The stock market has been in correction mode since the end of September, with majors indices as well as the OTCQX Composite declining to the lowest level in months. Last week, US President Joe Biden sign a bill preventing the shutdown of the federal government, but the debt ceiling remains an issue.
Meanwhile, US Treasury yields keep rising after recent data suggested increased consumer spending, accelerated factory activity, and higher inflation growth, putting more pressure on the Federal Reserve to start tightening its accommodative monetary policy sooner than expected.
The tech sector has been dragged down by blue chips like Facebook, which experienced a six-hour outage and has been dealing with the negative press because of a whistleblower.
Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, said:
“The pressure that the technology space continues to feel is because of rising interest rates. Right now people are voting with the sell tickets on shares of technology, they haven’t come down enough to warrant interest in buying the dip.”
Nevertheless, a correction made sense considering that stocks have been surging this year, reaching overbought market conditions. Despite the bearishness, there are many penny stocks starting to make waves right now.
FINDING OPPORTUNITIES IN TOP 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 penny stocks. For some that can be as many as 10 to 20 or more penny 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 penny stocks gaining traction, two of which are listed on NASDAQ. They are Farmmi, Inc (NASDAQ: FAMI), Progenity, Inc (NASDAQ: PROG), Puget Technologies, Inc (OTCPK: PUGE), and Nano Mobile Healthcare, Inc (OTCPK: VNTH).
PENNY STOCKS TO WATCH #1 FAMI
Farmmi, Inc has shown increased volatility since last week. The NASDAQ-listed stock is currently trading at $0.35, following a 70% gain from last Monday. Still, larger timeframes point to a long-term bearish trend, with the penny stock tumbling to the lowest level on record on September 23 right below 20 cents. Since May, the price has faced strong resistance near $0.40, so if it manages to consolidate above it, you can be ready for longer-term recovery.
FAMI is a Chinese company that acts as an agricultural products supplier, processor, and retailer of Shiitake mushrooms, Mu Er mushrooms, other edible fungi, and other agricultural products.
In mid-September, the share price tumbled from $0.57, the highest since June, to $0.25 in a matter of days following the announcement that FAMI intended to offer in an underwritten public offering ordinary shares and pre-funded warrants to purchase ordinary shares. The company said the net proceeds would be used for general corporate and working capital needs and capital expenditures. A few days later, FAMI said it had completed the deal with gross proceeds expected to be about $81 million, before deducting underwriting discounts and commissions and other estimated expenses payable by the company. The offering included 368+ million of FAMI’s ordinary shares and pre-funded warrants to purchase ordinary shares. The ordinary shares were offered at a price of $0.22 per share.
After the public offering, the share price has recovered on record volumes, suggesting a potential reversal of the bearish trend. We think FAMI has much room for growth, considering that it started in 2018 at $10 and is now expanding operations. In the latest shareholder update that came last week, the company said:
“We are in an even stronger position today than at any time in our history, with improved financial results, a broader product line, an even stronger balance sheet, and significantly more meaningful long-term growth opportunities. Our capital raises in 2021 have provided the momentum we needed to reach many of the goals we have set for the near term. While we are encouraged by Farmmi’s prior achievements, we are even more excited about the future as we enter a new phase of accelerating growth.”
FAMI listed some of the steps the company was taking to create greater value:
- Acquisition of Jiangxi Xiangbo Agriculture and Forestry Development Co., Ltd. (Xiangbo) – FAMI agreed to acquire all the shares of Xiangbo for approximately RMB 70 million ($11 million) amid expansion towards forest-related business. Xiangbo’s subsidiary, Yudu County Yada Forestry Co., Ltd. owns 1,4438.5 mu of economic forest in Yudu County, Ganzhou City, Jiangxi Province. Xiangbo primarily uses its acreage in the cultivation and production of Moso Bamboo, Camellia Oleifera, and Chinese Fir trees.
- Expansion of Health and Wellness Business – last month, FAMI established four new subsidiaries: Zhejiang Yitang Medical Service Co., Ltd., Zhejiang Yiting Medical Technology Co., Ltd., Farmmi (Hangzhou) Health Development Co., Ltd., and Zhejiang Farmmi Healthcare Technology Co., Ltd. The company expects these new subsidiaries to play an important role in its growth as it accelerates development of its new health and wellness business.
