The US stock market is trying to recover after falling to the lowest in months, with NASDAQ declining last week to the lowest since July.
On Wednesday, the Federal Open Market Committee’s (FOMC) minutes showed that the central bank could start reversing its bond-buying program in mid-November of this year, which means less free money reaching stocks.
On Thursday, the Labor Department data showed that consumer prices increased solidly in September, although in line with expectations. The high inflation might put pressure on the Fed to raise interest rates. Investors are worried that high inflation is not temporary, as the Fed claims.
Sung Won Sohn, professor of finance and economics at Loyola Marymount University in Los Angeles, told Reuters:
“Inflation is no longer ‘transitory’. Supply-chain bottlenecks are getting worse. The logjam is unlikely to ease anytime soon despite the latest intervention by the White House.”
Despite the recent bearishness, there are still many penny stocks performing well and providing opportunities for investors.
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 worth watching, two of which are listed on NASDAQ. They are Active Health Foods, Inc (OTCPK: AHFD), HIVE Blockchain Technologies Ltd (NASDAQ: HIVE), MGT Capital Investments, Inc (OTCQB: MGTI), and U.S. Well Services, Inc (NASDAQ: USWS).
PENNY STOCKS TO WATCH #1 AHFD
Active Health Foods, Inc has been surging and momentum is still accelerating. The OTC stock has jumped 360% since last week and almost 4,500% since mid-September, currently trading at $0.0046. Earlier this year, the company started to file its financial statements to become Pink Current. Currently, the OTC stock goes with the Pink Limited Information symbol.
Previously, AHFD used to engage in the distribution of nutritional goods. Its products included organic food and beverages through the Active X brand.
However, the company has had no operations for a while. The share has been surging on the news that Glen Bonilla, President and CEO of CoinChamp.com, acquired the majority stake in AHFD.
Glen is an experienced entrepreneur with an extensive banking background with positions at Wells Fargo and high-level accounting positions with several notable microcap publicly traded companies. His ability to build and conceptualize multiple startups awarded CoinChamp a showcasing in the Forbes 30 under 30 conference in Detroit in 2019.
For AHFD, Glen has several target M&A opportunities in the pipeline. The company admitted that a merger with CoinChamps will likely be the first of several disruptive transactions.
— StockMinds009 (@Stockminds009) October 11, 2021
CoinChamps is a live prediction and trivia game where players can predict yes or no questions on crypto, sports, politics, weather, markets, and other events in order to advance for a cash prize. The app has a rating of 4.6 on the App Store.
With a great reverse merger opportunity and more M&A candidates to be announced, AHFD is a great stock to buy at this price that is still cheap. More new investors are discovering this OTC stock with bullish momentum as volume surged to over 2 billion shares on Monday alone.
PENNY STOCKS TO WATCH #2 HIVE
HIVE Blockchain Technologies Ltd has been moving sideways since May on every possible timeframe, fluctuating between the support at $2.2 and resistance at $3.6. Currently, the share price is $2.9, but the company has robust fundamentals and can gradually increase over time.
By the way, do not confuse the company’s ticker with the cryptocurrency known as Hive, which surged on October 6 by over 100%.
The $1 billion NASDAQ-listed company is one of the most popular crypto mining firms. It changed its name to HIVE Blockchain during the Initial Coin Offering (ICO) craze in late 2017, and since then has gradually increased to hit a record high at over $5 in mid-February. As you may guess, the main driving force behind HIVE’s share price is the bullish sentiment of the crypto industry and Bitcoin in particular.
HIVE operates crypto mining operations in Canada, Sweden, and Iceland. It engages in the mining and sale of digital currencies, including Bitcoin, Ethereum, and Ethereum Classic.
At the end of September, the company announced that it had become profitable. It posted a net income of over $40 million for the fiscal year ended 2021, compared to a net loss of almost $2 million in the previous year. Income from crypto mining surged 174% to $66.7 million. During the fiscal year, HIVE mined 595 Bitcoin and 96,300 Ether.
The company’s gross mining margin during the year was $50.1 million compared to $8.5 million the year before.
Investors are bullish about HIVE, especially after the company announced last week that it had issued millions of shares under the At-the-Market Equity Program that were sold at an average price of $3.85, which is above the recent resistance.
Crypto mining has suddenly become an even more profitable business after China cracked down on local miners when it accounted for almost half of the hashrate. In a recent report released by A2Z Market Research, which discusses the largest miners, including HIVE, the authors concluded that:
“The market is predictable to grow at a healthy pace in the coming years.”
