Are These Penny Stocks on Your May Watchlist?
As the economy reopens, penny stocks that can benefit are constantly in focus. These companies are known as reopening penny stocks. This explains the recent growth we have seen in the trailing months with certain stocks under $5. Right now, investors should consider which penny stocks to buy as they relate to reopening sectors. As vaccination rates rise and in-person restrictions are lifted, retail traffic will once again increase.
The massive growth seen with tech stocks and e-commerce sectors during COVID was not surprising. However, this caused many penny stocks to suffer last year. Specifically, this includes those reliant on in-person retail traffic. We are now in a period of high volatility, which many investors consider to be a good sign.
Consolidation occurs when the number of buyers equals the number of sellers. Analysts interpret this as an indication that the price per share is in a fair position. Not too high and not too low. With reopening penny stocks, many believe that this is only the beginning.
Just like anything else, it’s important to remember that penny stocks are used by investors as a financial tool usually to see quick gains. But, it’s important to consider that diversification is still crucial. What draws many investors to penny stocks is the massive volatility they offer. With this considered, here are four penny stocks that could be worth adding to your reopening penny stock watchlist.
4 Reopening Penny Stocks For Your May Watchlist
- Castor Maritime Inc. (NASDAQ: CTRM)
- Farmmi Inc. (NASDAQ: FAMI)
- Cinedigm Corp. (NASDAQ: CIDM)
- Zomedica Corp. (NYSE: ZOM)
Castor Maritime Inc. (NASDAQ: CTRM)
We have covered Castor Maritime several times in the past few months. As a shipping transportation company, CTRM offers its services through the ownership of dry bulk vessels. CTRM offers clients sea transportation and shipping for major and minor bulk cargo. This includes coal, grain, ore, steel, fertilizers, cement, sugar, bauxite, and scrap metal.
As businesses reopen so do various industries and their corresponding shipping needs. With unemployment rates hitting record highs this year people will slowly be returning to work in the coming months due to lessened restrictions. This will allow large manufacturing companies to start production once more.
Coupled with the increased demand for goods, factories will need raw materials from wholesale producers to build the products we all know and love. All of this points to a need for international seaborne shipping companies to do the heavy lifting to restart production.
Castor Maritime, founded only a few years ago by Petros Panagiotidis in Limassol, Cyprus, operates many global shipping routes, crucial to international trade. With a fleet of 24 vessels, and acquiring more every month, CTRM is in a favorable position. Despite shares of CTRM being quite up and down since early April, do you think it is a reopening penny stock to watch?
Farmmi Inc. (NASDAQ: FAMI)
Along with manufacturing, another sector that is on the rise again is agriculture. Due to restrictions placed on farms, grocery stores, and international food imports, the industry as a whole has suffered. Farmmi however, has been a major component of the global market for mushrooms. This means that it has felt the effects of the pandemic, just like any other food supplier.
Falling over 80% in the past couple of months, FAMI stock has been consolidating since late April. Engaged in agricultural product production and distribution, FAMI’s focus is on processing and marketing a variety of edible fungi, specifically the Shiitake and Mu Er mushrooms.
Based in Lishui, China, FAMI is predicted to benefit from lifted international restrictions. It supplies mushroom products indirectly through Chinese distributors to both foreign and domestic customers. FAMI’s international business includes a client list of supermarkets in the USA, Canada, Japan, Europe, and the Middle East.
With a promising outlook in the coming quarter due to the reopening of international markets, FAMI could be worth watching if markets continue to perform in the next few months.
Cinedigm Corp. (NASDAQ: CIDM)
Businesses reliant on in-person entertainment are another sector affected by the COVID-19 pandemic. Unable to socially distance in group settings, people have found themselves having to seek amusement in their own homes. This has no doubt led to a lot of restlessness and a desire to go out.
Additionally, it’s worth noting that there are many published studies on the effects of staying home on mental health. But, one of the main ways that people have avoided this is through digital entertainment.
Cinedigm Corp. is a reopening penny stock that directly engages in the marketing and distribution of movies and television. It is comprised of two different businesses including its Cinema Equipment Business (CEB), and its Content and Entertainment Business (CEG). The CEB consists of non-recourse, financing channels, and administrative work. The CEG business is its direct relation to the entertainment and content market.
Founded back in early 2000, Cinedigm has seen many volatile periods of growth and consolidation. Over the past year, however, it has been in a mostly bullish trend, increasing by over 130%.
As an entertainment stock, Cinedigm can benefit from both stay-at-home orders and economic reopening. While it has seen some tough times in the past year and a half, many believe that it could see a push as Covid cases continue to drop. Whether or not it’s worth watching, however, is up to you.
Zomedica Corp. (NYSEAMERICAN: ZOM)
A penny stock we have covered more than many others is Zomedica Corp. While shares of ZOM stock have shifted greatly since mid-April, ZOM has almost $62 million in cash according to its latest balance sheet. This is indicative that Zomedica is in a very solid financial position right now. Additionally, this capital should provide it with strong funding for the next three years of operations.
ZOM is another company that is dependent on a reopening market. With pet owners avoiding the vet whenever possible due to COVID-19 we have not been able to see Zomedica’s diagnostics platform, Truforma, reach its full market demand. With a plan to begin commercial sales this Spring, ZOM notified shareholders of its roadmap.
On March 16th, the first retail sale of Truforma was recorded, indicating a big milestone for the company. Unlike many businesses, new technology in veterinary medicine is not easily adopted. It’s a slow transition for doctors to alter their form of patient care.
However, if embraced, ZOM’s new diagnostics platform could become the standard. Additionally, during the pandemic, a large portion of the public has adopted domestic animals. This means that Zomedica’s potential market size could increase moving forward. Whether it can commercialize Truforma enough to turn a large profit, however, remains to be seen. With this in mind, will you be adding ZOM to your watchlist?
Which Reopening Penny Stocks Will You Be Watching?
As the market continues to be highly volatile while the pandemic runs its course, there are plenty of penny stocks benefitting from economic reopening. Additionally, when stocks are down, it could present a buying opportunity for some to take advantage of.
Doing the proper research can help investors to find the best reopening penny stocks along with any others that pique their interest. So, as the economy recovers from Covid, the opportunity to find penny stocks with potential value is everywhere. With the right research and tools at your disposal, making a competitive watchlist can be easier than imagined.
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