Wall Street maintains the bullish tone at the end of August, with NASDAQ updating the record high again on Tuesday, along with the S&P 500. Russell 2000 has been bullish, although it’s about 100 points below its ATH reached in March at 2,360.
Despite the increase in the number of COVID cases caused by the Delta variant, investors are more optimistic after the FDA fully approved Pfizer’s vaccine. Meanwhile, everyone is waiting for the Federal Reserve’s Jackson Hole Symposium, which may define the next short-term moves in the stock market.
Companies, both blue chips and small caps, have had an incredible year. The S&P 500 just had its 50th record high close so far in 2021, and only in 1964 and 1995 the index reached that level by the end of August.
Ryan Detrick, a senior market strategist at LPL Financial, told Reuters:
“We have energy, retail, travel, leisure, financials, and small caps all doing well today. And that’s a sign that the reopening is alive and well.”
Most economic indicators suggest the recovery from the shortest recession continues in the right direction, although the Fed might not hurry to reverse its ultra dovish monetary policy, given the spread of the Delta variant.
All in all, this is a great time to invest in penny stocks, which can give your portfolio a big boost.
FINDING OPPORTUNITIES IN PENNY STOCKS ON ROBINHOOD
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 penny stocks on Robinhood. They are Equillium, Inc (NASDAQ: EQ), Canoo Inc (NASDAQ: GOEV), KLX Energy Services Holdings Inc (NASDAQ: KLXE), and Vivos Therapeutics Inc (NASDAQ: VVOS).
Penny Stocks on Robinhood #1 EQ
Equillium, Inc has been bullish during the last few days, although the NASDAQ-listed penny stock has been moving horizontally on larger timeframes. The penny stock is currently trading at $6.05, up 15% during the last five days. On Monday, the share price touched a swing high at $6.22, which is the highest since mid-June. EQ hit its YTD high in mid-February at over $10.
EQ is a clinical-stage biotech firm that develops and sells products to treat severe autoimmune and inflammatory diseases with unmet medical need. Its primary product candidate is itolizumab, a clinical-stage monoclonal antibody that targets the novel immune checkpoint receptor CD6, which is in Phase 1b/2 clinical trials for the treatment of acute graft-versus-host disease (GVHD); and Phase 1 clinical trial for the treatment of asthma and lupus nephritis.
On August 11, the company shared additional data from the EQUALISE Type A portion of the study in systemic lupus erythematosus (SLE) patients, which tests itolizumab. The data set shows that patients without a diagnosis of lupus nephritis (LN) but with elevated urine protein/creatine ratio (UPCR) experienced a moderate decrease in UPCR of 33% and 42% at Days 29 and 57, respectively, following subcutaneous doses of itolizumab on Days 1 and 15.
Dolca Thomas, executive VP of research and development and CMO of Equillium, said:
“We are intrigued by this observation from our Type A portion of the study in SLE patients who did not have a diagnosis of lupus nephritis and entered the study with elevated proteinuria, and experienced reductions in UPCR and ACR following two doses of itolizumab.”
Patients without lupus diagnosis but with elevated UPCR may have the subclinical disease – sometimes referred to as silent LN – where early intervention with a safe and active therapy may prevent more severe outcomes. Thus, EQ’s itolizumab may potentially prevent the development of the disease besides treating it.
EQ is still an unprofitable company, but it can grow quickly if the FDA approves its treatment. Speaking about the financial results released two weeks ago, EQ CEO Bruce Steel commented:
“The second quarter of the year was highlighted by positive data from our Phase 1b EQUATE study in acute graft-versus-host disease. These data were critical for achieving a positive outcome from our End-of-Phase 1 meeting with the FDA and accelerating our plans to immediately advance to a single, pivotal Phase 3 clinical study. This strategy, if successful, may position itolizumab to become the first approved therapy to treat patients with acute graft-versus-host disease in the first-line setting.”
The company says that Itolizumab continues to demonstrate favorable safety and efficacy profile. Data support clinical advancement of itolizumab in first-line treatment of aGVHD
In the second half of 2021, EQ is expected to release more updates about its EQUALISE Phase 1b study. You should keep an eye on the study because EQ can turn into something really big if the trial succeeds.
Penny Stocks on Robinhood #2 GOEV
Canoo Inc. has been quite volatile during the last few weeks. During the last five days, the NASDAQ-listed penny stock has increased by over 16%, although it has dropped over 9% over the last month. The share price has just bounced back from the Thursday low at $5.83, which is the lowest since the stock was listed in 2019. Currently, GOEV is trading at $7.56 and seems determined to go higher.
Canoo is an EV maker that designs, engineers, develops, and manufactures EVs for commercial and consumer markets in the US. The company offers B2B delivery vehicles, multi-purpose delivery vehicles, and lifestyle vehicles using skateboard architecture technology. It serves small businesses, independent contractors, service technicians, retailers, corporations, logistics companies, and fleet managers, among others.
GOEV went public through a special purpose acquisition company (SAPC). At the end of last year, Hennessy Capital merged with Canoo Holdings, retaining the brand name Canoo. In the first annual report, the company revealed significant changes to its business model, deemphasizing its engineering services business and no longer focusing on its subscription-based business. As a result of the changes, GOEV and certain of its executives have been sued in a securities class action lawsuit, charging them with failing to disclose material information during the Class Period, violating federal securities laws, which remains ongoing.
