Investing in penny stocks can be a strategy that only a fearless few undertake. The main reason behind that is those investing are looking at the long term. More times than not, penny stocks are built for speed. Big swings in stock price within a day or two is the norm. This is why we usually see more day traders than investors in this market. This isn’t to say that all penny stocks aren’t worth investing in nor are all penny stocks built to actually be invested in. However, situationally, there are instances where you can find hot penny stocks to buy that end up turning into long-term holds. It all comes down to managing risk.
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As we know, the price of a stock can drastically change overnight. Things like big news updates or even filings showing a company’s raising money can trigger a big move in either direction. Because of this, penny stocks pose a higher risk to investors because it only takes a few pennies at times, to equate to a larger loss.Investing In Penny Stocks, Day Trading Penny Stocks: What’s Better?
If you were holding shares of Apple (AAPL Stock Report), for instance, and there was some bad news, it might drop $10 a share. But that $10 is “only” about 10% of its market value. On the other hand, if you were invested in a penny stock, even a 50 cent drop could make a noticeable change to the value of your holdings. I know I’m stating the obvious for some but others should be aware as well.
I don’t want to push anyone away from investing in penny stocks. But there are ways to initiate a trade, at first, and then have an opportunity to see that turn into more of an investment. Some do this by using a tier trading strategy. This approach allows traders to stay in winning trades much longer because it involves buying and selling shares as stocks go in the direction you initially expected.
For all intents and purposes for this article, when I talk about penny stocks on Robinhood, I’m simply referring to stocks listed on major exchanges. Thanks to the pandemic, millions of new traders have flocked to the market, coincidentally, at least 5 million chose Robinhood during the first 9 months of this year to place trades with. While this is one approach to turning winning trades into investments, there are plenty of other strategies. Heading into 2021, will any of these names be on your list?Hot Penny Stocks For 2021: Drive Shack Inc.
When you think about “reopening stocks” or “epicenter stocks” what comes to mind? Are you thinking about digital marketing companies or are you thinking more along the line of traditional retail? There are many definitions to explain what epicenter stocks are. The basics include companies that broke down big earlier in the year thanks to extreme COVID measures. But, According to Fundstrat’s Tom Lee, these could recover the quickest in light of a positive vaccine. Considering that right now we’re seeing that Pfizer (PFE Stock Report) and BioNTech’s (BNTX Stock Report) vaccine is now being deployed, hopes are high that the global economies might be able to get back to business sooner.
In light of this, we’ve seen an uptick in attention on companies that were hit due to social distancing measures. Drive Shack (DS Stock Report) is a familiar face that we’ve discussed for most of the second half of 2021. Most recently, DS stock surging thanks to a general timeline of the vaccine rollout. For those unfamiliar, Drive Shack is akin to the Top Golf brand that has made driving ranges blend with entertainment. Bar food, beverages, and sports on TV are some of the things you can expect.
However, heading into 2021, Drive Shack may have more in store. This includes a plan to advance growth early in the year. A new initiative that Drive Shack has implemented includes launching The Puttery and opening a New Orleans Drive Shack venue for the new year. After selling its Rancho San Joaquin California property, it had booked $34+ million to contribute to the rollout of 50+ Puttery venues by the end of 2024. With easing restrictions thanks to a vaccine, will DS stock be on your list heading into 2021?Hot Penny Stocks For 2021: Remark Holdings
Remark Holdings (MARK Stock Report) was one of the big winners during the summer this year. Speculation on the use of its tech at myriad venues including hotels and casinos sparked interest in the stock. After the dust settled, the company’s shares reset around its 50 and 200 day moving averages while Remark itself finally began opening up the dialogue with the public beyond cryptic tweets.
Specifically, last month new life was breathed into the stock after Remark reported stronger than expected earnings per share. Wall Street estimates pegged the company’s EPS at a loss per share of 4 cents. But in all actuality, Remark posted an EPS gain of 4 cents. What’s more, is that management shed some much-needed light on the direction of the company.
Much of that had more to do with the company’s AI compatibility in things like Smart Retail kiosks and other smart solutions for tracking & scanning for post-COVID indications. What’s more is that this week, the company expanded upon its offering announcing the release of its S and T Series Smart Boxes.
Kai-Shing Tao, Chairman and CEO of Remark Holdings explained that these Smart Boxes “support our AI inference cores, including facial recognition, vehicle recognition, license plate detection, gesture detection and inference, fire and smoke detection, PPE enforcement, social-distancing enforcement, and contact tracing.”
When you talk about what a “post-COVID” world looks like, these are all things that are likely to be looked for. This is especially accurate when talking about larger-scale gatherings. Does Remark stand to benefit heading into 2021?Hot Penny Stocks For 2021: Ashford Hospitality Trust
In light of potential reopening, you can’t ignore entertainment and hospitality. Hotels, casinos, entertainment venues and the like are all things to take into consideration. Earlier this ear, we put an article together: What Are Good Penny Stocks To Invest In? 5 Real Estate Stocks To Watch. In it, we highlighted some of the REIT penny stocks. These REITS managed everything from residential to commercial mortgages as well as other things like property management and other facets of real estate.
Ashford Hospitality Trust (AHT Stock Report) was one of these companies. Ashford invests in full-service upscale and upper-upscale hotel properties in the U.S. This includes operating under the Marriott, Hilton, Hyatt, Crowne Plaza, and Sheraton flags. Social distancing and lockdown measures put a cap on the momentum that leisure and hospitality companies could achieve. As we head into 2021, the chances of more travel and leisure could pick up. Companies managing locations including hotels could be in focus.
What’s more, is that Ashford has attracted some analyst interest ahead of the new year. Last week, B. Riley adjusted its price target higher to $3.50. This was a 40% boost in the AHT stock forecast. The firm maintained its Neutral rating on the stock, however. So, heading into 2021, AHT and other REITs could be on the list of penny stocks to watch as more reopening plans are decided.