can be.
The term ‘meme stocks’ also coincides with this, but there are other aspects to understand. Meme stocks on its own implies a company that has come to light as a trending or viral topic. A meme is an image or video depicting a usually comedically approached topic. If you go on the internet, you’ve probably seen photos of cats with words beneath it. This is a meme.
So, adding the layer of penny stocks to that has brought many trending companies further into the spotlight. This includes the likes of Tesla Inc. (NASDAQ: TSLA) or AMC Entertainment Holdings Inc. (NYSE: AMC). The rise of meme stocks is a direct result of the influence of investors on Reddit or other social media websites.
These stocks can quickly increase (or drop) in value in a very short period. While the volatility of these penny stocks to watch can dissuade some, others see large potential in them. Considering all of this, let’s take a look at four Reddit penny stocks for your May watchlist.
4 Meme Penny Stocks to Watch
- Auris Medical Holding Ltd. (NASDAQ: EARS)
- Peabody Energy Corp. (NYSE: BTU)
- Checkpoint Therapeutics Inc. (NASDAQ: CKPT)
- Ebang International Holdings Inc. (NASDAQ: EBON)
Auris Medical Holding Ltd. (NASDAQ: EARS)
The final company on this list, Auris Medical Holding Ltd., is a biotech penny stock. This biotech company creates therapeutics for unmet medical needs in multiple fields. These fields include neurotology, rhinology, and allergy. Right now it has Phase 3 programs for Keyzilen (AM-101) to treat inner ear tinnitus, and Sonsuvi (AM-111) to treat inner ear hearing loss. It has multiple other trials taking place at the moment as well.
On May 7th, Auris provided an update on its Bentrio nasal spray used to treat allergic rhinitis. Bentrio is reported to have met the primary efficacy endpoint in its clinical evaluation. It reduces significant nasal symptoms in a fast and effective way. Now the company has a pre-submission meeting with the U.S. Food and Drug Administration (FDA). If Bentrio is approved by the FDA, it could be very big for Auris.
After this update was released, EARS stock increased by more than 15% on May 7th to $3.30 a share on average. At one point in early trading, EARS stock touched $4.34 a share.
With numbers like this, could Auris escape the penny stock category altogether upon an FDA approval? Time will tell what happens to EARS stock, but what we do know is this company has extremely high volume at the moment. With this in mind, will this company make your penny stock watch list?
Peabody Energy Corp. (NYSE: BTU)
While Peabody Energy climbed out of penny stock territory only a day ago, it’s still worth mentioning for its sizable rises in value. To understand why BTU stock has climbed so heavily in the past few months, let’s take a closer look at what the company does.
Peabody is a leading energy stock and coal producer working to provide products used in the production of electricity in both emerging and developed countries. Its products provide the energy to produce everything from steel and other infrastructure-related products.
Additionally, the company states that it is heavily committed to sustainability in all of its operations. Only a week or so ago, BTU announced its Q1 2021 financial results for the period ended on March 31st. In the results, revenue hit a solid $651.3 million with a net income of $77.6 million. While it did take in an EPS loss of $0.79, this makes sense given the large effects of the pandemic on the energy industry.
“While economies across the globe are in varying stages of recovery from the ongoing pandemic, I’m pleased to note that operational and productivity improvements continue to take hold across the company. In addition, we successfully completed our refinancing activities and subsequently repaid a portion of our long-term debt.
Looking ahead, we remain focused on further improving our seaborne metallurgical cost structure and capturing continued cash improvements across the organization while positioning for ongoing seaborne market improvements.”
CEO of Peabody Energy Corp., Glenn Kellow
So as the pandemic winds down in severity, will BTU be on your list of penny stocks to watch?
Checkpoint Therapeutics Inc. (NASDAQ: CKPT)
Checkpoint Therapeutics Inc. is a penny stock that we’ve covered numerous times in the past few months. As a biotech stock, CKPT has seen a lot of bullish momentum as a result of the pandemic. Similar to BTU, Checkpoint recently announced its first-quarter 2021 financial results as well as some corporate highlights. For some context, CKPT is a clinical-stage immunotherapy and oncology-focused company working on several novel therapeutics.
This includes its lead candidate, cosibelimab, which is an anti-PD-L1 anybody licensed from the Dana Farber Cancer Institute. This compound is in a Phase 1 clinical trial for its potential in treating certain metastatic cancers. Additionally, Checkpoint is studying its CK-101 molecule for its potential in treating non-small cell lung cancer. It’s worth noting that Checkpoint was founded a while ago by Fortress Biotech (NASDAQ: FBIO), which adds another interesting layer to the company.
In its Q1 results, CEO James Oliviero, stated that “we continued to advance the development of our two lead drug candidates while also enhancing our cash position. Enrollment in our registration-enabling study for cosibelimab in metastatic cutaneous squamous cell carcinoma is nearly complete and the stay remains on track to report top-line results by year-end.”
Financially, the company ended the quarter with more than $23 million in net proceeds from its at-the-market stock issuance. This brought its total cash position to roughly $60 million. With a net loss of $6.5 million, it looks like CKPT is in an advantageous position as far as its free cash is concerned. Whether it deserves a place on your list of penny stocks, however, is up to you.
Ebang International Holdings Inc. (NASDAQ: EBON)
Ebang International Holdings seems to be more of a meme stock than many others. This is due to its pure-play relationship with the cryptocurrency market. Interestingly enough, Ebang reportedly mines both Bitcoin and DogeCoin among others and operates completely vertically. It has a large range of mining operations underway that include the two cryptos mentioned above as well as Litecoin.
Because of this, its price tends to rise and fall with the price of these popular cryptocurrencies. Considering that it is one of the only publicly traded companies with direct ties to DogeCoin, many Reddit penny stock investors have found solace with EBON stock.
However, it’s also worth mentioning that because of its ties to this, EBON stock tends to be highly volatile. While it is directly considered a blockchain penny stock, its underlying business is in the mining of cryptocurrency, which is somewhat separate.
Additionally, Ebang works in the production of application-specific integrated circuits (ASICs), which help in the mining of Bitcoin and other cryptocurrencies. While these coins have shown large price swings in the past few weeks, many believe in the long-term future and potential of cryptocurrency as a whole. So while EBON is fluctuating on a large level, it could be worth keeping an eye on for these reasons.
Are Meme Penny Stocks The Right Choice?
The short answer is that it truly depends on your investing style. While meme stocks or penny stocks, in general, are not for everyone, with the right tools, anyone can have a chance at making profits in the market.
But, it’s always important to consider your risk tolerance as well as what your investing goals are. This is the best and only way to align your portfolio with the right penny stocks to buy. Now, with meme stocks and Reddit penny stocks, volatility is often much higher than others. This is constant, and something that is also desirable for investors. Considering all of this, are meme penny stocks the right choice for you?
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