During COVID, trading penny stocks has been slightly different than in many years prior. While most stocks tend to trade based on some degree of speculation, penny stocks tend to be more speculative than most. This is due to their under $5 price point and the volatility that comes with the territory. Most of the time, there is a high correlation between price and volatility. As prices go up, stocks tend to be less volatile. Now, this is not always the case, but it does stand true for a large percentage of stocks.
On the other end, lower-priced stocks such as penny stocks can be more volatile and speculative than most. This can be either a good thing or something that some investors want to avoid. For example, those who swing trade (make multiple trades per day), may want a more volatile penny stock to watch. This can mean high price swings and thus large profits during the trading day. On the other hand, it can also lead to swift losses if one is not careful.
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On the contrary, those who trade on longer time periods may want to avoid high volatility in the short term. While volatility in the long term can be a benefit to these investors, short-term volatility is not usually important for those who hold positions for months or even years. Both of these trading methods are valuable, and both can be utilized when looking for penny stocks to buy. With all of this in mind, let’s take a look at whether or not these four penny stocks could have momentum left in the future.Small Cap Stocks To Watch
- Torchlight Energy Resources Inc. (TRCH Stock Report)
- ENGlobal Corp. (ENG Stock Report)
- Neurometrix Inc. (NURO Stock Report)
- JC Penney Company Inc. (JCPNQ Stock Report)
Torchlight Energy Resources Inc. is one of the big gainers on December 7th, pulling in around 34% by EOD. The company works as an oil and gas exploration company with a heavy focus on acquisition and development. The company also states that its primary assets are based in West and Central Texas. As an energy penny stock, TRCH stock has seen a lot of upward momentum since around September. This is around the time that investors began to feel comfortable in the trajectory of the pandemic. Since late September, shares of TRCH stock have shot up by over 190%. A lot of this upward momentum is based on the idea that travel and thus fuel consumption, will begin to shoot up as the pandemic comes to an end.
With vaccine hopes for the U.S. on the rise, many believe that demand for energy could go back toward its pre-COVID levels. This would be an obvious plus for companies like Torchlight Energy as fuel demand has gone down dramatically during the pandemic. In the past thirty days, the company has come out with a few announcements. On November 16th, the company stated that it has entered into a closed agreement with the operator of the Winkler Project and McCabe Petroleum Corp.
This agreement will allow Torchlight’s interest in the project to be sold at around $450,000. Additionally, the company announced that it has completed its hydraulic fracturing of the Hazel Project, which will allow flowback to commence in the near future. With this in mind, investors can decide if TRCH stock is a penny stock to watch or not.Penny Stocks to Watch: ENGlobal Corp.
ENGlobal Corp. operates as an engineering company working out of the energy sector in the U.S. The company states that its speciality is the automation, design, development and integration of services tailored specifically to energy. While no specific news came from the company on December 7th, the NASDAQ stated that ENG stock had regained compliance with its exchange.
The main requirement to be listed on the NASDAQ is to have a price higher than $1 per share. ENG stock managed to hold an above $1 price mark for more than ten consecutive trading days. Additionally, last month the company announced its Q3 2020 financial results. The company stated that its revenue came in at around $15.72 million. This represents a solid 13% jump over Q3 2019.
The company did manage to increase its net losses slightly by around $0.01 per share which represents around $1.11 million in total losses. But, if we look at the total net losses for the full nine-month period ending in September, we see that the company managed to bring in an income of around $59,000. When compared to the net loss of $2.2 million for the nine months ending on September 30th of 2019, we see that this is quite good. All in all, it looks like ENGlobal did see its bottom and top lines affected by the COVID pandemic. But, with hopes high that the pandemic is on a downward trajectory, investors could choose to view ENG stock as a penny stock to watch.Penny Stocks to Watch: Neurometrix Inc.
Neurometrix Inc. is a biotech company that saw shares shoot up by around 9% during intraday trading. Once the market closed and into after-hours, shares of NURO stock shot up by a staggering 50.2%. While there was no news that specifically led to this gain, NURO stock is correlated with other COVID penny stocks. In October, the company announced its Q3 2020 financial results for the period ending on September 30th. In the results, the company posted around $2 million in revenue. The gross margin for the company shot up by around 17% from the third quarter of 2019 to roughly 73%.
CEO of Neurometrix, Shai Gozani, stated that “we are encouraged by the recovery of commercial activity in the third quarter, particularly regarding DPNCheck. Although business uncertainty remains, we are meeting our customers’ needs on a timely basis while strengthening our unique Quell technology, including its clinical foundation and intellectual property position.” With a lot in the works, NURO stock continues to look like an attractive biotech penny stock. But, whether or not it can keep its volatility headed upwards, remains to be seen. In the short term however, NURO stock could be viewed as a penny stock to watch.Penny Stocks to Watch: JC Penney Company Inc.
JC Penney Company Inc. is a company that most Americans have probably heard of. YTD, shares of the clothing retailer have mostly seen a downward trend. This is of course due to the restrictions surrounding indoor shopping due to the coronavirus. But, as vaccine hopes continue to rise, JC Penney has seen more positive momentum in the past month or so. Since the beginning of December, shares of JCPNQ stock have risen by around 36%. The majority of this is due to the 39% gain it took in during trading on December 7th. On the 7th, the company announced that it will be selling its retail and operating assets to Simon Property Group and Brookfield Asset Management Inc.
This may not seem like a big deal, but it is given the fact that the company filed for bankruptcy back in May. CEO, Jill Soltau, stated that “we have accomplished our goal of putting JCPenney on a secure path for the future as a private company so that we can continue to serve our loyal customers.”
Now, the majority of this deal seems to be based on the massive real estate holdings that the company has. Regardless, the news of it being purchased is big and should not be ignored by traders. While JCPNQ stock is still quite volatile, it could remain a penny stock to watch for some.