With penny stocks in focus, there are a lot of moving parts that investors need to consider. For one, we have to consider the trends that are in play right now. And in April 2021, there are two to keep in mind. First, we have to account for the phenomenon of Reddit penny stocks.
For those unfamiliar, Reddit is the popular social media website that caused the Gamestop Corp. (NYSE: GME) fiasco only a few months ago. This is a website that allows communities of traders to come together to find the best penny stocks to buy. Because of this, the influence of retail traders has arguably never been higher. While this is only one factor to consider, it is important to keep in mind.
Second, investors need to understand the impact of buying penny stocks on Robinhood. While other brokerages offer similar options, Robinhood has served to democratize trading since its inception. A few years after the launch of Robinhood, many platforms saw its success, and are now competing for their share of retail investors. This has resulted in the influx of many young and non-institutional traders.[Read More] 3 Penny Stocks To Watch As Biotech Surges In April 2021
However, the impact of buying penny stocks on Robinhood has given traders of all types, agency over their portfolios. Both of these factors show that institutional investors are no longer in control of the market wholly.
And because of this, creating a list of penny stocks has never been easier. But, investors still need to account for factors such as speculation and fundamentals, before pressing send on a buy order. With all of this in mind, let’s take a look at some of the top penny stocks to watch next month.3 Penny Stocks to Watch in May 2021 1. Uxin Ltd. (NASDAQ: UXIN)
Up by more than 20% in early morning trading, Uxin Ltd. is a provider of used car dealer services in China. This includes purchasing services, after-sale offerings, consulting, and more. In addition, it deals with nationwide logistics for auto transport as well as title transfers.
This business model has grown substantially alongside the economic growth of China in the past decade. Because the country has gone from largely agrarian to hyper-industrialized in only a short time frame, many businesses have been able to capitalize on this transition.
While some double-digit percentage gains occur without reason, Uxin reported its unaudited third-quarter fiscal year 2021 financial results on April 28th. With this, let’s take a closer look at its Q3 numbers. During the quarter, the company announced that it began operations at its first inspection and reconditioning center based in Xi’an, China.[Read More] 3 Reddit Penny Stocks To Buy On Robinhood Under $5
Additionally, it managed to complete transactions for more than 30,000 vehicles through both online and offline sales. For the quarter, Uxin reported total revenue of around $49.5 million. This is more than triple what it reported only a quarter prior, while albeit being lower than Q3 2020. Although it did take in a net loss of $26.5 million, it managed to increase its gross margin to 2.9% over a negative margin of 22.4% last quarter.
“We are pleased to report that we have completed our strategic transformation into an inventory-owning model in the quarter ended December 31, 2020. This successful transition reflects our commitment and ongoing efforts to better serve our customers with our online products and services…We are building our own inspection and reconditioning centers, or IRCs, where we can refurbish selected inventory to a like-new condition.”CEO of Uxin, Mr. Kun Dai
Considering this positive news and its interesting business model, is UXIN stock worth watching?2. Transocean Ltd. (NYSE: RIG)
RIG is another popular penny stock working in the energy industry. Only a few days ago, announced that it would be reporting its Q1 2021 financial report on May 3rd. Ahead of this, let’s take a closer look at Transocean Ltd. Transocean provides offshore contract drilling services for the oil and gas industry. This includes the global energy industry, with a focus on both harsh environment drilling, and deepwater operations.
To date, it has full or partial ownership in 37 offshore drilling units. This includes 27 ultra-deepwater floaters and 10 harsh environment floaters. Additionally, it is working on the construction of two more ultra-deepwater drillships right now.
In its fourth-quarter 2020 report, RIG managed to improve its bottom line, with total revenue of $690 million. While this did miss the Zacks estimate of $7007 million, it is still a substantial increase over the investor expectation for such a pure-play energy company.
This is considering the fact that the pandemic has resulted in lower oil and gas demand throughout the past year or so. Additionally, the company reduced its drilling activities as a result of the lower demand figures. Interestingly enough, the company reported in that time frame that average day rates had risen by almost $30,000 to $347,500.
This came alongside strong year-over-year average revenues per day growth. For 2021 guidance, the company expects to pull in around $2.7 billion in contract drilling revenues. Similar to GEVO, RIG is subject to the high volatility of the oil and gas industry. With that in mind, is Transocean a buy or not?3. Senseonics Holdings Inc. (NASDAQ: SENS)
Senseonics is a biotech penny stock working in the medical tech sector. It is focused on designing and commercializing products aimed at the diabetes care marketplace. This includes its CGM systems, Eversense and Eversense XL products, and others. These products are inserted into the skin and can communicate with a user’s smartphone via data sent every five minutes.
Considering the size of the diabetes market in the U.S., Senseonics looks like it could have a lot of opportunities in the future. But, this greatly depends on how quickly and how much it can commercialize its products. In its fourth quarter and full-year 2020 report, announced last month, Senseonics generated almost $4 million in revenue. Additionally, it managed to raise roughly $175 million in proceeds from equity offerings undergone in Q1 2021.[Read More] Cheap Penny Stocks To Buy Under $1 On Robinhood, Webull & Fidelity
Tim Goodnow, President, and CEO of Senseonics, stated that “we are very pleased with our fourth-quarter results, our commercial collaboration agreement with Ascensia, and the success of our recent financings. These steps conclude a strategically transformational year for Senseonics.”
The collaboration agreement with Ascensia includes marketing and sales activity for the European market. Because SENS has yet to tap into Europe, this could present solid potential if all goes according to plan. In the U.S., more than 34.2 million people, or 10.5% of the population, have diabetes, according to the Diabetes Research Institute. Because this disease is so prevalent, the need for modern innovations in diabetes care is incredibly important. Considering its market position, is SENS stock worth watching?