We’re closing in on another long weekend, and several penny stocks could be in focus. Not only are we looking at a President’s Day on Monday (the market’s closed), but it’s Valentine’s Day weekend…during a pandemic. Will there be millions of people flocking to restaurants, nightclubs, bars, and entertainment venues this year? Before you say no, take a second and look at what’s happening across the country.
Cities and individual states are opening up more doors for restaurants. For instance, in St. Louis County, MO, restaurants, and bars are moving to 50% capacity. Meanwhile, in places like Ohio, statewide curfews are lifting.
Bars and restaurants are free to resume regular hours and alcohol sales. Ohio Gov. Mike DeWine said the 11 p.m. to 5 a.m. curfew expired at noon on Thursday. It was linked to the state’s ability to keep COVID-19 hospitalizations under 2,500 for seven straight days.
But when you think about it, this is a huge day for the restaurant industry and typically one where couples go out. So even at half capacity and high demand, it could create an interesting scenario for operators. It could also open the potential for creative options for consumers.
Instead of going out, some may choose to stay in. This is where we could see restaurants/food service businesses focusing on opportunities for things like delivery. I’m not just talking only about actual delivery services but also about companies that offer their own option for delivery.Penny Stocks To Watch Before Valentine’s Day; Are They A Buy?
So this brings us to the speculative angle of this “Valentine’s Day list of penny stocks.” There’s obviously no guarantee that the hype will solidify into anything of merit. But we do see several nano-cap, restaurant- and food-related penny stocks gaining late momentum this week. Is it because of holiday hype, or is there something else to take notice of? Either way, in light of this apparent market interest, it may not be wrong to have a list of penny stocks to watch before Valentine’s Day.
- Waitr Holdings Inc. (NASDAQ: WTRH)
- Rave Restaurant Group Inc. (NASDAQ: RAVE)
- Muscle Maker Inc. (NASDAQ: GRIL)
- iFresh Inc. (NASDAQ: IFMK)
- Drive Shack (NYSE: DS)
WTRH stock is a penny stock that’s been on our radar for quite some time. If you’re not familiar, Waiter Holdings provides online food ordering and delivery services in the U.S. I know you’re probably thinking, well, what about UberEats and Doordash and all the other big-name competitors? Surprisingly, WTRH has made a big name for itself in over 640 cities in the country.
Waitr partners with both independent local restaurants and big-name chains, providing customers with a comfortable, online food ordering experience. During the pandemic, food delivery has reigned supreme as an industry that is affected positively by Covid-19. Even outside of being in a pandemic, food delivery companies have seen a significant increase in popularity in the past few years.
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While there aren’t many penny stocks that work in this area, WTRH has managed to be at the forefront of many investors’ minds. This is because it is both a tech penny stock and a consumer services penny stock. Since the Doordash IPO, investors have been showing a lot of bullish sentiment around similar companies. Also, WTRH stock has seen a tremendous increase in its average daily volume during that period. Obviously, investors should keep a close eye on WTRH’s financials to craft a real picture of what the company looks like. But, heading into Valentine’s Day weekend, ordering-in could be the “new” dining-out.Rave Restaurant Group Inc.
Rave Restaurant Group operates differently from Waitr Holdings, but both companies work in the delivery food market. As opposed to offering an application for food delivery, Rave Restaurant Group is the direct owner of several large restaurant franchises. This includes the franchises, Pizza Inn and Pie Five, among others. Rave targets both standalone real estate and strip mall kiosks and, more recently, food courts and college campuses. As you can see, Rave has worked to target several unique food markets, whereas most franchises work specifically on one model. This diversification is one of the reasons that investors seem to like RAVE stock.
A week ago, Rave reported its Q2 2021 financial results for the period ended on December 27th, 2020. The company brought in a net income of $102 thousand, compared to $14 thousand in Q2 2020. Total revenue for the period came in at around $2.1 million. This represents a $0.7 million decrease over the same period of last year. While this decrease may seem disheartening, the majority of its restaurants depend on in-person business.
However, in the past few months, the company has greatly increased its delivery and pick up services. While the pandemic has affected Rave Restaurant Group, the company is showing resiliency in the face of Covid. Brandon Solano, CEO of Rave, stated that “while we continue to work through challenges presented by the pandemic, we are seeing strong indications that the team and strategy we’ve put into place are taking hold and yielding results in repositioning RAVE for long term success.” Will heart-shaped pizzas be something people “RAVE” about heading into the holiday weekend?Muscle Maker Inc.
