Biotech and Energy Penny Stocks Continue to Lead in Gains
As January comes to a close, we continue to see high momentum among many of the hottest penny stocks today. With the political turmoil in the U.S. seemingly coming to an end and vaccines being distributed, more bullish sentiment has come to light.
There are a few strategies when it comes to finding penny stocks for your watch list. One of these ways is following current market trends. Identifying hot sectors or industry trends can help when you want to find where the momentum is. We saw this exact scenario when countless electric vehicle stocks took off over the last few months. We also saw a surge in things like tech stocks. Right now, we see a lot of bullish trading in both biotech and energy penny stocks.
While these industries are showing high volatility, there are plenty of opportunities that have been capitalized on. With the above factors in mind, it's important to do your research to find the most valuable penny stocks to trade. All things considered, here are four hot penny stocks to watch. While all of them can be purchased for under $4, are they worth the risk?
Hot Penny Stocks to Watch
- Atossa Therapeutics Inc. (NASDAQ: ATOS)
- Jaguar Health Inc. (NASDAQ: JAGX)
- Tellurian Inc. (NASDAQ: TELL)
- U.S. Well Services Inc. (NASDAQ: USWS)
Atossa Therapeutics Inc.
Up 25% on January 25th at midday is the biotech company, Atossa Therapeutics. Atossa is a biopharmaceutical company focused on treating cancer, and now, Covid-19. In the past month, shares of ATOS stock have skyrocketed up by around 27%, which is quite a significant gain. One of the biggest needs of biotech companies right now is capital.
Atossa announced a registered direct offering worth $25.2 million a few weeks ago. The goal was to bring in liquidity to sustain growth and development. While some investors are worried about how quickly Atossa is burning through cash, this should slightly settle those concerns. Obviously, we have to consider the effects of share dilution when any offering is announced.
But, this issue could remain at bay for quite some time. Atossa's main drug of consequence right now is known as AT-301. This is an inhalable drug that can be administered at home for those suffering from Covid-19. Currently, there are no FDA approved options for treating Covid at home beyond over-the-counter medicines. The company is currently in its Phase 1 study, waiting to advance into the second stage of research. Whether or not this drug will be approved remains to be seen.
This week, Atossa President & CEO Dr. Steven C. Quay is set to speak at the Precision Medicine World Conference. Dr. Anthony S. Fauci will be the spotlight speaker of the event.
Jaguar Health Inc.
In the past few weeks, shares of JAGX stock have shot up substantially. Its continuous daily gains suggest that it is on traders' radars right now. As with any volatile security, investors need to know what they're getting into. Since November of 2020, shares of JAGX stock have rocketed up by almost 1,700%. Now, gains like this are quite rare, but they do happen on occasion. Jaguar is currently working on producing a novel, non-opioid medicine for certain conditions that affect the GI system.
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This includes Mytesi, which the FDA approved to treat noninfectious diarrhea in those who have HIV/AIDS. Recently, Jaguar Health announced that it had closed on a $6 million issuance and sale of backed notes. Lisa Conte, CEO of Jaguar Health, stated that "we plan to use funds generated by the agreement to fund clinical development of lechlemer for the planned cholera-related indication. Moving this second-generation anti-secretory agent into clinical development gives the company another shot on goal."
With this solid news coming only a few weeks ago, the hopes are that JAGX stock can continue on its bullish run. This past Friday, Jaguar also received notice from Nasdaq that it had regained compliance with the minimum bid price requirement. Monday also revealed a 13G filing from Oasis Capital, LLC. The firm reported a 9.99% stake in the company. Obviously, institutional interest doesn't hurt things in light of recent developments either.
Another big gainer of the day on Monday was Tellurian Inc. During the trading day, shares of TELL stock shot up by a solid 15% to $3.81 per share. The company works as an energy business, in the natural gas sector. It states that it produces liquified natural gas at its 10,000 net acres of property located in Louisiana.
Currently, the company has as many as 67 wells that are in the production of natural gas. Tellurian Inc. is an example of a company that lost a great deal of value as the pandemic hit. In the span of only a month back in February, TELL stock lost roughly 90% of its value. From April of 2020 to November of 2020, TELL stock stayed at a relatively low trading level, at around the $1 mark.
From November until now, shares of TELL stock have risen by a solid 320% to roughly $3.82. Given that its pre-pandemic price was relatively stable, between $7-10, could there still be some upside left with TELL stock? Now, we also have to consider that President Biden is calling for more renewable energy use. While this is not a great factor for Tellurian, in the meantime, natural gas is still in high demand, especially with new infrastructure projects in progress.
Late last week, analysts at Wolfe Research upgraded Tellurian to Outperform from Peer Perform. The company also issued a price target of $5. Based on the current TELL stock price, Wolfe's forecast is nearly 30% higher right now.
U.S. Well Services Inc.
Another energy company on the radar right now is U.S. Well Services Inc. The company provides hydraulic fracturing services. In the past few years, U.S. Well Services has earned the title of being one of the leaders of electric fracture stimulation. It holds claim to its patented electric fracking technology. This is a product that utilizes natural gas to mobile stimulate various wells in the energy production sector. Because it is electric, this service has a highly decreased environmental impact, and it has high operating efficiency.
This means that owners can save money while producing more natural gas than with traditional methods. This product can also reduce the massive noise pollution that the traditional methods hold on a side note. With a 15% gain on January 25th, USWS stock is on many investors' radars.
Before trading commenced on Monday, USWS announced that it had received a letter from the Nasdaq Market. This letter states that USWS has regained compliance with the MVLS Requirement. This requirement states that it now complies with the over $1 listing rule for being on the NASDAQ exchange. After receiving the initial letter of non-compliance back in August of 2020, USWS has since worked to build its value and share price accordingly.
In the past month, shares of U.S. Well Services shot up by around 126%. It also appears as though investors are hoping for a post-Covid energy sector recovery. With this considered, is USWS a penny stock to watch?
Final Thoughts On Penny Stocks
We see a lot of daily activity in cheap stocks like these. As traders, it's important to identify your trades based on the time frame in many cases. Is this likely a day trade or a swing trade? Will this be a volatile move, or will there be more consistent follow through? These are all different questions to have answers to before entering a trade.
Case in point, if you are planning on swing trading a stock known for quick moves up or down, it may not be the best fit. Similarly, if you're looking to day trade a stock that tends to move only a few percentage points per day, that also may not be the best fit. So it's important to analyze not only industry and market trends but also the overall trend in the stock you're looking to buy.
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