Yesterday we talked about the different indices that penny stock investors can use to track market performance. We discussed the Dow Jones U.S. Micro Cap index and its more global counterpart the OTCQX Composite which can be found here.
While these indices cover a broad slice of the penny stock universe there are other places to find good buys. The New York Stock Exchange (NYSE), or “The Big Board”, also contains a good number of penny stocks. In fact, within the NYSE Composite index, there are more than 100 companies trading at less than $5.00, a common threshold used to define a penny stock.
The NYSE’s big cousin, the Nasdaq Stock Exchange also lists many low-priced stocks. More than 200 Nasdaq Composite constituents are selling in penny stock territory. Together the two heavyweights offer penny stock investors a great selection of companies across several economic sectors.
Investors that like exchange-traded funds (ETFs) often take an interest in the widely held Invesco QQQ Trust ETF (QQQ). It is an inexpensive way to get exposure to the largest 100 Nasdaq companies. However, with some 1,500 stocks in the Nasdaq Composite, it encompasses a small subsection of the companies in the tech-heavy Nasdaq.
Those that prefer access to a much broader slice of the pie, may want to consider the less popular but more potent Fidelity Nasdaq Composite ETF (ONEQ). While you won’t find any penny stocks in the QQQ, you find roughly 20 in ONEQ.
Interestingly, most of the penny stocks in ONEQ are up this year. This includes IDEX which we’ve written about on several occasions dating back to July 2020. IDEX was one of the penny stock darlings of 2020 soaring more than 130%. Its share price has been halved since its February 5th peak but IDEX is still up another 29% this year.
OPK is another Nasdaq Composite penny stock that caught our attention early last year. It skyrocketed 169% in 2020 and currently trading around $4.00 is still considered a penny stock.
With this said, ONEQ is an improvement over QQQ to gain penny stock exposure, but buying individual stocks is even better. That’s where Insider Financial comes in. Our history of spotting penny stock winners as they are revving up is what brings many investors to the platform.
Speaking of potential winners, today we highlight four low-priced Big Board penny stocks that may soon be graduating from the penny stock universe.
BIG BOARD PENNY STOCKS TO WATCH #1 BRN
Back in late January 2021, we introduced BRN as a low-float oil & gas play. The stock was surging after the company announced that a proxy contest wasn’t in the works. This was perceived by the market to enhance shareholder value.
Fast forward to May 2021 and BRN is at it again. This time there haven’t been any press releases but that hasn’t stopped investors from bidding up BRN.
On May 3rd, BRN surged to an intraday high of $4.34. Over 5 million shares traded hands that day, more than 10-times the 90-day average volume. A day later, roughly $2.00 had been shed from the share price as of early afternoon trading.
Absent any major news, it’s hard to say what the catalyst was here. There has yet to be any insider trading activity reported either.
BRN could be a classic ‘pump and dump’ situation. This is when an investor or group of investors artificially inflate the price of a stock by spreading false information. They then sell the stock at a higher price.
It may also be the case that BRN is regaining momentum as an oil & gas recovery play. The company sells oil and natural gas to the Canadian market. It also offers well-drilling services, water pump installation, and invests in land in Hawaii.
With oil prices rebounding sharply off their pandemic lows, many investors have turned to beaten-down energy stocks. That is a big part of why many value stocks are suddenly in favor. Brent crude oil, the international oil benchmark, is trading in the upper $60’s after sinking to around $20 a year ago.
Investors should exercise caution with BRN given the lack of a clear catalyst. But it is certainly one to keep on the radar as a low-float energy play.
BIG BOARD PENNY STOCKS TO WATCH #2 DPW
After flatlining for the better part of 20 years, DPW has been far more volatile in recent years.
It has helped that the electronics company enacted two reverse stock splits over the course of five months in 2019. These have not only saved the stock from being delisted but put it on penny stock investors’ radar.
Back on November 23rd, 2021, DPW went on a remarkable two-day run that saw the stock go from around $2.oo to a peak of $10.94. Nearly 400 million shares were traded over the two days.
The fire was stoked by DPW’s third-quarter earnings report. It showed a 95% increase in gross profit.
This was followed by news that the company’s Coolisys Power Electronics division had planned to test its ACECool electric vehicle (EV) chargers with an eye on serving the fast-food industry. This got the market charged up about DPW as a niche EV play.
At the time, DPW’s CEO Amos Kohn commented, “The opportunities for Coolisys in the burgeoning EV marketplace are anticipated to drive our sales growth over the next 60 months and beyond. We look forward to the potential changes coming from increased demand for EVs and the recent trends related to government support of the electrification of transport. I believe we are well positioned to leverage these opportunities as a 50+ year old company experienced and capable of creating innovative and highly-efficient power systems and solutions.”
DPW has since had a few flare-ups but the longer-term trend has been down. However, the stock may have found a bottom on April 21st when it again starting moving higher around the $2.00 level. Investors may be hoping for a repeat performance from the November 2020 surge.
Then on March 25th, DPW announced that the Coolisys segment received a $10.5 million order for residential EV chargers. The 30,000 unit order was part of DPW’s three-year purchase agreement with Origin Micro subsidiary iNetSupply.com.
