With penny stocks, the potential to generate short-term, mid-term, and long-term gains can be more achievable than with blue chips. When making a list of penny stocks, you’ll want to consider two categories. While most stocks under $5 will be geared toward short-term gains, investors also can bet on the long-term future of a company. This is less common, as most investors tend to swing trade penny stocks, but it does happen.
So, how can you lookout for the next best penny stocks to watch? Companies are often releasing updates in the form of financial filings and news. Rumors and speculation can have a large effect on a company’s performance as well. There are some sectors in which it can be easier to tell what the future looks like.[Read More] Hot Tech Penny Stocks To Buy? 3 To Check Out Before May
For example, energy penny stocks tend to rise and fall with the price of oil and gas. Another example is biotech stocks which can perform well based on trial advancements and the commercialization of compounds.
When it comes to investing in penny stocks under $3, there is some risk that investors should consider. Securities that are lower in price tend to be more volatile than those above the $3 mark. This volatility can be both positive and negative depending on your investing style. The best way to see profitability with cheap stocks is to have a trading education. Alternatively, investors can use all of the research tools available to them, to create a penny stock watchlist.
It’s common to see stocks in this price range fluctuate greatly over a given trading day. At the end of the day, the best thing an investor can do is understand the company that they are investing in fully. This means looking at balance sheets, understanding its financial situation, and the speculative factors that may be impacting it. Because prices can shift quickly, doing your due diligence is always key when investing in any stocks, let alone penny stocks. With this in mind, let’s look at three companies that could potentially make your watchlist.Penny Stocks To Watch Under $3
- Flower One Holdings Inc. (OTC: FLOOF)
- Ambev S.A. (NYSE: ABEV)
- Eros STX Global Corporation (NYSE: ESGC)
It does not seem like any specific news is impacting the stock price of Flower One Holdings Inc., however, there is a lot of bullish interest in FLOOF stock right now. Before we discuss why this is happening, let’s talk about what the company does.
Flower One Holdings is a cannabis company working on cultivating and producing marijuana for recreational and medical markets in Nevada. The company owns and operates a 400,000 square-foot greenhouse for the production of its marijuana products. It also owns a large production facility, and an indoor cultivation and commercial kitchen. To understand why FLOOF stock is seeing heightened momentum, we should look at what the company has been doing recently.[Read More] Top Tech Penny Stocks to Buy This Year? One Up 102% YTD
Flower One completed its restructuring transaction earlier this month. This completed restructuring has allowed for a few things to happen. One way it is embarking on this is through the shifting of its capital structure. By reducing its debt obligations, Flower One will be able to improve its cash flow. This is always a positive for investors to consider as it could help the company to post a better balance sheet in the future.
“The Company is continuing on its upward trajectory and is looking forward to the coming months especially with Nevada’s announced plans to fully reopen on June 1st, which should further power the state’s recently reported record cannabis sales.”President and Interim CEO of Flower One, Kellen O’Keefe
Based on all of this information, will you add FLOOF stock to your watchlist?2. Ambev S.A. (NYSE: ABEV)
With the economy opening up, investors are searching for companies that could correspondingly benefit. Traders and analysts refer to these companies as “reopening stocks”. Ambev is a great example of a reopening stock that could see more momentum as restrictions continue to loosen globally.
Ambev produces beer, soft drinks, tea, and a variety of other beverage products. If you’ve ever had a soda or enjoyed a beer, you probably are familiar with its products. Some of its brands include Pepsi, Budweiser, Lipton, Bud Light, Extra, and many more. Due to increased alcohol purchases from liquor stores and supermarkets as a result of stay-at-home orders, Ambev has advanced greatly during the pandemic.
The beverage market can be highly resilient during times of economic turmoil. This is especially true for penny stocks in the alcohol business. If we look at the Great Depression, we see that the demand for alcohol was extremely high. This was true despite the public having little to no money to spend on it.
Although we are not in a depression, hard times tend to correlate with increased alcohol sales. That demand is growing once again as bars, clubs, and restaurants reopen nationwide and around the world. With the growth of the beverage industry occurring with restrictions loosening, ABEV is a reopening penny stock to watch.3. Eros STX Global Corporation (NYSE: ESGC)
Eros STX Global Corporation is an entertainment company that produces, markets, and distributes content. Its entertainment content is made up of films, TV programming, and digital content across a variety of platforms. One of its newer products, Eros Now, is a subscription-based OTT platform. Eros STX has a lot of recent developments that could be driving its stock price upwards.
Most of its recent updates are attributed to acquiring movie and television rights. For example, on April 27th Eros announced that STXfilms acquired the rights to game1’s sports drama National Champions. National Champions is set to star Academy Award winner J.K. Simmons and Golden Globe nominee Stephan James. 6 days before this, the company acquired the psychological thriller “The Marsh King’s Daughter” from Black Bear & Anonymous Content.[Read More] Hot Penny Stocks to Watch; Is it Time to Buy The Biotech Dip?
Not all of this recent momentum is due solely to acquiring rights. Eros STX also freshly signed director F. Gary Gray to help produce the action-comedy “Muscle” that is set to star Vin Diesel. This could be a large project due to Diesel’s popularity, who has starred in some of the highest-grossing movies in history. With this announcement and the news of the ‘National Champions’ project, ESGC stock has increased in popularity. For these reasons, ESGC stock could be worth putting on your penny stock watchlist.