Just because something is cheap, doesn’t necessarily mean it’s worth it. This is the case with all penny stocks. When it comes time to buy, there should be much more that goes into your strategy than just, “It’s a cheap stock”. Small cap stocks today are incredibly volatile. The stock market, in general, has experienced yet another major surge. There’s also a huge shake-up going on with one of the most popular trading platforms, Robinhood.
In early news, Robinhood traders began circulating some unnerving details of a new SEC charge. The Securities and Exchange Commission alleged that Robinhood Financial duped users by not saying how the firm makes money.
“Robinhood failed to seek to obtain the best reasonably available terms when executing customers’ orders, causing customers to lose tens of millions of dollars. Today’s action sends a clear message that the Commission will not allow brokers to ignore their obligations to customers.”Joseph Sansone, Chief of the SEC Enforcement Division’s Market Abuse Unit
What’s more is that the Commission alleges that “inferior [execution] prices…deprived customers of $34.1 million even after taking into account the savings from not paying a commission.”
This, of course, hasn’t stopped users from buying penny stocks on Robinhood. But it could mark a changing of the times for millennial traders. Needless to say, the more you know, the better off you are. Going full circle, the more you know about certain penny stocks, the more prepared you might be to make a trade. Just because these are “cheap” are they worth it to trade?Penny Stocks To Buy Under $4: Drive Shack Inc.
We’ve discussed epicenter penny stocks many times in the past. This idea was initially made popular by Fundstrat’s Tom Lee. He explained epicenter stocks as ones that’ve gotten hit the hardest by the pandemic but could rebound the strongest in light of a vaccine. Considering that the latter is now a reality, it might be time to look for some epicenter penny stocks to watch.
Drive Shack (DS Stock Report) has remained in a strong bullish trend for most of the 4th quarter. The company operates its Drive Shack driving ranges. It’s a mixture of sports bars and golf that has grown in popularity. Considering that social distancing measures cause companies including Drive Shack to shut down at points this year, DS is an epicenter stock to watch.
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Shares have now managed to climb from around $1 in October to highs this week of $3.16. Not only does this mark a move of nearly 200%, but DS stock is at a critical level. If you look at the chart, you’ll see the last time DS stock tested these levels in June, it failed to maintain them and ended up falling back down. The difference between now and then, obviously is that now we’ve got vaccines rolling out. What’s more is that this week, analysts at B. Riley adjusted their price target higher on the stock to $5.50. The firm also maintains a Buy rating.Penny Stocks To Buy Under $4: American Battery Metals Company
If you look at some of the industries gaining considerably higher levels of interest, what have you seen? In my opinion, one of the hottest of the fourth quarter has been electric vehicles and renewable energy. With the upcoming inauguration of Joe Biden as the 46th President of the U.S., his initiatives on renewables have become a huge focus for traders. Furthermore, the compounded impact from earlier in the year stemming from Tesla’s Battery Day have added fuel to the speculative fire.
American Battery Metals Company (ABML Stock Report) is a lithium-ion battery recycling tech company. Its mineral resources in Nevada have become a strong point of focus for traders. What’s more, is that the company is in the process of changing its name to American Battery Technology Company and is preparing to open a pilot lithium-ion battery recycling plant in Nevada.
The company announced an update to this project this week. That seems to have become a nice catalyst heading into the end of the month. Pilot factory land has been purchased and water rights were secured. “At full capacity, our pilot facility will recycle 20,000 metric tons of feedstock a year to recover critical and strategic materials needed to manufacture new EV and consumer electronic batteries – and to ensure these lithium-ion batteries do not end up in the landfill as waste,” said CEO Doug Cole.
As electric vehicle stocks continue heating up, you can’t forget about the “food chain” to produce these vehicles. Obviously lithium-ion batteries are “kind of” an important piece.Penny Stocks To Buy Under $4: Energy Fuels Inc.
Sticking with the energy trend, Energy Fuels Inc. (UUUU Stock Report) has also seen a nice surge in price this quarter. Shares were trading around $1.70 at the beginning of Q4. This week UUUU stock reached highs of $3.49. As far as where Energy Fuels fits into the energy stock discussion, the company mines uranium. Specifically, it supplies U3O8 to major nuclear utilities.
Joe Biden is expected to continue the progress of the Trump camp, during his time in office. The incoming President is expected to aggressively develop U.S. technology for export to the international market within five to seven years. In budgetary terms, the nuclear program accounts for about 75% of the Department of Energy’s budget*; roughly $27 billion.
This week, Energy Fuels reported that it will enter the rare earth business next quarter adding to its current offering. The company will work to produce clean energy and entered into a supply agreement with The Chemours Company (CC Stock Report). Under the terms of the agreement, Energy Fuels plans to acquire a minimum of 2,500 tons of natural monazite sans per year. According to the company, after the program’s ramp up, it will be the 1st U.S. company in years to make marketable mixed rare earth element concentrate set for commercial-scale separation.Penny Stocks To Buy Under $4: Gevo Inc.
Gevo Inc. (GEVO Stock Report) has remained a focus for traders this quarter and really for most of H2 2020. The company commercializes low-carbon fuels. It utilizes renewable resource-based carbohydrates as raw materials. Gevo also has an interest in developing renewable electricity and renewable natural gas to use in production processes.
If you’ve been a reader of ours in 2020, you’re likely familiar with this company. Gevo’s progress in building its pipeline of deals has been a major topic of discussion. In the company’s last quarter, CEO, Patrick R. Gruber emphasized the company’s positioning right now.
“This past quarter marked a turning point for Gevo. We secured the blockbuster deal with Trafigura, a major energy player. This off-take agreement brought our total off-take tally to about 48MGPY, collectively representing about $1.5 billion of revenue across the life of the contracts”
Adding to this, Gevo inked a supply deal with Avfuel for sustainable aviation fuel. While there weren’t specific figures given, Gevo said it marked the first load of sustainable aviation fuel for an FBO at the King Country International Airport. What’s more is the Gevo’s progress remains a sticking point for analysts right now. If you look at ratings from the likes of H.C. Wainwright, the firm has a Buy rating on the stock with a $5 target; 109% higher than the current trading levels.
- Department of Defense, https://www.energy. gov/sites/prod/files/2020/02/f71/DEPARTMENT%20OF%20ENERGY%20FY%202021%20BUDGET%20REQUEST%20FACT%20SHEET.pdf