This weekend we discussed the idea of penny stocks and analyst ratings. The biggest take-away is that forecasts should be just one small part of your research process. Only going by an analyst recommendation could actually pose certain risks depending on your trading strategy. But, they aren’t bad to take note of when looking at the bigger picture.
In the stock market today, we see plenty of actively traded penny stocks. This can make it difficult to focus with so many big movers hitting scanners. With this in mind, it’s important to remember your trading strategy. Are you planning on day trading stocks, swing trading them, investing, etc.? The timing of your trade can dictate the type of information you look for.
An example of this is another style of trading called scalping. It involves buying and selling within minutes or even seconds at a time. The goal is capturing gains based on sporadic volatility in a stock. If this is one of the strategies you’re looking to use, then what analysts say may not mean much. However, if you’re looking at swing trading or investing in penny stocks, you might want to see what they have to say. Again, depending on your trading style, research is conducted differently and may or may not include certain factors.
In this case, we’re looking at some penny stocks analysts rate a buy right now. They’ve all seen a surge in activity and could be on the radar for traders this week. However, it will be up to you to decide if they’re the best penny stocks to buy right now or if you should wait/avoid them entirely.Penny Stocks To Buy [according to analysts]
- Allied Esports Entertainment (NASDAQ: AESE)
- Ovid Therapeutics (NASDAQ: OVID)
- Northern Dynasty Minerals Ltd. (NYSE: NAK)
If you’ve been reading PennyStocks.com articles long enough, you’ve probably come across our coverage of Allied Esports. The emerging gaming industry has taken the market by storm. Not only do we see things like Esports gain attention, but now with iGaming, sports betting has started to take shape in this new arena (no pun intended). With virus cases remaining a clear point of interest, what other sport can you watch that doesn’t involve close contact? Of course, videos come to mind.
For the better part of the last 2 months, shares of AESE stock have climbed strongly. If you recall, in December, Allied had just come off of a lackluster earnings report. However, in management’s commentary, CEO Frank Ng explained that multiplatform content and interactive services were two big drivers. Obviously, the in-person portion of the model dragged thanks to the virus. However, this small bit of info seems to have resonated well with the market. Since then, AESE stock has climbed as much as 139%.
Right now, Allied is looking at strategic options for the esports business. This includes a possible sale. Also, a look at Allied’s filings shows some interesting moves being made by institutions. For instance, Element Partners, LLC & Knighted Pastures LLC reported 19.5% and 14.1% stakes in the company, respectively. In particular, the Element Partners’ position was concerning the sale of Club Services, Inc. to Element.
As far as analysts are concerned, the most recent rating from Stephens, for instance, is “Overweight. The firm also put a $4 target on AESE last year.Ovid Therapeutics
Another one of the penny stocks with bullish analysts behind it is Ovid Therapeutics. In December, Cantor Fitzgerald, Royal Bank of Canada, and Ladenburg Thalmann all reiterated their Buy, Overweight, or Outperform rating on the penny stock. Among the 3, Royal Bank of Canada and Ladenburg gave price targets of $5 and $7, respectively.
One of the main focus points for traders looking at Ovid has been its inclusion into the Nasdaq Biotech Index (NASDAQ: NBI). The Index tracks the performance of certain biotech companies and is re-ranked annually. Furthermore, other traders have been watching for beaten-down biotechs. Ovid fits that description after plummeting late last year. The company’s shares fell from over $6 to as low as $2.25 after a Phase 3 study of its OV101 in Angelman syndrome missed its primary endpoint.
Something that has stuck with traders is what Jeremy Levin, DPhil, MB, BChir, Chairman and Chief Executive Officer of Ovid said.
“For now, the focus of our future development efforts will concentrate on the development of our other late-stage asset, OV935, in two rare epilepsies: Dravet and Lennox-Gastaut syndromes. With our partner Takeda, we plan to initiate pivotal trials in these conditions in the first half of 2021.”
Considering we’re in that timeframe, speculation has begun to focus on these trials.Northern Dynasty Minerals Ltd.
Northern Dynasty has experienced a rollercoaster of a trend over the last several quarters. Questions arising on management ethics and even the future of its main target, the Pebble Project, have given rise to more uncertainty and plenty of speculation. However, you’ll notice that the market’s current trend is much more bullish compared to how it looked in December. A lot of that has to do with the request for an appeal submitted for the Project in its permitting decision.
“We believe our submission clearly demonstrates the USACE’s Record of Decision for the Pebble Project is contrary to law, unprecedented in Alaska and fundamentally unsupported by the administrative record. These are matters not only of concern to Northern Dynasty and its investors, but to all Alaskans.”Ron Thiessen, Northern Dynasty President & CEO
But while investors continue monitoring these developments, analysts are already starting to make their forecasts known. For instance, H.C. Wainwright currently maintains a Buy on the stock. The firm also has an $0.80 price target.
Even though TD Securities has given a Hold rating to Northern, its current target price of $1.15 is still over 70% higher than NAK stock’s price this week. In light of this speculative momentum, will this be one of the penny stocks on your watch list in February?Are Penny Stocks Right For You?
As I explained above, there are many different styles for making money with penny stocks. No Matter what analysts have to say, the final choice to buy or sell is up to you. Where some traders can study charts and technicals for their strategy, others look for fundamentals and sentiment. Based on these stocks’ trends, do you agree or disagree with what analysts have to say?