On Tuesday, NASDAQ updated the record high, driven by improving investor sentiment. Recently, the FDA’s full approval of Pfizer’s COVID-19 vaccine, which has been used for less than a year, raised hopes of a quicker economic recovery.
Despite the surging number of COVID-19 cases caused by the Delta variant, economists don’t expect full-scale lockdowns as the ones implemented last year. The stock market has also been boosted by a strong earnings season and hopes that the Fed would keep its ultra-loose monetary policy tone.
Lauren Goodwin, economist and portfolio strategist at New York Life Investments, told Reuters:
“The market can continue to grind higher as long as earnings momentum continues to build. It accurately reflects the balance of risks that investors see right now. Despite some of the building concerns around Delta variant, the base case for many investors is that it will slow, not derail the economy.”
A rally in US-listed Chinese technology stocks contributed to the increase of NASDAQ. In the present article, we’ll discuss two Chinese companies listed on the tech-oriented stock exchange.
FINDING OPPORTUNITIES IN BIG BOARD PENNY STOCKS
There are plenty of opportunities for investors if they follow us here at Insider Financial.
The key to trading stocks is finding the momentum BEFORE it happens and then be patient. Now, when we say that we find momentum BEFORE it happens, we are investors looking to position our subscribers BEFORE the move happens.
It’s also best to own a portfolio of hot stocks. For some that can be as many as 10 to 20 or more hot stocks that include both OTC stocks and NASDAQ penny stocks.
We alert our subscribers with our best ideas before our regular readers. This is the value of having a subscription to Insider Financial, which you can sign up for here.
The fact is that there is always a bull market somewhere. That’s why it’s important for penny stock investors to trade both OTC and NASDAQ stocks, and sometimes get exposure to larger companies that still seem to have massive growth potential. There are always opportunities if you give yourself the flexibility to trade all markets.
In this article, we take a look at 4 big board penny stocks, of which 3 are listed on NASDAQ and one is traded on the NYSE American. They are China Liberal Education Holdings Limited (NASDAQ: CLEU), Kaixin Auto Holdings (NASDAQ: KXIN), Pixelworks Inc (NASDAQ: PXLW), and Senseonics Holdings Inc (NYSE American: SENS).
Big Board Penny Stocks #1 CLEU
China Liberal Education Holdings Limited has managed to bounce back from the August low at $1.79, which is the lowest level since the company was listed on NASDAQ last year. The share price has surged over 50% during the last five days, which is a significant return for a $34 million company. Currently, CLEU is trading at $2.70, failing to break above the psychological level of $3. The penny stock started the year at over $5 and hit a YTD high at over $7.4 a share.
CLEU, which is based in Beijing, provides educational services and products under the China Liberal brand name in mainland China. The company offers Sino-foreign jointly managed and delivered academic programs, including undergraduate and postgraduate education, as well as diploma and non-degree higher education, and senior secondary education programs in the areas of languages, liberal arts, and businesses.
The company also provides overseas study consulting and technology consulting services for Chinese universities to improve their campus data management system and optimize their teaching, operating, and management environment. The company’s consulting services include campus intranet solution build-out, school management software customization, smart devices, installation and testing, and school management data collection and analysis.
On top of that, CLEU develops and delivers textbooks and other course materials to students enrolled under the Sino-foreign Jointly Managed Academic Programs, as well as offers job readiness training to graduating students.
At the beginning of July CLEU extended its non-binding letter of intent (LOI) to acquire Wanzhong Education Investment Management Co Ltd, driving the share price lower. The company plans to buy 100% of the issued and outstanding shares of Wanzhong from its sole shareholder, to be paid in cash and ordinary shares with a total value of $53.9 million. Wanzhong operates an independent three-year college and a four-year college and generates annual revenue of about $15.3 million. China Liberal’s cash and equivalents totaled $5.01 million at the beginning of the year, so the acquisition should rely on the transfer of ordinary shares.
Last month, CLEU added two new members to its Board and secured some strategic partnerships.
All in all, CLEU seems to have bottomed out, as it has been heavily shorted in the previous weeks. There is short squeeze potential in CLEU, especially if the Reddit Rebellion discovers this Big Board penny stock.
Big Board Penny Stocks #2 KXIN
Kaixin Auto Holdings is another China-based company that is listed on NASDAQ. The company started to surge on August 6 after it had decided to establish a new energy vehicle (EV) business unit, which will quickly build up EV R&D, production, and marketing teams. The share price jumped almost 90% on that day alone peaking above $3.40, which was the highest level since mid-July when the penny stock hit its YTD high at $4.80. Now KXIN is trading at $3.36 after gaining about 7% during the last five days.
Kaixin’s strategic move comes at a time when the Chinese government provides generous support for the accelerated development of EVs and amid the rapid growth of the EV market in China. New electric vehicles are expected to become the mainstream consumer model in the auto industry.
KXIN said that it has already been engaged in negotiations of mergers and acquisitions with a number of EV manufacturers. The company will unveil more details about the potential M&A deal as soon as possible.
Kaixin has big goals and great ambitions. It wants to become another player in the EV industry following the success of Nio and Xpeng, both of which currently trade near $40 per share after starting below $20 in 2020.