Meanwhile, at the end of September, FAMI released several positive updates, saying that it had won an additional multi-product order for export to Israel and another product order for export to Southwest Asia.
We believe FAMI is undervalued for a profitable business that is generating tens of millions in revenue and looking to expand. We also like about 7% of the company is held by institutional investors.
PENNY STOCKS TO WATCH #2 PROG
Progenity, Inc is another NASDAQ penny stock that is making waves after bottoming out recently. In August, PROG broke below $0.70 to touch the lowest level on record. Now you can buy the stock for $1.79 per share, up almost 100% since last Monday.
The $120 million company develops and commercializes molecular testing products in the US. It offers three main products:
- Innatal – a noninvasive prenatal screening test offered to women early in pregnancy to screen for chromosome abnormalities, such as down syndrome, trisomy 18, trisomy 13, and sex chromosome disorders through the analysis of cell-free DNA;
- Preparent, which screens for carrier status of hereditary diseases prior to or early in pregnancy;
- Riscover – a hereditary cancer screen that analyzes 31 genes associated with inherited risk of 12 types of cancers, including the BRCA1/2 genes for hereditary breast, ovarian, colorectal, endometrial, pancreatic, and other cancer syndromes, as well as for the five genes associated with Lynch syndrome.
PROG also provides Resura, a noninvasive prenatal test for families at risk for rare single gene disorders, and Preecludia, a preeclampsia rule-out test. In addition, it offers anatomic and molecular pathology tests and COVID-19 PCR testing services, as well as test products that includes chromosomal microarray for pregnancy loss, which evaluates the genetic cause of miscarriage.
What we like is that PROG has some great inventions. For example it has PIL Dx, a “point-of-care” ingestible diagnostic device. Patients with colon cancer swallow the PIL Dx as if it were a regular pill. Then the PIL Dx locates exactly where the colon cancer is. Treatment can then be started where drugs are given to fight cancer at the exact location, which prevents the need for the uncomfortable endoscopy, surgery, and biopsy.
Also, last month, the United States Patent and Trademark Office (USPTO) issued granted PROG a patent for assessment of preeclampsia using assays for free and dissociated placental growth factor.
We see that PROG is undervalued. The stock is currently a massive short squeeze candidate, with the short float maintaining at 42%.
Investors found out that Athyrium, which owns a good chunk of PROG shares, was pushing the price down in the last months so that they could buy more shares for a cheap price in the offerings. The last offering was a forced deal between Athyrium and the CEO of PROG, as Athyrium together with their partners had 50+% of the shares. The CEO eventually resigned.
Today, Athyrium is in full power, as it has over 60% of shares together with its partners. Note that there are only 10% of shares available to the general public, and this is really a bargain price for PROG.
Athyrium wants to sell parts of the $200 million company and may negotiate behind the scenes with large companies seeking the best deals. Athyrium has sold different bio-companies in the past, so they know to make the big bucks. Another scenario is that it sells the entire company in a profitable buyout deal that would value PROG at least $1 billion, which could be a big winning case for investors holding the stock.
If it doesn’t manage to sell all the company at once, Athyrium will sell PROG in parts:
- Preecludia may be sold to Illumina or Penumbra;
- Avero may be sold to Roche;
- Oral Bio and Gastrointestinal Health, which make the most interesting part of the business, can be acquired by Pfizer or Abbvie.
Even if Athyrium doesn’t manage to push a buyout, PROG has a great business and is a great stock to hold.
$PROG is setting up for running marathon IMO
why I like it?
– no more shares to short
– abused by shorts (over 44% of the FF)
– small float
– nice targets (4,5,6,7)
– minimal risk
Look for entry now to HODL or above 1.22 for breakout
— Little Rocket Man (@kimjongwhen) September 29, 2021
PENNY STOCKS TO WATCH #3 PUGE
Puget Technologies, Inc is a Pink Current OTC stock that has increased by over 40% during the last five days, to trade at $0.008. It has no operations at the moment, but we believe PUGE has great potential thanks to its strategy to buy and develop innovative companies.
