The US economy continues to recover and GDP growth for Q2 is likely to be revised higher following a series of better than expected data. The acceleration reflects the economy’s reopening amid improved public health.
The Commerce Department’s quarterly services survey showed on Thursday that data such as retail sales and inventories suggested that GDP grew much faster than the 6.5% annualized rate reported by the government in its preliminary report in July.
Daniel Silver, an economist at JPMorgan, told Reuters:
“We think these components will be revised up slightly in the BEA’s upcoming GDP release as a result of the QSS data.”
However, an increase in COVID cases caused by the Delta variant poses a risk, although economists don’t expect full lockdowns.
Ryan Sweet, a senior economist at Moody’s Analytics, said:
“This wave of COVID-19 cases in the U.S. will likely have less economic cost. A number of the high-frequency measures that we monitor have softened a little, but nothing that raises a red flag.”
All in all, this is a great time to invest in stocks, especially in penny stocks that provide great return opportunities.
FINDING OPPORTUNITIES IN HOT 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.
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 hot penny stocks, of which one is listed on NASDAQ. They are MedMen Enterprises Inc (OTCQX: MMNFF), Netlist Inc (OTCQB: NLST), PharmaCyte Biotech (NASDAQ: PMCB), and Stevia Corp (OTCPK: STEV).
Hot Penny Stocks #1 MMNFF
MedMen Enterprises Inc. has had a bullish attempt earlier this week, and it still maintains the optimistic tone. The share price spiked from $0.27 late on Tuesday to a swing high at $0.39, which is the highest since mid-May. Earlier this year, the OTC stock broke above the $1 dollar mark for a short period in mid-February.
MMNFF is a $216 million penny stock exempt company that is operating as a cannabis retailer with operations across the US and flagship stores in Los Angeles, Las Vegas, and New York.
The share price rose following two major announcements that came relatively at the same time.
On Tuesday, Canadian pharmaceutical and cannabis company Tilray and other investors acquired 75% of MMNFF’s outstanding secured convertible notes from Gotham Green Partners and 65% of its outstanding warrants for a total sum of $165.8 million. Once converted into stock, Tilray will end up with a minority stake in MMNFF.
Tilray expects that if or when cannabis is legalized at the federal level in the US, its interest in MMNFF would help it establish a foothold in the US market.
Tilray’s chairman and CEO Irwin Simon told CNBC:
“What Medmen does for Tilray is that it gives us a great brand. Ultimately, once legalization happens, it gives us the potential to own a great company that we can ultimately take into the rest of the world.”
On the same day, MMNFF announced that investors, led by Serruya Private Equity, were purchasing $100 million of units of Medmen at a price of $0.24 per unit in a Private Placement deal. Certain investors associated with SPE agreed to backstop the $100 million to be raised in the Private Placement (the Backstop Commitment). The funds will enable MedMen to expand its operations in key markets such as California, Florida, Illinois and Massachusetts and identify and accelerate further growth opportunities across the US.
MMNFF CEO Tom Lynch said:
“This US$100 million investment is a game-changer for our Company, strengthening our balance sheet and creating a platform for our future growth. This transaction gives us the flexibility and firepower to match our revenue trajectory to our operational expertise and internationally renowned brand. MedMen 2.0 is here, and we are thrilled to embark on the next stage of our journey.”
Even though MMNFF has experienced losses in recent years, the company is redefining itself, and major investors seem to be confident about it. Despite the correction following the Tuesday spike, MMNFF is a great long-term investment.
Hot Penny Stocks #2 NLST
Netlist, Inc is another penny stock exempt company trading on the OTC markets. In fact, it was listed on NASDAQ until 2018. The stock is currently trading at $6.90, up 6% during the last five days but down about 20% since the end of July, when NLST hit a record high at $9.75, taking many investors by surprise.
We had shared our bullish stance on NLST since no later than March, when the stock was trading below $2, and many of our subscribers have already comfortably taken some profits on this stock.
Can it update the record high? It surely can, but it remains to be seen if the potential uptrend is sustainable.
The $1.5 billion company provides high-performance SSDs and modular memory subsystems to enterprise customers in diverse industries. HybriDIMM is Netlist’s next-generation storage class memory product – it addresses the growing need for real-time analytics in Big Data applications, in-memory databases, high-performance computing, and advanced data storage solutions.