Shortly after announcing its EV plans, Kaixin said that its new unit had launched development plans focused on smaller EV models in the subcompact and mini-compact categories. The team found out that there was a rise of the younger generation of consumers in Chinese cities, who carry a preference for vehicles of lighter weight and smaller size, which has caused smaller size EVs to be a rarity in the local auto market. Sales of subcompact and mini-compact electric cars are forecasted to reach 5 million units in 2025, making it one of the best-selling models in the Chinese auto market.
KXIN has great potential thanks to its new unit and getting exposure to this Big Board penny stock is a smart play as the stock has a history of explosive moves.
Big Board Penny Stocks #3 PXLW
Pixelworks, Inc, based in California, has been on the rise. The NASDAQ-listed stock has increased by 80% during the last five days and over 100% since the end of July, currently trading at $5.63. Earlier on Tuesday, the penny stock peaked at $6, which is the highest level since January 2018. Prior to this, the stock used to find strong resistance and $4 and maintained near $3 for most of the year.
Pixelworks provides video and pixel processing semiconductors and software. In addition, the $300+ million company also provides digital displays, projection devices, and digital signage.
Last week, PXLW announced that the iQOO 8 series smartphone from iQOO brand of vivo, which recently launched in China, incorporated the Pixelworks X5 Pro visual processor. The high-end iQOO 8 series plans to boost its ultra-premium display performance to a higher level, following the recent success of vivo’s iQOO Neo5.
One of the highlights of the new smartphone is its absolute color accuracy. Every iQOO 8/8 Pro unit is factory-tuned with patented display calibration technology by Pixelworks, resulting in great color accuracy, meaning that no deviations from perfect color reproduction can be detected by the human eye.
PXLW’s mobile solutions include a portfolio of display processors, which include i3, X5, X5 Pro, i6, and i6 Pro.
Earlier this month, PXLW reported a quarterly loss of $0.05 per share versus the estimated loss of $0.07. This compares to a loss of $0.10 per share in Q2 2020. The company reported revenues of $14.05 million for the quarter ended June 2021, which is slightly better than the consensus forecast and compared to Q2 2020 revenues of $9.25 million.
During the quarter, ASUS launched Zenfone 8 and Zenfone 8 Flip flagship smartphones that incorporate Pixelworks’ leading color calibration, DC Dimming, and HDR tone mapping technology. Projector revenue rose over 100% sequentially and 30% year-over-year, pointing to a recovery in customer and end-market demand.
Meanwhile, the company announced a strategic plan to transform Pixelworks’ Shanghai subsidiary from an R&D center into a profit center for the Mobile, Projector, and Video Delivery businesses, including the positioning of that subsidiary to qualify and seek an IPO on the STAR Market in China.
Even though PXLW is still unprofitable, the company has a healthy balance sheet and a bright future, given the surging demand for its mobile products. This Big Board penny stock has strong fundamentals as it aims for the $10 mark sooner than later.
Big Board Penny Stocks #4 SENS
Senseonics Holdings, Inc has been gradually accelerating its bullish trend, gaining over 16% during the last five days and since the beginning of August. The penny stock, which is listed on NYSE American, is currently trading at $3.54 after hitting a swing high at $3.67, which is the highest level since the beginning of July. The share price has been quite stable during the last five months, trading within a range between $2 and $4. Last year, SENS used to trade below 40 cents in December, and it exploded to a YTD high in February at over $5.25, following an increased social media activity from retail investors.
The $2 billion company produces and sells continuous glucose monitoring (CGM) systems for people with diabetes in the US, Europe, the Middle East, and Africa. The line of products includes Eversense and Eversense XL, which are implantable CGM systems to measure glucose levels in people with diabetes through an under-the-skin sensor, a removable and rechargeable smart transmitter, and a convenient app for real-time diabetes monitoring and management for a period of up to 90 and 180 days. It serves healthcare providers and patients through a network of distributors and strategic fulfillment partners.
Earlier in August, SENS released its quarterly results, reporting Q2 revenue of $3.3 million, up from 0.26 million generated in the same period last year. Q2 2021 gross profit rose $1.54 million y/y, to $0.39 million.
The net loss was $180.32 million, or $0.42 per share, compared to $7.52 million, or $0.03 per share, in Q2 2020. As of June 30, 2021, cash, cash equivalents, short and long-term investments were $215.0 million and outstanding indebtedness was $109.9 million.
SENS expects that global net revenue for the full year will be in the range of $12.0 million to $15.0 million.
Meanwhile, the FDA continues to review the Eversense 180-day PMA supplement application.
SENS has a great product but its status as a meme stock comes with certain risks. Also, last year, the company amassed cash after a series of stock offerings that have almost doubled the number of shares. Still, it’s worth keeping an eye on this penny stock, especially if the FDA gives it the green light for the Eversense product.
THE FINAL NOTE
Now is a great opportunity to invest in hot stocks with great potential during a reviving economy. Our job is to identify the best stock alerts with strong fundamentals and let our subscribers pick the ones they like to build a well-diversified portfolio oriented at penny stocks.
The 4 Big Board penny stocks discussed today are on the rise and are good stocks to hold. Nevertheless, our best advice is to be patient and enter the market during corrections. Buying dips and selling rips as swing trades remains the best strategy in the stock market. Still, whenever a hot stock is in the middle of a bull run, we recommend our subscribers to book profits.
It’s very important to eye penny stocks that have room for growth and have yet to make their explosive move. There are plenty of opportunities, and we take our time to monitor hundreds of penny stocks to buy each week, trying to find the best alerts for our subscribers.
Remember, all you need is one or two hot stocks to run in order to crush the market averages.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.