Besides external factors, HIVE has a healthy balance sheet that allows it to remain a leader among crypto miners.
PENNY STOCKS TO WATCH #3 MGTI
MGT Capital Investments, Inc is another crypto mining firm, but this time it’s an OTC stock, and it’s an OTCQB member. The company has a market cap of $17.5 million, which is infinitesimal compared to HIVE’s $1 billion valuation. Investors now have the chance to buy the dip as MGTI has been correcting from its YTD high reached in January at almost $0.30. Now the stock is ten times cheaper.
But should you buy the dip? There are some red flags you should know about.
Earlier this year, Bloomberg Law reported that MGTI CEO Robert Ladd would face additional fraud claims in a lawsuit brought by the Securities and Exchange Commission (SEC) over an alleged pump-and-dump scheme after the US District Court for the Southern District of New York largely denied his motion to dismiss the regulator’s amended complaint.
Previously, Ladd had already faced allegations that he falsely hyped up a connection to tech entrepreneur and crypto fan John McAfee, the creator of McAfee antivirus. He was also accused by the SEC of participating in a pump-and-dump scheme led by one of the largest shareholders in Riot Blockchain, Barry Honig, who, together with former Riot Blockchain CEO John O’Rourke, and investors John Stetson and Michael Brauser, allegedly manipulated stock prices in three microcap companies.
However, despite accusations, Riot Blockchain eventually surged to hit the highest in over a decade earlier this year. Can MGTI do it while dealing with the charges? We don’t know, but at this price, it’s a gamble worth taking as the worst might be behind the company.
Interestingly, last month, an article claimed that MGTI was expanding its mining operation in Walker County. However, the company filed an 8-K with the SEC to say that:
“While the Company is pursuing its expansion in Walker County, there have been no commitments made with respect to such expansion, and there can be no assurance that the Company will complete such expansion, have the funds to complete such expansion, or come to agreeable terms with the relevant parties in Walker County to complete such expansion.”
While MGTI can benefit from the general bullishness of the crypto space, you should consider the pros and cons of the drama surrounding MGTI. However, with just a $17 million market cap, the odds favor the bulls.
PENNY STOCKS TO WATCH #4 USWS
Another NASDAQ-listed stock from today’s list is U.S. Well Services, Inc, which has been moving sideways since March after correcting from the YTD high at almost $10 reached in February.
USWS operates as an oilfield service company in the US. It provides hydraulic fracturing services to oil and natural gas exploration and production companies. Both its conventional (diesel) and Clean Fleet® (electric) hydraulic fracturing fleets are among the most reliable and highest performing fleets in the industry, with the capability to meet the most demanding pressure and pump rate requirements in the industry.
However, the company is leaving the diesel frac market. In a recent update released at the end of September, USWS said that it was about to become the first pure-play, publicly-traded electric completions provider. It was extended its existing Clean Fleet contract and awarded tender for the first of four newbuild Nyx Clean Fleets.
The company has simplified its capital structure by repaying over $44 million of senior secured term loan principal. It was also implementing a reverse share split of 1 post-split share for every 3.5 pre-split shares.
USWS President and CEO Joel Broussard stated:
“Our vision is to be recognized as the market leader for low-cost, low-emission, completion services and a proven adherent to environmental, social and governance best practices. In pursuit of this goal, U.S. Well Services is committed to executing our plan to delever our balance sheet and becoming the largest, and only pure-play, publicly traded, provider of electric completion services. I am pleased with the progress our team has made as USWS repositions and expands its portfolio of clean completions technology.”
The company is currently operating five all-electric fleets and expects to grow to 9 electric fleets by the end of 2022. It continues to experience strong demand for electric fleets, as evidenced by recent commercial momentum. In August 2021, USWS executed an agreement extending an electric fracturing services contract with an existing customer through the end of 2022.
We like that this $150 million company has many patents covering its products and services.
USWS has a great future, with revenues expected to grow over 20% per year, and we think it’s undervalued. On top of that, the stock might become a good short squeeze candidate, with about 20% of the float being shorted.
— Shemar anglin † (@S_AnglinIV) October 12, 2021
THE FINAL NOTE
Now is a great opportunity to invest in top penny stocks with great potential. Our job is to identify the best penny stocks with strong fundamentals and let our subscribers pick the ones they like to build a well-diversified portfolio.
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.