Considering the lawsuit and other factors, the penny stock has been heavily shorted during the last few months, with many investors agreeing that it might be a good candidate for a short squeeze. In fact, this is one of the reasons why the share price surged to the current level.
"retail investors believe this stock is heavily shorted
The company’s short interest level is currently around 33%
It has a relatively low float and price per share. It appears to have found credibility as a potential short squeeze candidate"
— 📈𝕀𝕟𝕧𝕖𝕣𝕤𝕠𝕣𝕖𝕤 𝕣𝕖𝕟𝕥𝕒 𝕧𝕒𝕣𝕚𝕒𝕓𝕝𝕖 (@inversoresbcn) August 23, 2021
Meanwhile, the National Highway Traffic Safety Administration (NHTSA) is ready to impose higher penalties for automakers that fail to meet emission rules, which is a great catalyst for EV-focused companies like Canoo.
While GOEV has constantly been declining since its IPO, it is only making the first steps, and we expect this business to expand next year. In its latest quarterly report released last week, the company reported a deeper loss than expected, although preorders surged, and this is important.
In the report, Tony Aquila, investor, chairman and CEO of Canoo, said:
“The state of Oklahoma has committed approximately $300 million in non-dilutive financial incentives to support our facility. We target to bring 2,000 high-paying jobs, with a goal to hire at least 40% of the workforce from the local community – which consists of Native Americans and veterans. We remain focused on execution as we start the countdown to SOP for our Lifestyle Vehicle when we enter the fourth quarter of this year.”
Penny Stocks on Robinhood #3 KLXE
KLX Energy Services Holdings Inc is another NASDAQ-listed penny stock that has recently bottomed out and is currently seeking to reverse the long-term downtrend. The share price has increased by about 50% during the last five days to trade at $7.19. Last Friday, KLXE fell to $4.58, which is the lowest level since November 2020. On larger timeframes, the penny stock has constantly declined for years, as it used to trade above $100 in 2019. Still, this might be a good time to buy the dip.
KLXE provides drilling, completions, production, and well intervention services and products to the onshore oil and gas producing regions of the US. The company operates through three segments: Southwest, Rocky Mountains, and Northeast/Mid-Con.
While the long-term trend is driven by the company’s fundamentals, the short-term price moves show some correlation to the oil price, and the latest price surge was probably driven by an increase in crude prices.
Oil rallied at the beginning of this week, as Mexico experienced a large production outage due to a fire on an oil platform. Meanwhile, the FDA’s full approval of Pfizer’s COVID vaccine has also supported crude prices.
All in all, KLXE has a good balance sheet and is one of those companies that can survive major crises.
Otter Creek PM: Guys, I need a company with a strong balance sheet
Otter Creek Analyst: How about $klxe? Negative EBITDA. Altman Z score is negative. Bunch of coil and wireline units in flatlining basins. Probably file Ch 11 before year end
Otter Creek PM: Perfect! https://t.co/A6gAH2LNSj
— MailboxMoney (@mailboxmoney6) August 24, 2021
Penny Stocks on Robinhood #4 VVOS
Vivos Therapeutics Inc has been extremely bullish at the end of August. The NASDAQ-listed stock surged about 80% during the last five trading days. At the beginning of the month, VVOS fell below $2.7, touching the lowest level on record, with the stock being listed last year. On Monday, daily volume exceeded 150 million shares, an absolute record, as the indicator used to fluctuate below 10 million most of the time.
VVOS is a $125 million medical technology company that engages in the development and commercialization of treatment alternatives for patients with sleep disordered breathing, such as mild-to-moderate obstructive sleep apnea (OSA). Its treatment, the Vivos System, is a non-invasive, non-surgical, non-pharmaceutical, multi-disciplinary treatment modality for the treatment of mild to moderate OSA. The company also offers VivoScore, a comprehensive home sleep apnea test.
The share price of VVOS surged shortly after the FDA approved Vivos’ mmRNA (modified mandibular Repositioning Nighttime Appliance) device for treating mild to moderate OSA, sleep-disordered breathing and snoring in adults. This FDA clearance paves the way for expanded insurance reimbursement coverage for the mmRNA device, including Medicare, as well as for potential future government contracts and reimbursement from commercial payers that follow Medicare guidelines.
The company cited data showing that over 1 billion people globally and 54 million Americans suffer from sleep apnea, most of whom remain undiagnosed. The chronic illness increases the risk of comorbidities, including high blood pressure, heart failure, stroke, diabetes, dementia, and other life-threatening diseases.
Vivos’ oral appliances address the dental tissue anomalies and malformations known to be associated with OSA. Unlike current standard-of-care interventions, patients treated with the Vivos System typically complete their therapy in 12 to 24 months and, in most cases, do not require lifetime intervention.
VVOS CEO Kirk Huntsman said:
“The FDA’s market clearance of Vivos’ newest device, the mmRNA appliance, represents a significant milestone in our ongoing efforts to provide the best possible treatment for people who continue to suffer needlessly from OSA, a debilitating condition that causes or contributes to a wide range of chronic health issues.”
VVOS is already a profitable company, and its revenue continues to increase. In Q2, revenue and gross profit rose over 30% compared to the same period in 2020. We think VVOS is undervalued at this point. With a healthy balance sheet and a bright future, especially thanks to the FDA approval, we expect the share price to consolidate above $10.
THE FINAL NOTE
Now is a great opportunity to invest in hot stocks with great potential as the economy recovers. 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 of penny stocks.
The 4 penny stocks on Robinhood 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)!
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.