As the pandemic rolls on, penny stocks remain a focus of day traders. Because the term “penny stock” simply refers to securities under $5, the options are almost limitless. But, as smart investors, we always have to stay one step ahead of the game. This means working to predict which areas of the market could see positive momentum, and which might slow a bit. We saw this exact situation during the latest uptick in interest with electric vehicle penny stocks. Right now, there are a few factors that are specific to U.S. investors.
First and most obvious of all, COVID. This has been a major factor for penny stocks and blue-chip stocks alike, in the past twelve months. Next, we have stimulus talks that are currently going on. And lastly, we have rising unemployment rates in the U.S. The last two of these seem to be the most important right now. During the trading day on December 4th, confidence in the market seemed to be quite high.
While unemployment numbers did jump dramatically in November, current talks about a federal stimulus package seem to be going quite well. This means that there is a great deal of positive momentum currently working its magic in the stock market. And with the Dow Jones reaching an all-time high on Friday, it looks like the future could hold a decent trajectory for markets. With this in mind, let’s take a look at four penny stocks to buy for under $3 right now. Will they provide an opportunity to investors next week?Penny Stocks To Watch Right Now:
- Microvision Inc. (MVIS Stock Report)
- Federal National Mortgage Association (FNMA Stock Report)
- Sesen Bio Inc. (SESN Stock Report)
- Franks International NV (FI Stock Report)
Microvision Inc. is one of the bigger movers last week. During the Friday session, MVIS stock pulled in around 12.6% in gains. For some context here, Microvision works as a producer of ultra-miniature sensing technologies. These technologies are based on advanced laser scanning methodology. In the past few years, the application of these products has become widespread. Currently, the company is utilizing its products in combination with hardware, software, and other areas of the LiDAR market.
Another thing to factor in is investors are searching for sympathy trades after the big move that Luminar Technologies Inc. (LAZR Stock Report) had last week. Luminar gained a lot of steam after going public and attracting investors focused on LiDAR tech stocks. In just 2 days of public trading, LAZR shares climbed from lows of $19.10 to $34.44. So this could be something to keep in mind. What’s more, is that MVIS stock has been one of the frequent ones we’ve followed for the better part of the last 7 months. Back in April, MVIS stock was trading at just $0.21 a share. Friday, Microvision stock price hit an aftermarket high of $2.75.
With the increased use of technology during the pandemic, including advancements in self-driving, EV, and sensor tech, companies like Microvision and Luminar have both seen increased popularity. In addition, companies like Luminar Technologies and others, have helped to boost sentiment for all types of LiDAR stocks and LiDAR penny stocks. With this in mind, Microvision Inc. could continue to be a penny stock to watch.Penny Stocks to Buy For Under $3 #2: Federal National Mortgage Association
Federal National Mortgage Association is the long name for the government backed enterprise known as Fannie Mae. For those who don’t know, Fannie Mae provides loan services for those wishing to get mortgages in the U.S. In the past month, shares of FNMA stock have shot up by a staggering 48%. One of the things for investors to take note of is that FNMA stock is highly dependent on what is occurring with the economy.
Announcements recently came out that Fannie Mae could be overturned from public to private. Following the wake of the 2008 financial crisis, the Feds decided to get involved in FNMA, making it a public entity. This was never meant to be a permanent solution, but rather one to help weather the storm of economic crisis. Since then, those who invested in FNMA have yet to see profits returned to them in the form of dividends.
This means that incentives to invest in Fannie Mae have been low. But, with the news that the loan agency could soon go back into the private sphere, investors are excited about the future potential for FNMA stock. Rick Sharga, a mortgage industry specialist, stated that “GSEs (such as FNMA) would be able to successfully exit the conservatorship sometime in 2022. Accelerating the exit by at least a year seems ambitious at best, and risky at worst, given the critical role Fannie and Freddie play in providing mortgage market liquidity and stability.” While a lot remains unknown, in the meantime FNMA stock could be one to watch heading into the first half of next week.Penny Stocks to Buy For Under $3 #3: Sesen Bio Inc.
Sesen Bio Inc. is a clinical-stage company working on various cancer therapeutics. The company’s lead program, Vicineum, is currently in Phase 3 trials to treat invasive bladder cancer. On December 4th, shares of SESN stock shot up by around 17% by EOD and into after-hours trading. In the past month, the biotech penny stock has climbed by around 44% which is quite substantial. Lastly, in the past six months, shares are up by around 96%. The company has been working heavily on the use of Vicineum for a wide range of applications including aforementioned bladder cancer.
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Thomas Cannell, CEO of Sesen Bio, recently stated that “we believe the probability of regulatory success is high in both the U.S. and Europe due to the strong clinical profile of Vicineum enabled by the unique dual mechanism of action. Once approved, we think Vicineum has the potential to be the best-in-class therapeutic in BCG-unresponsive NMIBC with a significant global commercial opportunity.”
While biotech penny stocks have remained quite volatile, Sesen Bio could continue to perform amidst large market uncertainty. One of the main things to watch right now is how the latest deal between Sesen and Hikma Pharmaceutical performs. Last week, the company inked a deal with Hikma to license Vicineum and register it for commercial use in the Middle East and North Africa. The deal opens up earn-out and milestone opportunities for Sesen as well as an upfront payment for the deal. Whether or not this makes SESN one of the penny stocks to buy next week remains up to you. However, shares just reached a new 52-week high on Friday with strong volume heading into the weekend.Penny Stocks to Buy For Under $3 #4: Franks International NV
Franks International is a company that provides engineered tubular services for the energy industry. This includes national gas and oil. The company has operations around the U.S., Europe, the Middle East, Africa, Latin America, and Asia. A few weeks ago, Franks reported its Q3 earnings for 2020. In the results, the company posted a loss of around $0.1 per share. This amounts to roughly $27 million in losses. While this may not seem like the best case, it is still an almost 20% improvement over the previous quarter. During the third quarter, the company posted a strong revenue amount of around $84.4 million. In the same quarter, adjusted EBITDA came out to around $1 million.
Upon announcing the results, the company stated that investors should take into account the effects of covid on all industries including energy. While covid has been a major factor in growth for all companies, the energy sector has had a good deal of trouble in this regard. Something else to note is that energy stocks and related companies have been recovering over the past few weeks. In light of this, it’s important to note the outlook of Franks. In its investor call following the earnings report, CEO Mike Kearney weighed in on the outlook, which I think is something traders should pay attention to:
“Activity overall is increasing. So, this positions us well for an improving revenue backdrop in the fourth quarter. We see these trends continue into 2021, and believe next year will provide for stronger top line growth that will translate into significantly improved EBITDA and margins.”
Since the start of Q4 2020, shares of FI stock has shot up by 83%. With travel potentially resuming once a vaccine is widely available, energy consumption could soon go back up to pre-COVID levels. Whether or not this will affect the price of FI stock remains to be seen. But in the meantime, it could be one of the cheaper energy penny stocks to watch heading into the new week.