Are You Watching These Former Penny Stocks Right Now?
Penny stocks are well-known for their high level of risk and reward. While it’s relatively normal to see stocks under $5 jump sporadically, it’s less frequent to see cheap stocks go on to “graduate” from this level and become larger companies. But for the ones that do, it’s an exciting time for the market and the organizations themselves.
In many cases, when you’re talking about penny stocks in the first place, you are generally looking at companies in the early stages. On the other hand, you may also be looking at companies that are falling on hard times.
Last year we saw this as the case, with countless stocks falling hard during the early days of the pandemic. Many of the former leading businesses in industries like travel and leisure fell victim to this pressure. Needless to say, many have experienced a strong rebound over the last year.
This was more of a market-based move than anything. A unique event hurt these companies. Had the pandemic not been a factor, the chances that any of those well-known names like Hertz (OTC: HTZGQ) or Party City (NYSE: PRTY) actually becoming a penny stock were slim to none.
Penny Stocks Can Hit It Big
But then you have true penny stocks. These are the ones with underlying companies building a business from the ground up. They weren’t market leaders that fell on hard times. I’m talking about the start-up stage companies building a pipeline or product portfolio from 0. This is where the success stories begin.
Take, for instance, Novavax (NASDAQ: NVAX). The company had already been flirting with penny stock levels much earlier than 2020. But it was developing a treatment pipeline that just so happened to show potential in addressing things like coronavirus. You can read more penny stocks success stories on PennyStocks.com.
Whatever the case may be, the fact is that penny stocks aren’t just lottery tickets. There are plenty of companies that go on to become formidable competitors within their specific industries. In this article, we’ll look at a few recent “graduates” which have approached new May highs.
- GT Biopharma Inc. (NASDAQ: GTBP)
- Regional Health Properties (NYSE: RHE)
- Image Sensing Systems Inc. (NASDAQ: ISNS)
- Ocugen Inc. (NASDAQ: OCGN)
Top Penny Stocks To Watch: GT Biopharma Inc. (NASDAQ: GTBP)
Shares of GT Biopharma have surged over the last year. Not only has it gone from OTC penny stock to Nasdaq-listed. It firmly established itself outside of sub-$5 levels during late Q1 2021. What’s more, GTBP stock reached fresh 52-week highs this week after climbing to $14.33.
Analysts have remained bullish on this former penny stock. Roth Capital and B. Riley each have Buy ratings on the company with targets ranging from $21 to $25. GT Biopharma’s pipeline and treatment technology platform has become a clear focus for the market. The company’s TriKE platform focuses on using natural killer cells to enhance the cancer-killing abilities of patients’ immune systems.
The company has developed several treatment candidates based on TriKE. Its lead treatment candidate, GTB-3550, has been initially studied for its potential to treat high-risk myelodysplastic syndromes and refractory/relapsed acute myeloid leukemia. Early results from the first 9 patients in a Phase I/II Expansion trial have shown a significant reduction in bone marrow blast levels and showed no signs of cytokine release syndrome.
GT Biopharma also announced preclinical results from another TriKE candidate, ROR1, for treating prostate cancer. In March, the company released data showing that ROR1 TriKE effectively promoted NK cell killing of prostate cells. While no new updates concerning this treatment candidate have come about recently, it does suggest that TriKE treatment could have the potential for multiple cancer indications. This is something that analysts have focused on this year.
Roth Capital analyst Tony Butler explained in a note that “natural killer cell engagers may improve the outcomes in patients with acute myeloid leukemia and perhaps other malignancies.”
2. Regional Health Properties (NYSE: RHE)
Regional Health is another one of the former penny stocks we’ve discussed plenty of times in the past. In fact, the last time we discussed the company, it was experiencing massive levels of volatility and big moves that took shares as high as $15.77. Shortly after the dust had settled, RHE stock graduated from being a penny stock.
The last few days have been reminiscent of the action in late December. The former penny stock popped to highs of $15 on May 3rd. The move came seemingly out of nowhere. The company itself also came out with a press release stating that “No Material Change” has come to its business to justify this move. Regardless, the reopening trade could be something to point at when it comes to Regional Health.
The company had a wild month of April after reporting its latest round of earnings. Regional reported that reinstating things like family visitation privileges could help give the company a boost during the second half of 2021. As vaccine distribution continues and more in-person activities are allowed, companies like Regional could be a focus. The company owns, leases, and manages senior living and long-term care facilities. With lockdowns and social distancing restrictions starting to lift, Regional Health and other care facility companies could benefit from increased foot traffic.
3. Image Sensing Systems Inc. (NASDAQ: ISNS)
Image Sensing hasn’t been the most active name on this list of penny stocks. Until this week, ISNS stock didn’t trade more than a few hundred thousand shares per day. However, the last few sessions have seen ISNS trade as much as 44.9 million shares in a single day.
What was the catalyst? The company announced strategic changes to its business. These included a quarterly cash dividend, a stock buyback program, and the formation of a new holding company, Autoscope Technologies, to become the parent of Image. This reorganization is expected to be completed by the end of this quarter.
“Over the last five years, Image Sensing Systems has prudently rebuilt its balance sheet while significantly improving its bottom-line profitability and cash flow. By reorganizing and building on the success of the Autoscope brand, we will work on growing the business with a focus on organic opportunities while also examining acquisitions and partnerships that can leverage the reputation, assets, and talents within the Company,” said Andrew Berger, Chief Executive Officer of Autoscope Technologies.
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With this as the backdrop to the month ahead, trading have rallied behind ISNS. Since the beginning of the year along, this former penny stock has now managed to climb as much as 82%.
4. Ocugen Inc. (NASDAQ: OCGN)
Ocugen has become one of the top penny stocks to watch this year. On the first day of trading in 2021, OCGN stock opened at $3.42. This was a continuation of a rally that the penny stock had experienced during late December. If you’ve been an active reader, you’ll likely remember this time in Ocugen’s history as it was a pivotal moment for the company itself.
While we had been following the company’s progress for months, on December 22nd, OCGN began its bigger push. Ocugen announced that it signed a binding letter of intent with Bharat Biotech. The two would co-developing Bharat COVID-19 vaccine candidate COVAXIN for the US market. Furthermore, COVAXIN received Emergency Use Authorization in India in January. Given the state of the global pandemic, especially in places like India, OCGN stock has gotten a big boost recently.
This week, shares reached highs of over $15, up over 300% year-to-date so far. This week, Ocugen announced studies that showed COVAXIN was potentially effective against 3 variants of SARS-CoV-2. That helped spark a continuation in the recent bull rally in the former penny stock.
Are All Penny Stocks Set Up For Big Moves?
Penny stocks are risky. This is something that most traders are well aware of. But this doesn’t mean that taking on risk will equate to scoring big rewards. Research is important, especially when it comes to looking for cheap stocks to buy. With the correct trading style and after finding strong companies to watch, there may be potential for action in the market. It’s up to you to ultimately decide if penny stocks are right for you.
Whether it’s market momentum, sector sentiment, or something else, make sure you know what and why you’re buying. It’s easy to read things about penny stocks on Reddit and other social media. But hype alone shouldn’t be the only factor in your decision-making process.
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