Chronicle Journal: Finance

4 Penny Stocks Nearing 2021 Highs But Are They A Buy Right Now?

Are These On Your List Of Penny Stocks To Buy Or Avoid?

This year is off to a roaring start, and penny stocks are partly to blame. It’s the end of January, and several factors are impacting the overall stock market. To find the best penny stocks to buy, we have to consider all of these factors.

Obviously, the main point of focus right now is the pandemic. With new variants spreading from the U.K. and South Africa, we could see further travel restrictions worldwide. But, this has also served to emphasize biotech stocks. On a brighter note, the U.S. saw the first signs of declining case numbers in over a month. In the past three weeks, case numbers have been climbing, presumably due to the impact of holiday travel and events during the New Year. Now, the combination of vaccine efforts and widespread mask requirements, means that cases could be curbed in the near future.

Lastly, we have the impact of economic stimulus in the U.S. President Biden has been working to rally support behind this large stimulus bill, with various levels of success. At $1.9 trillion, it is quite expensive and could lead to large inflation down the road. But, it seems all too necessary at the current point in time. With this information, we can see that both positives and negatives are going on in the world. With this, we see plenty of new trends taking hold in the stock market today. With that in mind, here are a few penny stocks that traders are watching this year that’ve also traded at or near new 2021 highs. 

Penny Stocks to Watch Vislink Technologies Inc. 

We’ve discussed VISL stock several times in the past few months due to a few factors. For one, VISL stock has seen several trading sessions with double-digit gains since November or so. In that time, shares of VISL have shot up by over 100%. This is a substantial gain, but not one that is unheard of with penny stocks. For some context, Vislink Technologies provides communications equipment. During the pandemic, the demand for communications solutions has become extremely high. This is due to more people than ever before being stuck at home. 

The company offers a large range of products that can be used in everything from metropolitan services to law enforcement and broadcasting. As you can see, its business is quite broad, but its operations relate to the communications industry. A few weeks ago, the company announced the launch of its IP Link 3.0 studio transmitter system known as ATSC 3.0. Sean Van, Product Manager at Vislink, states that “the ATSC advanced visual standard allows audiences to enjoy a media-rich TV broadcast system with game-changing video and audio quality improvements, as well as a pathway for exciting features like interactivity and participation.”

With this in place, Vislink further expands its capabilities. In turn, we’ve seen optimism translate in the market, with shares testing 2021 highs. Just last week, the stock reached $2.84 & on Monday, Vislink shares closed just 14 cents shy of that mark.

Penny Stocks to Watch Vislink Technologies Inc VISL Stock ChartNeos Therapeutics Inc. 

On Monday, another decent gainer of the day was NEOS stock, pulling in around 8% by EOD and into after hours. In the past month, shares of NEOS have shot up by over 30% and since mid-October, by almost 90%. The pharmaceutical company develops treatments for ADHD. Its pipeline includes a large range of compounds that have expanded beyond ADHD into everything from cough and respiratory treatments to the treatment of chronic sialorrhea. In December of 2020, the company was acquired by Aytu Biosciences (NASDAQ: AYTU), intent on adding more ADHD drugs to its pipeline.

This is an important factor for investors to consider, as it adds a great deal of capital into Neos’ day to day operations. This means that it could theoretically continue to produce new drugs and further its research on existing compounds. Aytu states that this acquisition could help to derive growth for both companies involved.

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“This is a truly transformative transaction, elevating the newly combined company to a $100 million revenue, leading specialty pharmaceutical company positioned for what we expect to be an accelerated path to profitability, continued revenue growth and further business diversification,” said Josh Disbrow, CEO of Aytu BioScience at the time the deal was announced.

Obviously, it will take some time before the full effects of this acquisition are realized. But in the meantime, NEOS could be one of the penny stocks to watch.

Penny Stocks to Watch Neos Therapeutics Inc NEOS Stock ChartOpko Health Inc. 

Opko Health Inc. shot up by around 13% by EOD on January 25th. The big gain comes from speculation surrounding its Covid-testing. As a biotech company, Opko Health works in the testing and diagnostics niche. In the third quarter of 2020, Opko reported a sales increase of almost 90% due to Covid testing demand. Although this is exciting, the report also showed a drop in demand for its other testing products. This makes sense given the massive emphasis on fighting the pandemic. Additionally, the company posted gross margins up 33% over the second quarter of 2020. Now, obviously, this growth is exciting for the company and penny stock investors alike. 

This week, OPKO’s BioReference Laboratories announced another big development. The company signed COVID-19 testing agreements for players and officials, as well as team and league staff for the 2020-2021 seasons for the NBA and NHL. BioReference is currently supporting the Winter X Games in Aspen, U.S. Soccer’s Women’s and Men’s National Teams, and the NBA G League in Orlando.

But as intelligent traders, we have to consider what will happen after the pandemic begins to lessen in severity. While case numbers are still rising worldwide, it looks like this area of Opko’s business could ultimately see a drop in demand. For this reason, we have to explore the other area of Opko Health’s business model. The company holds claim to the drug known as Rayaldee, which produced roughly $30 million in revenue back in 2019.

Penny Stocks to Watch Opko Health Inc. (OPK Stock Chart)Titan Medical Inc.

The biggest gainer on this list comes as TMDI stock shot up by over 21% during trading on January 25th. In the past month, shares have soared by roughly 93% to its Monday price of $3.08 per share. However, this gain can be attributed to the increased attention in biotech penny stocks & recent updates.

While it isn’t working on a Covid treatment, Titan Medical produces several computer-assisted robotic surgery devices. These devices can be used in everything from invasive to standard, non-invasive procedures. Given the effects of the pandemic, the less in-person an appointment can be, the better. This means that Titan Medical could see a lasting positive effect on its demand. 

A few weeks ago, the company announced a bought deal offering worth around $10 million. The deal, which consists of around 6.41 million units of Titan Medical, should raise capital for the company to continue its current operations. Also, it could use this money to further the long term goals of its business. The offering is expected to close on or about January 29. In light of this, TMDI has continued trading higher this week. The penny stock hit not only fresh 2021 highs on Monday but also made new 52 week highs.

Penny Stocks to Watch Titan Medical Inc. (TMDI Stock Chart)Closing Thoughts On Penny Stocks

The hype fueling the market right now is unavoidable. The fact that we see places like Reddit have a heavy influence over certain companies like GameStop, for instance, shows that the average retail traders seek volatility and are open to stocks that swing wildly. In knowing this, it’s important to keep a level head. Stay focused on your plan, understand it’s okay to take profits, and if a stock continues higher after, a strong trend will have more entry opportunities later.

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