The end of May has been more favorable for stock investors, with major stock indexes rebounding while the OTC stocks index continuing its uptrend. The OTCXQ Composite is fluctuating close to its all-time high near 1,600.
The economic recovery and strong distribution of COVID vaccines are favoring the bullish stance, but inflation fears are capping the uptrend. Higher-than-expected consumer prices might force the Federal Reserve to increase the interest rates, which would negatively affect investments and encourage savings.
Meanwhile, the US and China are back discussing with each other about trade after Joe Biden became the new US president at the end of last year.
This is a great time to invest in OTC stocks, as the US and the global economy is gradually recovering from the devastating impact of the COVID-19 pandemic, and the earnings season is only starting.
With blue chips, you can’t generate huge substantial returns given that their massive market cap. One option would be to employ leverage, but it is risky, and there are few brokers and trading instruments that allow leverage on major stocks.
The good news is that there are OTC stocks with robust fundamentals that are trading at bargain prices, and we’re here to bring them to light.
Generally speaking, trading OTC stocks is much easier than getting exposure to blue chips. You don’t need a big account, and it’s technically extremely easy to make the first steps. All you need is a laptop and a brokerage account.
Nevertheless, you should keep in mind that small-cap stocks are subject to enormous volatility like what we have witnessed in the February-April period.
Also, remember these two important points when it comes to investing in small caps.
- Buy low and sell high.
- Don’t be afraid to book profits.
However, don’t rush to book profits too early.
Finding the right balance is not that difficult if you’re not getting too greedy and stay disciplined.
If you watch the Insider Financial YouTube channel, you can get a sense of the ideal time to book profits. We warned our subscribers not to get greedy or get caught up in the diamond hands/paper hands BS.
The key to trading small caps is finding 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.
For example, we reported on CBD of Denver Inc (OTC PINK: CBDD) before the stock surged in mid-February. Today, we’ll discuss CBDD along with three other OTC stocks, including GRILLiT Inc (OTC PINK: GRLT), KYN Capital Group Inc (OTC: KYNC), and VirExit Technologies Inc (OTC PINK: VXIT).
We recommend you own a portfolio of small-cap stocks. For some that can be as many as 10 to 20 or more OTC stocks.
Obviously, our recommendation to build a portfolio means that day trading is not an option for us. Day trading doesn’t suit our personality, and we don’t like the intraday moves markets make. We have found we made more money being patient and ignoring the day-to-day noise of the markets.
We always alert our subscribers first before we publish for our regular readers. This is the value of having a subscription to Insider Financial, which you can sign up for here.
Here are the 4 OTC stocks on the move right now:
OTC Stocks to Watch #1 CBDD
CBD of Denver Inc. has been bullish during the last five days, gaining over 33% to the current level of $0.015. On larger timeframes, the OTC stock is still trading sideways since last November, but the company has robust fundamentals that could propel its price to new highs. CBDD peaked in mid-February at over 3 cents, and we shared our bullish case scenario well before that.
CBDD develops and markets cannabidiol (CBD) products. It is involved in the research, development, and distribution of premium hemp extract products.
The company has production facilities and commercialization channels in the US and Switzerland. In Europe, it operates through its subsidiaries Rockflowr, GmbH, and CBD Welt 24, GmbH.
At the beginning of the month, the company announced that it had generated $2.44 million in revenue in April, up 467% from $0.43 million in April 2020.
CBDD CEO Marcel Gamma commented:
“We continue to focus on accelerating sales growth, opening new distribution channels for Rockflowr, and pushing to achieve our most important priority milestone – becoming a fully reporting company under US GAAP in the near future.”
Indeed, in the previous years, the company was poorly managed and had massive debt. Today we can observe a rapidly expanding CBD firm that has great potential to establish itself as a major player in this emerging industry.
In a recent letter to shareholders, Gamma said that CBDD had no toxic debt or convertible debt. He stressed:
“Prior to current management coming in, the Company was debt ridden and poorly managed. As you can see in our financial statements, past debt has been eliminated. The Company is cash flow positive.”
He also said that CBDD wouldn’t permit any share dilution.
The company is quite dynamic and is dedicated to expanding its efforts in Europe. On Wednesday, it announced that it had started the buildout of its own extraction and washdown facility in Switzerland. Also, the ability to process two tons of flower in-house monthly lowers outsourcing costs without added expense as service can be covered through the existing workforce.
Earlier this week, CBDD also announced that it signed a contract with one of the largest Swiss producers of premium CBD flowers. The company’s subsidiary Rockflowr will take over all of the producer’s wholesale clients. Gamma said:
“This contract will help us meet increasing demand while setting the stage for accelerated revenue growth.”
All in all, there are a lot of interesting things happening to CBDD, and the next few weeks will likely be bullish for the OTC stock price.
— A10-Vet (@A10_Vet) May 20, 2021
OTC Stocks to Watch #2 GRLT
GRILLiT, Inc. is a small company that is still in development and has some great potential to thrive as the economy is recovering from the devastating impact of the COVID pandemic. The OTC stock is now trading at $0.0023, up almost 100% from last week.