Puget plans to operate as a holding company involved in:
- Acquisition of operating companies;
- Incubation of companies that eventually want to attain independent publicly traded status;
- Organization and operation of a business development company under the Investment Company Act;
- Formation of specialty acquisition vehicles (SPACs).
In August, the company appointed Karen Fordham as the new President and CEO. The former CEO continues to be a member of the Board. Fordham is a seasoned healthcare management professional with more than 20 years of diverse experience specializing in operations, service line development, strategic planning, physician recruitment, process improvement, and financial management for large healthcare organizations.
$PUGE Has anybody take two secs & research the new CEO. No pump need it look at that background! Unbelievable, she left there to come here. Now why would $PUGE hire last month a CEO with such a an amazing, clean, & huge background in the the health industry? Hmm🤔 news this week! pic.twitter.com/n7XU8RAeK7
— Auggie (@Auggie20010) October 4, 2021
Shortly after the appointment, PUGE already said that it was expanding into healthcare. Last month, it announced its intention to buy Florida Behavioral Center, Inc and Glades Medical Centers of Florida LLC.
The important thing to know about this $40 million shell is that the almost 5 million authorized shares are maxed out, and the management doesn’t intend to issue more. Thus, whenever PUGE buys an operational business, the share price will automatically go up.
Since the AS are maxed out, you may wonder how does the company plan to raise money for its acquisitions. PUGE intends to use cash and issue Class B Preferred Shares, which have the following attributes: they have a preferred dividend equal to 20% of the net profits of the company which is cumulative; each preferred share has a 1,000 to 1 voting right and is also convertible into 10 shares of the common stock of the company.
We see a lot of potential in PUGE and consider this a great OTC stock to hold. This SPAC play has already 3 acquisitions ongoing.
$PUGE: 2 incentives 4 possible SPAC or Series of SPACs
#1: Preferred B=preferred dividend equal to 20% of the net profits of the company which are cumulative
#2: Warrants in those Preferred B are at $1.75
Full DD here,cuz Warrants are still speculativehttps://t.co/2rnYXjmgjY pic.twitter.com/Ukp378AsID
— Sibware (@Sibware) October 2, 2021
PENNY STOCKS TO WATCH #4 VNTH
Nano Mobile Healthcare, Inc is another Pink Current stock making waves. The share price has surged by over 165% since last Tuesday, trading at $0.0068. Even though its price is close to that of PUGE, VNTH’s market cap figure is 50% smaller.
VNTH is a mobile health technology company. It is developing personalized and point-of-care screening using apps based upon chemical sensing residing within a Bluetooth device that works with any smartphone, tablet or laptop. With its foundations in advanced nanotechnology, the company’s first product, the Nano Mobile Health Sensor, which is still in development, is the convergence of nano-electronics, bio-informatics, and wireless technology to create the next generation mobile health application.
Recently, young entrepreneur David Kittle became the new CEO of the company, and he has several patent-pending ideas. Moreover, VNTH is turning into a crypto play as well, with the new CEO apparently being a crypto fan, which we believe is great for VNTH investors.
Upcoming developments $VNTH:
* Introduction by CEO David Kittle
* Shareholder Letter with vision strategy
* Crypto Coin
* Merger/Partnerships with top gaming sites#gaming #crypto @Alpharidge_Cap
— Nano Mobile (@NanoTechCrypto) September 28, 2021
The company is also targeting mergers and acquisitions that will bring value to shareholders.
Shareholder question: Yes, I'm aggressively seeking mergers and acquisitions that will bring the most value to the Company and Shareholders. Shopping with a seven figure budget is a new experience. $VNTH@Alpharidge_Cap @opportunityzon
— Nano Mobile (@NanoTechCrypto) October 4, 2021
On October 5, the CEO is holding a shareholder meeting via zoom at 2:00 PM PST. He will provide a brief summary of his background and the investment capital the company has and how it plans to use the capital going forward. All in all, we see that VNTH is moving in the right direction.
THE FINAL NOTE
Now is a great opportunity to invest in top penny stocks with great potential. 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 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 penny 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.