EV stocks have begun to recover from their spring swoon and DPW appears to come along for the ride.
Last month DPW reported fiscal 2020 year-end results that showed a 15% jump in revenue and a continued improvement in gross profitability.
DPW appears to be on the upswing. Given the stock’s recent history of big runs and exposure to the EV space, it’s one penny stock lovers should be plugged in to.
BIG BOARD PENNY STOCKS TO WATCH #3 ISNS
ISNS is technically not a penny stock currently trading around $8.00, but it was just last week. This is yet another example of how quickly penny stock investors’ fortunes can change.
A few days ago ISNS was humming along in a two-month sideways pattern in the $4.00 to $5.00 range. This trend changed dramatically on April 29th when ISNS announced a series of strategic changes:
- The initiation of a $0.12 per share quarterly cash dividend
- A 200,000 share buyback program
- The reorganization into a new holding company called Autoscope Technologies Corporation
- The transition of Executive Chairman Andrew Berger to CEO of Autoscope Technologies Corporation
In making Autoscope Technologies the new parent company of Image Sensing Systems the company is highlighting Autoscope, its best known and most successful products. Autoscope is a series of video detection solutions that improve the traffic flow and capacity of urban roadways. The Autoscope video detection cameras combined with analytics are designed to help cities move traffic safely and efficiently through a data-driven process.
Autoscope CEO Andrew Berger stated, “Over the last five years, Image Sensing Systems has prudently rebuilt its balance sheet while significantly improving its bottom line profitability and cash flow. By reorganizing and building on the success of the Autoscope brand, we will work on growing the business with a focus on organic opportunities while also examining acquisitions and partnerships that can leverage the reputation, assets, and talents within the Company. We intend to transform the Company into a group of profitable business lines marketed to a diverse customer base that generates sustainably higher earnings.”
To say the least, the market likes the direction ISNS is headed in. Aside from the shareholder value created by the new dividend and stock repurchase program, the rebranding to Autoscope should make it more recognizable in the investment community.
On the heels of the strategy news, ISNS reported 2021 first-quarter results that instilled further investor confidence in the company. Revenue fell 6% to $2.98 million but the company swung to a profit even excluding income recognized from a Paycheck Protection Program (PPP) loan. Lower operating expenses helped drive the bottom line result.
Word of the strategic pivot and Q1 financials launched ISNS shares above $11.00 on May 3rd, 2021 as more than 80 million shares were traded over a two-day period. Some profit-taking has since set in, but the down volume has paled in comparison.
ISNS expects the reorganization to be completed by the end of the second quarter. In the meantime, we are sensing ISNS will continue trending higher.
BIG BOARD PENNY STOCKS TO WATCH #4 PRPO
Last but not least, PRPO looks like it got shot out of a cannon this week. After closing last week at $1.82, it has staged a remarkable two-day rally in heavy volume. At one point, PRPO had quintupled.
The PRPO run was sparked by the launch of the company’s rapid COVID-19 antibody test on Amazon.com’s business platform. Naturally, the product’s availability on Amazon is expected to send sales to a new level.
The 20-minute COVID-19 test was the first U.S.-based test to be granted emergency use authorization (EUA) by the FDA for point-of-care. It is manufactured by Nirmidas Biotech out of California but PRPO has exclusive distribution rights on Amazon. Only qualified medical point-of-care (POC) providers can purchase it.
Ilan Danieli, CEO of PRPO said, “We are very excited to be working with our partner Nirmidas to get this important rapid test on the largest retail platform in the world. We look forward to working with other retail outlets, as well as Nirmidas to advance this product into at-home use, following the recent receipt of FDA authorization.”
The Amazon distribution news is undoubtedly huge. Additional headlines around other retail partnerships or the advancement of PRPO’s at-home aspirations would likely prolong the rally.
Maxim Group’s Jason McCarthy certainly has his finger on the pulse of PRPO. On April Fool’s Day, the sell-side analyst took over coverage of the stock and gave it a $7 price target—no joke. He cited the company’s shift to its “higher-margin hematology diagnostic products” business.
Loyal PRPO shareholders have twice endured reverse stock splits since June 2017 but after this week’s massive volume rally may finally be getting their due.
It doesn’t appear to be too late for new investors to jump in on PRPO either. As of late afternoon trading on May 5th, the stock had corrected about one-third from its $9.18 peak.
More importantly, PRPO’s Amazon opportunity and other growth avenues stand to give the stock some serious momentum.
As we keep saying, there are always opportunities in the markets and it’s our job to find hot penny stocks for our subscribers. Huge gains can be made in such a short amount of time.
If you like any of these 4 penny stocks, our best advice is to be patient and throw bids in below the market. Buying dips and selling rips as swing trades remains the best strategy.
It’s also important to look for penny stocks that have yet to run. There are plenty of opportunities out there and we screen hundreds of penny stocks each week looking for the best alerts for our subscribers.
Remember, all it takes is one or two to become a winner and you’ve crushed the market indices for the year.
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.