Muscle Maker Inc. is another company that has seen an increase in popularity during the pandemic. Consistent with the other penny stocks on this list, Muscle Maker Inc. operates a delivery sector within its business. In fact, the company has transitioned from purely in-person dining to a large meal delivery service. What makes it different than the other companies on this list is that GRIL delivers pre-made meals on a by order basis. This model has become extremely popular during and outside of the pandemic. In addition to offering delivery, Muscle Maker is an owner and franchiser of Muscle Maker Grill and Healthy Joe’s restaurants. These are all held under the GRIL name. A few weeks ago, the company also added the Burger Joe name as one of its newest sub-brands. The company stated that this new restaurant would offer healthy alternatives to traditional fast food.
While it won’t be a standalone brand, it will be offered in its existing Muscle Maker Grill and Healthy Joe’s restaurants. Mike Roper, CEO of Muscle Maker Grill stated that “we’re thrilled to kick off the new year with some new brands and offerings. Burger Joe’s provides a “healthier for you” burger and a “cheat day” option for those who want a more decadent burger. Households will no longer be divided on where to order – we have something for everybody. We can launch these brands from our already existing brick and mortar and ghost kitchen locations quickly with little cost associated making them a win for our non-traditional growth plans.”
Though nobody is looking for a “cheat day” on Valentine’s Day, could speculation on restaurant names help momentum in GRIL right now?iFresh Inc.
iFresh Inc. is a supermarket chain offering online grocery ordering around the East Coast. The company specializes in Asian-American foods and is working to capitalize on this market. The company states that it has a proprietary in-house delivery network. Also, it has a strong online sales channel. These items together have helped it to grow during the pandemic. Because of its growing size, the company can offer specialty Asian foods at a lower price than many of its competitors. While iFresh doesn’t put out too many announcements, it did release its Q2 2020 financial results a few months ago. In the results for the quarter ended on September 30th, iFresh posted net sales of $24.2 million. This represents a small increase over the same period of the previous year.
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During the quarter, the company acquired Jiuxiang Blue Sky Technology. Jiuxiang is a growing e-commerce enterprise based in China. At the end of the quarter, the company posted $7.8 million in cash. Also, it had accounts receivable of $4.3 million. Long Deng, Chairman of iFresh, stated that “the second quarter’s weak financial results reflected a combination of factors including Covid-19 and related economic conditions. However, I am very proud that the iFresh team navigated the challenging circumstances to deliver a solid quarter.” While iFresh took a small hit in this quarter, investors should wait to see its next financial results to make a proper judgment. But with its delivery and online ordering services, it looks like iFresh is working around the pandemic. With this in mind, is IFMK a penny stock to watch?Drive Shack
Finally, Drive Shack is one of the entertainment/reopening/epicenter penny stocks we’ve followed for a long time. The company operates driving range-sports bars in the U.S. Similar to a Top Golf, the idea is centered around golf with the feel of your neighborhood bar to go watch a game at. The company ran into trouble last year thanks to the virus. But as states began loosening restrictions, DS stock began reflecting the upbeat sentiment.
In January, the company announced a collaboration with pro-golfer Rory McIlroy. He is to make a large investment in the Drive Shack’s Puttery franchise’s future growth via his investment vehicle, Symphony Ventures. Drive Shack has previously announced its plans to open an additional five Puttery locations by the end of 2021 and 10 other sites by the end of 2022. To achieve this, the company also announced a $50,000,000 public offering. Net proceeds will be used for working capital and the planned development of five of seven Puttery venues in 2021, among other things, according to a statement. What’s also interesting is that the company’s own direct had even picked up shares for this raise. In a Form 4 filing, you’ll see Wesley Edens bought 672,780 shares at the $2.40 price.
Obviously, social distancing is a big deal right now. But with the distance between driving range stalls it could be something that couples look to for some excitement instead of going out to a candle-lit dinner. What do you think?Valentine’s Day Penny Stocks
Obviously, there is a lot of speculation thrown around in this article. But after seeing some of the post-market momentum in the market centered around these kinds of companies, it may not be bad to make your own list of Valentine’s Day penny stocks to watch.