Are These On Your Penny Stocks Watch List?
Penny stocks are some of the most sought-after, high-risk assets in the stock market today. But what are they anyway? According to the Securities & Exchange Commission's definition of penny stocks, we're talking about shares of companies under $5. I know that may not be clear considering the name, but this is the broad designation given. Needless to say, there are plenty of reasons people trade these cheap stocks. In many cases, the thrill of capitalizing on small moves and high-volatility trades is enticing. The amount of money that can be made in such a short period of time is much different when talking about penny stocks vs. blue-chips, for instance.
What's more, in other cases, the opportunity to invest in early-stage companies before they become industry heavyweights is another attraction to these kinds of companies. Whichever the reason you like to buy penny stocks, risk/reward plays a leading role. Don't get me wrong, getting in early and profit from a big percentage move is great, but don't forget about the other side of the equation. What if a trade doesn't go in your favor? What if it goes sideways or, worse, down?
Just as quickly as traders can see gains from these penny stocks, large losses are also possible. For this reason, it's important to have a game plan before going into any investment or trade. Know what your strategy is. Will this be a trade to start, or are you looking to build a long-term position. While it can be hard to invest in penny stocks successfully, it isn't impossible. Understanding how fundamentals, technicals, and sentiment play a role is important.
Tech Penny Stocks To Watch in June 2021
As we've seen with Reddit penny stocks this year, social sentiment can leave a lasting impact. Not only did AMC Entertainment (NYSE: AMC) and GameStop stock (NYSE: GME) surge, the sympathy sentiment carried over into countless other stocks in 2021. Most recently. Clover Health (NASDAQ: CLOV) and Wendy's (NASDAQ: WEN) benefited from the sentiment trade.
On top of all of this, understanding industry trends is also a good way to find new opportunities or avoid bad ones. For example, bitcoin and blockchain penny stocks were popular a few weeks ago. But now traders are avoiding them like the plague until they see some underlying bullish potential. Right now, tech and biotech have helped lead the market. In light of this, we'll take a look at a few penny stocks to watch this month with exposure to the industry. They're also all penny stocks trading under $1 right now.
- Alpha Esports Tech Inc. (CSE: ALPA) (OTC: APETF)
- GEE Group Inc. (NYSE: JOB)
- Solar Integrated Roofing Corp. (OTC: SIRC)
- Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN)
Penny Stocks Under $1 To Watch #1: Alpha Esports Tech Inc. (CSE: ALPA) (OTC: APETF)
Esports technology companies have been on a roll over the last year. Thanks to the pandemic locking people down and keeping them in their homes, entertainment evolved. While some may say the lack of sports hurt an industry, others might argue differently. They're likely referring to the explosion in egaming. In fact, revenues from competitive gaming are set to be just shy of US$1.1 billion by the end of this year, according to market researcher Newzoo.* Names like Shaquille O'Neal, Robert Kraft, Mark Cuban & Tony Robbins are also choosing to track and invest in esports endeavors right now.
With this as the backdrop, companies like Alpha Esports Tech Inc. have started grabbing attention. Unlike the traditional esports entertainment company, Alpha has begun designing a new iteration of esports implementation. Its portfolio is built on the backbone of revolutionary products like its GamerzArena, setting the stage for a new type of competitive experience.
According to the company, It has already partnered & worked with leading names in sports, entertainment, and education. These include The New Jersey Devils, The Vancouver Whitecaps, Barstool Sports, ESPN Radio, Devil Child, Oxygen Esports, and Notre Dame, to name a few.
What To Watch With Alpha Esports
Furthermore, the company has established relationships with well-integrated esports teams to build its brand. This week, Alpha signed an Esports and marketing partnership with Centric Gaming. It's an Esports team with a combined roster of over 150,000 followers on social media. Centric will use and promote Alpha's GamerzArena platform for different activations and contests.
Alpha's data already estimates that 10-20% of GamerzArena freemium users will place head-to-head bets with an average bet size of $2-$10 per math per month. At the company's 10% service fee, that could boil down to revenue of over $5 million just for this one vertical.* There are also revenue verticals that include wagering commissions, partnerships, sponsorships & even DeFi tokenization. The company also announced this month that it has officially gotten a symbol to begin trading in the U.S. - Read More On Alpha Esports Tech
2. GEE Group Inc. (NYSE: JOB)
Shares of GEE Group have been steadily climbing over the last several weeks. Following a big blowout in April, JOB stock has been in recovery mode. The staffing and recruiting technology firm had announced an upsized stock offering at a steep discount to the market at the time. The main use of proceeds was to repay a $55 million debt on its revolving credit facility.
