There’s no doubt that penny stocks present an interesting option for traders. By definition, we’re talking about companies with shares trading below $5 and are well-known for their higher level of risk. Even with this as the case, it hasn’t deterred thousands of traders from buying them each week.
When it comes to finding the best penny stocks to buy, it’s important to look at current events in the stock market. This week there are plenty of economic events to take into consideration. One of the foremost things to take into consideration will be the kick-off of Q1 earnings results. The market could gain a glimpse of any progress made as vaccine distribution continues. Companies like Pepsi (NASDAQ: PEP), Bed Bath & Beyond (NASDAQ: BBBY), and Delta Air Lines (NYSE: DAL) could shed some light on the temperature of the economy.
This week will also bring consumer price inflation figures into focus. Tuesday, the Commerce Department delivers these at 8:30 AM ET. Inflationary fears remain a hot topic of conversation right now, even as the S&P and Dow reach new highs. This will also weave in with the numerous Federal Reserve speeches this week as discussions continue about interest rates.
Thursday will also bring some attention to U.S. retail figures. The consensus forecast? Retail sales are expecting a jump of 5.5%. That would represent an increase from February’s decline of 3%, the largest dip since last April. Whether or not these events spark momentum in the stalled rally for small-cap stocks is to be seen. Looking at benchmark ETFs like the Russell 2000 Small-Cap ETF (NYSE: IWM), it hasn’t mirrored the same trends as the broader markets. However, it has bounced back a bit from its late March lows.Looking For The Best Penny Stocks To Buy This Week
Not all penny stocks fit the definition of “small-caps”. ETFs like the IWM have been used as a gauge for cheaper stocks. April has started a bit lighter in the volume department. Despite the S&P and Dow reaching new all-time highs, last week’s volume, overall, was some of the lightest the markets saw since mid-February. Looking ahead at this week, will economic data and Fed speeches reignite momentum?
In light of this, it doesn’t hurt to have a list of penny stocks put together. When Monday’s bell rings, that’s when you can decide if they’re the best to buy right now or wait on.
- Pintec Technology Holdings Limited (NASDAQ: PT)
- Obalon Therapeutics Inc. (NASDAQ: OBLN)
- Cyclerion Therapeutics Inc. (NASDAQ: CYCN)
Shares of Pintec Technology surged in after-hours trading on Friday. Fintech companies have been a large focus for traders this year. With the boom in cryptocurrencies, the popularity of NFTs, and the growing use of blockchain technology, financial stocks are looking a bit different than they did a few years back. Pintec offers a technology platform enabling financial services in China.
This week will be a big one for the company as it joins the list of earnings scheduled for bank stocks. While Wednesday is sure to be an important day for the company, there are other things traders are looking at before the date. Friday, the company posted a 6K revealing some big news. The company agreed to acquire all the equity interests in Riche Bright Securities Limited. This is a securities brokerage firm based in Hong Kong and registered with the HK Securities and Futures Commission.
With a big week ahead and momentum building late Friday afternoon, PT could be one of the penny stocks to watch right now.Obalon Therapeutics Inc. (NASDAQ: OBLN)
One of the companies discussed recently is Obalon Therapeutics. It develops medical devices to treat obese and overweight people. But the main focus for traders right now is on its pending merger with ReShape Lifesciences Inc. Announced in January, Obalon has been working on the customary closing of the transaction.
I mention this because Friday, OBLN stock saw a strong push during after-hours trading. There weren’t any headlines to speak of but, similar to PT, there was a filing that could be of interest to traders. Obalon put out an amended S-4 outlining the merger and requesting shareholder approval. In addition to the proposed merger, Obalon also revealed that it’s seeking a few other approvals from shareholders of record.
This includes a proposal for a reverse stock split in the range of 1-for-3 to 1-for-10. With the merger expected to close this quarter, the clock is ticking. Obalon will be the combined company entity and renamed as ReShape Lifesciences Inc. ReShape, renamed ReShape Weightloss Inc. will be the combined company’s wholly-owned subsidiary and trade under the symbol “RSLS” if the merger is fully consummated.Cyclerion Therapeutics Inc. (NASDAQ: CYCN)
Another one of the biotech penny stocks to watch this week is Cyclerion. In a similar fashion as PT and OBLN, CYCN stock surged after the closing bell on April 9th. No headlines came with the move. No filings came out either. Shedding a bit more light on Cyclerion, the company develops treatments that restore cognitive function. In particular, the company uses its soluble guanylate cyclase (sGC) pharmacology to advance its pipeline. According to Cyclerion, sGC has the potential to impact a broad range of CNS diseases
The company’s lead program is CY6463. The sGC stimulator modulates a key node in a fundamental central nervous system (CNS) signaling network. CY6463 has shown rapid improvement in biomarkers associated with cognitive impairment and is in clinical development for Alzheimer’s Disease with Vascular pathology and Mitochondrial Encephalomyopathy, Lactic Acidosis, and Stroke-like episodes (MELAS).
“The highly encouraging clinical data from our lead asset, CY6463, is guiding our clinical strategy and we expect 2021 to be an exciting year as we begin to explore the impact of modulating a key node in a fundamental CNS signaling network in patients,” said CEO Peter Hecht, Ph.D., in the company’s last earnings update.
A MELAS Phase 2a study is underway. So the market could be waiting for any updated data to shed light on progress. As it stands right now, top-line data is expected in “mid-2021.” There’s also a Phase 2a study on patients who have Alzheimer’s disease with vascular pathology. The company is expected to initiate this in “mid-2021” as well. Does Friday’s aftermarket momentum have anything to do with its current pipeline? We’ll have to see how Monday begins. In the meantime, CYCN could be one of the penny stocks to watch this week.