These Former Penny Stocks Are Turning Heads In The Stock Market This Year
When it comes to trading penny stocks, you come across plenty of success stories. These typically involve big moves within short periods of time and huge windfalls for traders. They also usually entail a quick drop lower thereafter. In many cases, the penny stock never returns to its historical levels. However, there are plenty of other stories about these cheap stocks that are more of a Cinderella story, so to speak. This is where we see stocks under $5 become industry competitors, with share prices continuing to rise for months.
Now, I'm not talking about the latest trend in meme stocks or Reddit penny stocks. The GameStops (NYSE: GME), AMC Entertainments (NYSE: AMC), and BlackBerries (NYSE: BB) are something different. These generally include heavily shorted or speculative bets driven by momentum stemming from social sentiment. If you've followed PennyStocks.com for a few months, you've hopefully familiar with this new trend. Essentially, we saw the first big wave of socially boosted momentum early this year when Reddit communities got behind certain short squeeze stocks, namely GME stock.
Needless to say, this has bloomed into something not seen at this scale in recent market history. In these cases, fundamentals aren't part of the overall equation. Today's article will discuss a handful of former penny stocks that have seen fundamental catalysts. These have helped justify the latest developments for these companies this month. In particular, all penny stocks on this list were selected for inclusion into the Russell 2000 Index.
Russell 2000 Penny Stocks
Not all penny stocks make it onto the Russell. Furthermore, not all stocks in the Index are stocks under $5, clearly. According to The Index website, "The Russell 2000(R) Index measures the performance of the small-cap segment of the US equity universe. The Russell 2000(R) Index is a subset of the Russell 3000(R) Index, representing approximately 10% of the total market capitalization of that index. It includes approximately 2,000 of the smallest securities based on a combination of their market cap and current index membership. The Russell 2000(R) is constructed to provide a comprehensive and unbiased small-cap barometer and is completely reconstituted annually to ensure larger stocks do not distort the performance and characteristics of the true small-cap opportunity set."
For this reason, you won't likely find OTC stocks on the Russell list. With this in mind, we'll focus on what retail traders have dubbed "Robinhood Penny Stocks." These include companies listed on the NASDAQ and NYSE. It also refers to the fact that with only a few acceptions, the Robinhood app also restricts access to OTC-listed names.
According to the FTSE site, some of the current companies in the Russell 2000 include Plug Power (NASDAQ: PLUG), AMC Entertainment, and even Penn National Gaming (NASDAQ: PENN). Furthermore, companies like Velodyne Lidar Inc. (NASDAQ: VLDR) have also been selected for inclusion in the Russell 2000. Today we'll take a look at these 3 former penny stocks which announced inclusion in the Russell starting this month:
Former Penny Stocks To Watch 1: GT Biopharma Inc. (NASDAQ: GTBP)
This morning GT Biopharma announced that it is set to be added to the Russell 2000(R) Index. This comes at the conclusion of the Russell US Indexes annual reconstitution, effective at the opening of the U.S. equity markets on June 28, 2021.
In response to the development, CEO Anthony J. Cataldo said, "We welcome the enhanced visibility of our long-term growth potential and look forward to sharing our future milestones with a broader investment community."
GT Biopharma has been on the rise for the better part of the last few months. This is thanks, in part, to reaching key milestones with its current treatment pipeline & clinical trials. In particular, the company has developed a treatment technology, "TriKE," to use in developing immunotherapies. GT's treatment, GTB-3550, is currently in a Phase 1/2 study in patients with acute myeloid leukemia and myelodysplastic syndrome.
Early data has already shown meaningful progress. Recent results from the first 9 patients in the study showed GTB-3550's ability to reduce up to 63.7%bone marrow blast levels and showed no signs of adverse side effects. This is a big aspect of early-stage clinical trials as negative side-effects can be a large hurdle to overcome.
"Both from efficacy and safety perspectives, our GTB-3350 TriKE(TM) program appears to be delivering the TriKE's unique therapeutic potential which has been well-tolerated in all of our patients."CEO Anthony Cataldo
2. Greenwich LifeSciences (NASDAQ: GLSI)
If you've followed penny stocks for the last year, you likely remember the epic rise of GLSI stock. It was quietly trading below $5 for most of the year. Early December, however, saw shares explode to highs of $158.07; yes, you read that correctly. It was the biggest story across most social media platforms even before the meme stocks trend materialized. The big catalyst behind the move stemmed from a key update from Greenwich.
The company released a poster presentation of a 5-year data readout for its GP2 clinical trial. Greenwich reported that the trial met all of its endpoints and showed zero recurrences of breast cancer in patients who had previously undergone surgery. This move came only a few months after Greenwich actually went public.
Fast-forward to this year, and shares continue trading higher. Though GLSI stock isn't above $100 anymore, it still maintains a price above 30. This week the company announced that it would join the Russell 2000 Index effective June 28th.
This month the company published additional positivity safety data from its GP2 Phase 2b trial. In response to the data, Snehal Patel, CEO of Greenwich, said, "This final combined data set encourages us to utilize the same treatment strategy in the planned Phase III trial to conservatively reproduce these promising results that showed that GP2 immunotherapy may prevent metastatic breast cancer recurrence."
3. Arcimoto Inc. (NASDAQ: FUV)
Shares of Arcimoto exploded over the last year. FUV shares surged from under $1 last year to highs of $36.80 this year in the midst of the EV stock trend. While things have really cooled off for EV stocks, in general, Arcimoto has seen a bit of a rally recently. Some of this momentum gets credit from progress in the mass production of functional and recreational vehicles. It also recently updated its new rental car center earlier this month. This is the fourth Arcimoto rental location. The company now offers rentals in San Diego, Key West, San Francisco, and its latest one in Oregon.
Though it is still in lower production, updates earlier this year have revealed bigger plans for 2021. In particular, management alluded to potential milestones ahead in its Q1 update:
"Looking forward into Q2, we plan to open multiple rental locations, which will both introduce our uniquely thrilling three-wheel vehicles to new potential customers, and give them a destination driving experience infinitely more joyful than any economy subcompact you can rent. In addition to the Fun Utility Vehicle, our Deliverator is now in low-volume pilot production."
Given the underlying excitement surrounding EV stocks, FUV could be one to watch. It will also join the Russell 2000 Index later this month.
Are These On Your List Of [former] Penny Stocks to Watch Right Now?
Joining an Index can bring more attention to companies; this is a given. The biggest focus for most, however, is how or if progress continues. This list of penny stocks included a few names on it, and the companies discussed have all reached different milestones throughout the last year. Heading into the second half of 2021, it will be interesting to see how the market responds following the addition of these names later this month. Given the trend up until now, I'll leave it up to you to decide if they'll find a place on your watch list in June.
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