Needless to say, JOB stock has bounced back strongly since April's drop. One of the key drivers of this is likely a focus on the reopening trade. Staffing companies have been in high demand as companies look to restart or grow operations. The pandemic shutdown certainly left its mark. Furthermore, the company's recently filed quarterly results give interesting clues into the outlook for GEE.
What To Watch With GEE Group.
In particular, the company reported significant portions of revenue were driven by professional contract staffing and direct hire placements. The industries serviced were broad but included the likely contenders to benefit from reopening. According to GEE, information technology, engineering, healthcare, finance, accounting, and office specialties were the majors. The revenues from this were approximately $30.7 million, higher than the same period in 2020. It also represented roughly 88% of total revenue for the fiscal 2021 second quarter.
CEO Derek E. Dewan also said, "GEE has significantly improved its financial position and liquidity by eliminating high priced debt after the end of the 2021 fiscal second quarter. We expect that the GAAP financial results for subsequent quarters will show major benefits from the payoff of the former high-cost senior debt. With a bolstered balance sheet, the Company is well-positioned to continue its internal growth strategy and also make strategic acquisitions." - Read More On GEE Group
Penny Stocks to Watch Under $1 #3: Solar Integrated Roofing Corp. (OTC: SIRC)
Renewable energy technology has become a clear point of focus for investors in 2021. Since U.S. President Joe Biden was voted into office, his administration has put a clear initiative to support a zero carbon footprint. With the latest discussions on infrastructure, things like solar energy are coming back into light (no pun intended).
In fact, Abigail Ross Hopper, president, and CEO of the Solar Energy Industries Association, responded to the latest developments in the Biden plan.
"In line with the President's emphasis on high-quality jobs, an upcoming jobs study will show that solar has a unionization rate of 10.3%, which is substantially more than previously estimated and higher than the economy-wide average. These union jobs, along with numerous other career-sustaining jobs in solar, offer another moment to prioritize equity and create opportunities in every community."
What To Watch With Solar Integrated
The company is no stranger to long-time readers. Earlier this year, SIRC stock surged from under $0.30 to highs of $3. This came as early details surfaced about the latest infrastructure bill emerged. While green energy stocks had cooled in the second quarter, the latest discussion on a formal bill has sparked up an interest in sector names. This week, Solar Integrated announced that it closed an acquisition of Future Home Power, a solar, roofing, and battery storage sales company.
David Masse, CEO of Solar Integrated, said, "The additional workforce and lead generation capabilities will allow us to rapidly scale the acquisition to an estimated $1 million-plus per week of sustainable, incremental sales as early as next month - for example, Future Home Power drove $1.4 million in the last week of May alone and is likely to reach $2.0 million in weekly revenue in the near-term." - Read More On Solar Integrated
4. Diffusion Pharmaceuticals Inc. (NASDAQ: DFFN)
Diffusion Pharma joins the list as one of the biotech penny stocks under $1 to watch. The company's shares have been climbing for the better part of the last month. Diffusion develops therapies for oxygen delivery. Earlier this year, its trans sodium crocetinate - TSC - was dosed in the first patients in its Phase 1 trial, evaluating its effect on peripheral tissue oxygenation. This was the first in a series of 3 studies planned in 2021.
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Last month the company reported results from its TSC treatment in hospitalized COVID-19 patients. Topline results based upon analyses of primary endpoint data from the trial were announced in February. These first showed that TSC was safe and well-tolerated.
What To Watch With Diffusion Pharmaceuticals
The company said it hopes to begin and complete the other two trials in the second half of this year. Diffusion expects topline results from each study to become available within two months of their completion dates. The company also said it thinks positive data from any one or more of the three oxygenation Trials could be enough evidence for a definitive effect of TSC on oxygenation.
As more data is anticipated, DFFN stock could be one to watch. In response to the initial data, CEO Robert Cobuzzi, Jr., Ph.D. explained, "For the remainder of 2021, we are focused on the design and execution of the remaining two Oxygenation Trials, which are the foundation of our redefined TSC development strategy announced in November of 2020." - Read More On Diffusion Pharmaceuticals
Are Penny Stocks Worth It?
In this article, we discussed a few penny stocks under $1 right now. While all have several moving parts to keep in mind, the price can also play a factor, obviously. When you're talking about cheap stocks, even a few pennies can make a big difference. Furthermore, with the volatility seen in tech and biotech right now, in addition to social sentiment, it's important to have a plan in place no matter the price of the penny stocks you've got on your list. In the end, having a thought-out strategy can present plenty of opportunities to show that penny stocks can be well worth it.
-$5.4 M Revenue per year: Alpha Esports May 2021 Investor Deck
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