3 Energy Penny Stocks for Your Summer Watchlist
In the past couple of months, we've witnessed a spike in the value of energy penny stocks. Additionally, many investors believe that we are headed toward a green energy revolution. Because this is taking place right now alongside the oil and gas industry growing, there is a lot to take advantage of.
While the price of fossil fuel-based energy crashed as the pandemic hit, new bullish trends are emerging. As vaccine rates hit all-time highs and people begin to travel again, there's no doubt that the demand for oil and gas will go up. While this may not be seen in the price of energy penny stocks for some time, it is something to consider.
As of 2021, the energy component of the S&P 500 has been one of its highest-performing sectors. Yardeni Research states that it has outperformed all other sectors as of June 8th. This could be for multiple reasons, but what's important is that in comparison to the overall performance of the S&P, energy continues to surprise. So far the S&P has produced a YTD return of 12.5%, while the energy market alone has grown by 46%.
Are Energy Penny Stocks Worth It?
As the economy begins to reopen and COVID-19 cases continue to decline, penny stocks are seeing more momentum than in the last year and a half. Additionally, as the government gets back to business as usual, more emphasis could return to energy and the renewables revolution. All of this shows that there is a great deal of excitement with energy penny stocks right now.
From a political standpoint, Joe Biden is advocating heavily for the U.S. to get on track toward green energy dependency. To date, Biden has already signed several important measures allowing the country to move forward on this goal. While there is a long way to go, the first steps are being made as we speak.
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As it pertains to penny stocks, making a watchlist will always be key. Many investors use these to track different sectors as well as specific stocks they are interested in. Having a list of penny stocks keeps us informed about market trends and which stocks we may need to find more information about. Additionally, investors can use analyst sentiment to see where an industry could be headed, and what the general feelings about that industry are.
It's worth noting that right now, all penny stocks are showing high volatility. This is something that comes with the territory. But, if investors know how to use these fluctuations to their advantage, it can lead to rapid portfolio growth (or declines) in a small period. While some investors choose to find penny stocks to hold, others are more geared toward short-term swing trading. With energy stocks, it can go both ways. However, it is important to know what type of trader you are.
Keeping all of this in mind, there are plenty of penny stocks to buy right now. But, knowing where to find them and which have value is where it can become a challenge. Regardless, it looks like there is a great deal of momentum in the stock market in June 2021. Considering this, let's take a look at three energy stocks for your 2021 watchlist.
3 Energy Penny Stocks That Belong On Your Watchlist
- ENGlobal Corp (NASDAQ: ENG)
- Ocean Power Technologies Inc. (NASDAQ: OPTT)
- Denison Mines Corp (NYSE: DNN)
ENGlobal Corp (NASDAQ: ENG)
One energy penny stock worth looking at is ENGlobal. This penny stock is a leader in the renewable and traditional energy industry. Its focus is on providing project solutions to its clients both domestically and worldwide. ENG stages its operations through two major business domains: Commercial and Government Services. This allows it to operate in both private and public markets, maximizing its potential business.
As a company, ENG specializes in engineering, procurement, and construction management. Its automation segment is in charge of designing, automating, and implementing advanced systems for its clients. This makes ENG a one-stop shop for when it comes to implementing better energy practices. And, given that it works on both fossil fuels and renewables, its market is as broad as it can be.
Recently, ENG entered into a securities purchase agreement with investors. The deal is worth around $20 million and involves the sale of 7,132,859 shares of its common stock at $2.80 per share. When it comes to penny stocks, it's common to see similar deals as capital is the main source of growth.
But, with energy companies, this is even more important as funds directly relate to the amount of a given product that a company can produce. Because ENGlobal has so much going for it right now, it remains at the top of mind for many investors. Given this, do you think ENG would make a good addition to your penny stock watchlist?
Ocean Power Technologies Inc. (NASDAQ: OPTT)
When adding to your energy penny stock watchlist, it's important to think about the future. Renewable energy is at the forefront of novel technology and political policy. Ocean Power Technology operates between these two as an electric power and communications solutions provider. Its forward-thinking business model aims to provide renewable energy to remote locations around the world.
Not only does it target untapped markets, but it has been successful at commercializing its services for profit. In the past month, shares of OPTT have shot up by over 25% and in the past year, by over 340%.As a leader in innovative and cost-effective energy solutions, OPTT recently announced that it plans to change its listing from the Nasdaq Capital Market to the NYSE American Stock Exchange.
"We are pleased to announce our transfer to the NYSE American, where we'll be listed alongside what we consider to be many of the world's most forward-thinking companies.
As OPT's portfolio of innovative solutions continues to grow, we want to enhance the visibility of the Company and continue to expand our investor base moving forward in 2021 and beyond. We believe that operating as an NYSE American-listed company will help us achieve these goals."CEO of OPTT, George H. Kirby
This is a big move and one that could give OPTT access to greater capital from investors. As we stated earlier, capital is pertinent to growth in the energy industry. With all of this in mind, is OPTT stock worth watching?
Denison Mines Corp. (NYSE: DNN)
It's widely known that nuclear power is one of the most cost-effective and energy efficient solutions out there. While many have a sour taste in their mouth for nuclear energy due to certain past events, factually, it is a very safe way to produce power.
Events in the past have been marked by human and engineering errors, which are now much easier to avoid. As we look for the energy source of the future, nuclear energy continues to be at the top of the list. While solar, ocean power, wind, and others are invaluable, nuclear tends to be the most efficient power production method out there.
In the past six months, shares of the uranium exploration company, Denison Mines, have shot up by over 170%. Over the past month alone, DNN stock is up by around 18%. While the demand for uranium has not shot up substantially in the past year, the oil/energy demand has. And when fossil fuel demand goes up, we see an obvious correlation between that increase and the increase in demand for power. So, this tends to result in alternative energy stocks also increasing in value, such as DNN stock.
In May, we witnessed a strong increase in the value of uranium. And, with Covid ending, it looks like many new power-plant construction projects could begin again. And while Denison works to get its Wheeler River Project up and running, it still holds a large stockpile of uranium ore. So, while Denison could have value in the long term, is it worth watching right now?
Which Energy Penny Stocks Are You Watching?
Moving further into 2021, investors are witnessing a lot of forward momentum. When considering penny stocks to buy, it is key to consider market trends. As of right now energy is on the rise and seems to show no signs of slowing down.
Backed by social media trends along with recent policy changes, energy companies have an optimistic outlook on the foreseeable future. There is of course risk associated with trading penny stocks, but if one does proper research, there is no reason why trading energy penny stocks can not be a lucrative endeavor. With all of this in mind, which penny stocks are you watching right now?
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