Netlist also produces specialty and legacy memory products to storage customers, appliance customers, system builders and cloud and datacenter customers. It’s important to stress that the company holds a portfolio of patents in the areas of server memory, hybrid memory, storage class memory, rank multiplication, and load reduction.
Actually, the latest bull run is all about patents. In 2009, the company filed a patent infringement suit in federal court in San Francisco against Google. Netlist alleged that Google’s computer servers infringe its patent for a memory module that increases capacity and improves energy efficiency. After about 12 years of battles in the legal system, Netlist finally can proceed with its patent litigation against the search engine giant.
In 2020, the US Court of Appeals for the Federal Circuit affirmed the US Patent Trial and Appeal Board’s decision upholding the validity of Netlist’s US 7,619,912 (‘912) patent that applies to DDR server memory modules. The decision is final and binding on future cases, which may help the company monetize its product. The share price is gradually increasing amid expectations that NLST will reach a settlement with Google, though no one knows how much Alphabet will pay and if it will agree to settle at all. Earlier this year, Netlist also sued SK Hynix for patent infringement and received $40 million to settle all litigations. In fact, the settlement with Hynix is what turned investors’ attention to the old legal battle with Google. Some even went as far as to create a website dedicated to this situation.
Despite the apparent imminent success of NLST, it seems that some insiders are turning their back on the company. In July, the management has sold millions worth of stock, according to the Form 4 disclosures. It turns out that Google has some legal base to limit the patent infringement timeframe to a very short period and thus minimize the size of recoveries paid to NLST. Anyway, the court’s final decision will make the difference.
$NLST Two very big catalyst today that will start running tomorrow. The first is a great article by seeking alpha talking about how the Google lawsuit will be the lawsuit of the century. 10B in settlements will put us at approx $40 pps! Currently 7shttps://t.co/gHs0ibuOb8
— Jmav (@Jmav8888) August 19, 2021
Meanwhile, NLST released its financial results at the beginning of August. Revenue for Q2 ended July 3, 2021 hit a record $64.4 million, with $40 million in licensing fees (from Hynix) and $24.4 million in product revenue which was up 123% q/q.
Net income for Q2 was $27.8 million, or earnings per basic share of $0.13, compared to a net loss of $1.8 million in the previous year.
You should definitely watch the dispute between NLST and Google because this can turn into a deal worth billions.
Hot Penny Stocks #3 PMCB
PharmaCyte Biotech is one of the penny stocks listed on NASDAQ. This stock has grabbed investors’ attention, but our job is to dig deeper and see whether it’s worth your money. Kind of a spoiler: you should be very cautious when investing in this stock and implement strict money management techniques.
Earlier this week, PMCB surged from $2.8 late on Tuesday to as high as $9.85 on Wednesday, but the share price suddenly corrected to the current level of $3.50. The larger timeframes show a depressing picture for PMCB. On August 12, it actually touched the lowest level on record at $2.28, after many years of correction from the all-time high at above $700 per share touched in 2014, when the new management came in.
PharmaCyte promotes itself as a clinical stage biotech firm that develops therapies for cancer and diabetes based upon a proprietary cellulose-based live cell encapsulation technology known as “Cell-in-a-Box.” This technology will be used as a platform upon which therapies for several types of cancer and diabetes are being developed.
For cancer, the therapy involves encapsulating genetically engineered human cells that convert the prodrug ifosfamide from its inactive form to its “cancer” killing form. For diabetes, PMCB is developing a treatment for Type 1 diabetes and insulin-dependent Type 2 diabetes. The company plans to encapsulate a human cell line that has been genetically engineered to produce, store and release insulin in response to the levels of blood sugar in the human body.
Last week, PMCB got listed on NASDAQ. For this, it implemented a 1-for-1,500 reverse stock split on July 12, leaving the company with only 1.6 million issued and outstanding shares, down from 2.4 billion. However, the red flag that we’re concerned with is that the number of authorized shares exceeds 33 million, which is about 20 times more than the current supply of floating shares. Some investors are worried about the potential dilution that is possible due to such a share structure.