GRLT is an early-stage development company that operates a chain of fast-casual dining restaurants under the GRILLiT brand. It specializes in salads, rice bowls, grilled chicken, steak, and shrimp. The company also franchises restaurants in Florida, Tennessee, Texas, Colorado, and Nevada. The company also operates three other brands, including The Pretzel Haus, The Chicken Haus, and Bessemer Brewery.
Investors can buy this OTC stock now at a cheap price, as GRLT is looking to expand and open some new restaurants and stores that could increase revenue. The company is currently looking for locations to launch its first Pretzel Haus in the Tampa market. The announcement for a Grand Opening should come in the next few days. Another announcement of a Grand Opening should come by July.
The Twitter community is trying to guess one of the potential locations.
$GRLT Location at 2655 E Lake Rd. in Palm Harbor, FL does look like it will get the visibility they want. Google shows Dunkin and a Domino's pizza in there. Dominoes may have taken Marco's Pizza. Metro PCS used to be in the "For Lease" spot. My guess is that is their location. https://t.co/RayN9qk4z5 pic.twitter.com/t8Sb6PGSw9
— Kyle (@Meeshkyle) May 25, 2021
Meanwhile, the trading volume accompanying the bullish trend hit 908 million shares on May 26, which is an all-time record. We think that you should keep an eye on this OTC stock as it’s still very cheap.
OTC Stocks to Watch #3 KYNC
KYN Capital Group, Inc. is a riskier bet compared to other OTC stocks from this list, but it can prove to be the most lucrative pick since the company is only starting its upgraded business. The penny stock is now trading at $0.016, peaking at over $0.017 earlier this month.
KYNC was previously known as New Taohuayuan Culture Tourism Co. and used to provide capital finance leasing services for cars and trucks, construction equipment and tools, and earth moving equipment. However, recently, the company rebranded and has been re-positioned to be a holding company for acquisitions and development in the entertainment, blockchain, cryptocurrency, NFT (Non-Fungible Token), and touchless payment markets.
The cryptocurrency market has demonstrated rapid growth in the first half of the year, despite the recent slump from mid-May. Elsewhere, crypto art and other NFT-related sub-sectors are still doing great even though volumes dropped from their all-time high touched in March.
Last month, the company paid the application fee to OTC Markets and was waiting for approval to update the company profile and share the financials and disclosures for last year and Q1 2021. The stock still goes with the Yield Sign, meaning that it had posted limited financial information. Meanwhile, the website is still not live.
On Tuesday, May 25, KYNC announced the retirement of 400 million unrestricted shares to the company treasury. This share reduction expects to be completed at the company transfer agent this week. KYNC said that the OTC Markets would reflect the change in the near term. The company CEO Rick Wilson stated:
“We are very excited to be in the final steps to getting current on OTC. A third-party entity agreed to retire the 400 million unrestricted shares. The ability to retire 400 million free trading shares from the company float is a great step for KYNC. We are looking forward to updating our shareholders regarding our business development at KYNC very soon.”
KYNC is tapping into a huge market and is making its first steps, which translates into great opportunities for investors.
OTC Stocks to Watch #4 VXIT
The share price of VirExit Technologies, Inc. has been correcting, but it’s still in bullish mode judging by larger timeframes. The OTC stock is now trading at about $0.038, down from monthly high at over 4 cents. VXIT hit 10 cents in mid-February, which remains the highest level since the end of 2018.
The VirExit brand produces and promotes innovative, effective, ethical, and safe products within the antiviral space. The company runs several subsidiaries, including Sun Ovens International, Lexian Products, and My Power Solutions, among others.
The company was previously known as Poverty Dignified and some investors are still monitoring it under the PVDG ticker.
In 2020, VXIT acquired Safer Place Technologies, LLC, whose goal is to create a primary sales and marketing platform. The company is about to launch its Safer Place Marketplace soon for businesses and consumers. It will sell safety, hygiene, and sanitization products.
Also last year, VXIT established Lexian Products, which creates a series of UV-C-based devices that operate by optically diffusing energy over a specified area to destroy viruses and bacteria in less than a second.
Last week, VXIT partnered with Pure Beauty By Lorina to carry a variety of custom boutique-style health and wellness products on its soon-to-launch Safer Place Market.
The fact that VXIT has several new businesses and has found its niche, which is especially relevant during the COVID-19 pandemic, makes it a good OTC stock to own. Earlier this month, the company added two new strategic advisors who have years of experience in entrepreneurship.
The Final Note
Today is a great opportunity to benefit from the stock market’s bullishness and invest in OTC stocks with great potential during a reviving economy. Our job is to identify the best OTC stock options with strong fundamentals and let our subscribers pick the ones they like to build a well-diversified portfolio oriented at penny stocks.
If you like any of these 4 OTC stocks, 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 penny stock market.
Still, whenever an OTC stock is in the middle of a bull run, we recommend our subscribers to benefit from the growing momentum by booking some profits. No one ever went broke taking a profit.
It’s very important to consider OTC stocks that have room for growth and haven’t run yet. 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 OTC stocks to succeed in order to have a lucrative portfolio.
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.