However, this might be the bottom considering that PMCB is starting another chapter. At the end of last year, the company formed a team of experts to work through the US FDA’s clinical hold requests in order to achieve an open Investigational New Drug Application, CEO Kenneth Waggoner said. He added:
“Our current focus is to comply with the FDA’s requests as soon as possible. When we make significant progress towards that goal, we will advise our shareholders and the investment community.”
On August 19, the company said that it had entered into definitive agreements with institutional investors for the purchase and sale, in a registered direct offering priced at the market under Nasdaq rules, of 14,000,000 shares of its common stock (or common stock equivalents) at a price of $5.00 per share for gross proceeds of $70 million. The company has also agreed to issue to the investors unregistered warrants to purchase up to an aggregate 7,000,000 shares of common stock.
PharmaCyte plans to use the funds to complete activities requested by the FDA to address the FDA’s clinical hold on its Investigational New Drug application (IND) with respect to PMCB’s planned Phase 2b clinical trial in locally advanced, inoperable, pancreatic cancer (LAPC), including conducting several additional preclinical studies and assays and providing the FDA with the additional information it requested.
With the dilution risk and a previous denial from the FDA, it’s difficult to be 100% confident about PMCB, especially when the stock was suspected of acting as a pump and dump about six years ago under the current management. On the other side, PMCB is listed on NASDAQ and has to comply with more rigorous rules that require it to be transparent. It may happen that this may be the bottom indeed. You can stick to the wait-and-see mode for now.
Hot Penny Stocks #4 STEV
Stevia Corp has surged during the last few days as the company is seeking to become Pink Current, and we like these kinds of stocks. STEV has surged over 290% during the last five days and about 500% during the last month. The OTC stock is currently trading at $0.018 after hitting a swing high at $0.0267 on Thursday.
Stevia is a farm management company and healthcare company focused on the commercial development of products that support a healthy lifestyle, including stevia and hemp and their compounds.
On Monday, the company said that its OTCIQ application had been approved by OTC Markets, which will allow it to start uploading financial statements and disclosure documents at OTC Markets. The company is working on filing all necessary financial and disclosure documents by August 31, 2021.
Stevia President Kenneth Maciora commented:
“I would personally like to thank George Blankenbaker and Thomas Ong for all their hard work on behalf of Stevia Corp. Both have resigned from all their positions at Stevia Corp. and hold no other officer, director or consultant positions at Stevia Corp. Dr. Jerry Smartt, a very well respected and practicing neurologist in the State of Indiana has remained on the board.”
Blankenbaker’s resignation is especially relevant, given that earlier this month it was announced that he had pleaded guilty in April to two counts of federal wire fraud and one count of money laundering. At the end of July, Judge Sarah Evans Barker also ordered him to three years of supervised release and pay $1.5 million in restitution.
With his resignation, STEV will likely have the “Prohibited Service Provider” badge removed from its OTC Markets page.
Meanwhile, the company announced this week that it had settled $1,250,000 principal amount of a toxic senior convertible debenture for 37,500,000 restricted shares. The company has estimated that the principal amount, unpaid interest, and late fees that were owed to the institutional investor were in excess of $3,000,000. The settlement document contains no adjustments or typical true-up terms, and the settlement is firm pursuant to the issuance of 37,500,000 restricted shares.
$STEV News getting found!!
Eliminated tons of debt at .08- And have OTCIQ access…. 2 PR’s this week and expect more news to follow. No one turns over $3 mil in debt in exchange for shares at .08 without being confident. https://t.co/cXHt2CZKzu pic.twitter.com/EczFelx86l
— TheFameMonster (@Famemonster1990) August 19, 2021
Now the company is almost debt-free and ready to go on with its business plan. We’re quite bullish on this OTC stock.
THE FINAL NOTE
Today is a great opportunity to benefit from the stock market’s bullishness and 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.
All of the 4 hot 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 hot 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 hot stocks to buy each week, trying to find the best alerts for our subscribers.
Remember, all you need is one or two hot penny stocks to succeed in order to crush the market averages.
As always, good luck to all (except the shorts)!
WHEN INSIDER FINANCIAL HAS A STOCK ALERT, IT CAN PAY TO LISTEN. AFTER ALL, OUR FREE NEWSLETTER HAS FOUND MANY TRIPLE-DIGIT WINNERS FOR OUR SUBSCRIBERS. WE SPECIALIZE IN FINDING MOMENTUM BEFORE IT HAPPENS!
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.