With the Memorial Day celebration upon us, investors are in a buying mood for the third straight day with many OTC stocks on the move. The markets are closed on Monday, so many are looking to get their trading appetite satisfied before filling up on burgers and hot dogs over the next three days.
The major averages have rebounded nicely off last week’s lows. A busy morning of economic releases has been largely positive helping the S&P 500 finish higher for the fourth straight month.
The biggest data points were this morning’s inflation readings. The personal consumption expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, rose 3.1% year-over-year in April. This was a tad ahead of economists’ forecasts and marked an acceleration from the 1.9% March uptick, but did little to rattle the markets.
As the week progressed, the markets became more comfortable with the Fed’s assertion that the recent rise in inflation will be temporary. Several Fed speakers repeated this sentiment this week.
Improving investor sentiment about the economic recovery in the wake of a strong first-quarter earnings season has helped boost spirits as well. So too has President Biden’s $6 trillion budget for the upcoming fiscal year. This is providing support for sectors that are expected to benefit the most from the massive federal spending including education, health care, infrastructure, and manufacturing.
With the markets back in risk-on mode, small and micro caps were some of the week’s biggest gainers. After slumping mid-week, the OTCQX Composite went on a nice run challenging the record high posted earlier in the month.
Within the OTC markets, there are a handful of names that caught our attention. Each has made a big statement over the last few days and been the source of a lot of social media commentary.
Based on the Discord, Reddit, and Stocktwits chatter, GGII, GMER, PQEFF, and VDRM are names to keep in mind as the BBQs wind down.
OTC STOCKS ON THE MOVE #1 GGII
This is the fifth time in the past month that we’ve highlighted Green Globe (GGII), so that indicates how much we like it.
The cannabis play traded at $0.0173 when we first wrote about it on April 27th. That can be found here.
Insider Financial subscribers that jumped in before our regular readers caught a twenty-bagger in two weeks. We always alert our subscribers ahead of our regular readers and that’s why having a subscription to Insider Financial is so important.
GGII continues to be one of the most talked-about OTC stocks on social media. Some think the recent pullback to the $0.03 level is a second chance of a lifetime. We tend to agree.
The stock seems to have found support at the 50-day moving average. Several other technical indicators like the MACD on the daily chart are also pointing to a reversal.
GGII kicked off the long weekend in style trading up over 40% on Friday. Volume was above the 90-day moving average, a potential sign of more upside.
Founder and CEO Sandro Piancone presented at Wednesday’s Emerging Growth Conference. It featured a dozen companies in the cannabis, technology, precious metals, and other high-growth spaces.
However, if the investors, advisors, and analysts in attendance liked what he had to say, you wouldn’t know it by the stock’s reaction. GGII slid from $0.075 to under $0.03 by Thursday’s close.
More importantly, investors were hit with the news that GGII and privately-held Hempacco are looking to merge. Our readers may recall that Mr. Piancone is the CEO of both companies.
Under the deal, GGII would acquire Hempacco by issuing more than 70 billion GGII shares to Hempacco shareholders of which nearly 98% have already agreed to the exchange. Based on the closing share price the day before the announcement, the deal is worth over $5.2 billion.
Hempacco is a hemp cigarette maker known for its Real Stuff brand that contains less than 0.3% THC. The company is trying to disrupt the nearly $1 trillion tobacco industry through its herb and hemp-based alternatives to nicotine cigarettes. In addition to developing in-house brands, it is planning to launch 600 “HempBoxes” vending machines.
The reverse merger will effectively turn Hempacco into a public company, a move many on social media are appropriately buzzing about. This will give Hempacco greater access to capital to pursue its growth developments and acquire other hemp cigarette brands. Do we dare say the latter is a “roll-up” strategy? It would also mean Hempacco would gain a wider customer base.
Confirmation of the deal going through could spark the next leg in the rally. With only 2% of Hempacco shareholders left to give Green Globe the green light, things could move very quickly.
OTC STOCKS ON THE MOVE #2 GMER
To say the least, Good Gaming (GMER) has had a good week. GMER was the top-performing OTC stock of the week with a 417% gain.
Four years ago the stock had a 1-for-1,000 reverse split. It went on a nice run in January 2018 peaking at a post-split high of $0.29. After a sharp pullback, it traded back in sub-penny land for the better part of two years.
Interest in the stock then began picking back up in the fall of 2020. As the video game market took off during the pandemic investors began searching for ways to play the space. GMER climbed as high as $0.14 in January only to dip back below $0.02 as OTC stocks fell out of favor.
Things changed dramatically this week. Many investors rattled by cryptocurrency volatility and re-enamored with popular social media platforms have returned to the OTC market. GMER has been in the crosshairs of a lot of home-run seekers.
That’s because on Thursday, an iHub report showed that GMER is launching a collectible non-fungible tokens (NFT) game that will produce cryptocurrency. The online game will be the first of its kind combining elements of the surging NFT and crypto mining markets.
The NFT market has opened new doors for the gaming industry The wildly popular CryptoKities game on the Ethereum network is seeing millions of dollars spent daily on newly bred virtual cat collectibles. You just can’t make this stuff up!
Source: microbuddies.io (Good Gaming, Inc.)
Dubbed MicroBuddies, GMER’s new game will allow players to adopt “lovable, self-replicating microbes” that passively produce the company’s own cryptocurrency called GOO. This can then be used to create new MicroBuddies.
“Well-bred” Microbuddies that have a high rate of GOO production can produce profits for players. GOO will eventually trade on third-party cryptocurrency exchanges. The game is expected to go live in July.
With the pending release, GMER now sits at the crossroads of gaming, crypto, and NFT—three of the hottest investment areas in recent months.
Investors are already betting MicroBuddies will be a huge hit. GMER jumped 78% on Thursday and nearly 200% on Friday on massive volume.
If the social media hype continues at this pace, GMER investors will be seeing some self-replicating returns.
OTC STOCKS ON THE MOVE #3 PQEFF
What a whirlwind of a week it has been for Petroteq Energy (PQEFF). PQEFF closed up 221% for the week!!
On Monday, the California-based clean energy company responded to a stock offer that appeared in Bundesanzeiger, a publication of Germany’s Department of Justice and Consumer Protection. The company had received several emails from European shareholders who were told by brokers that they had received an offer to purchase PQEFF shares.
It learned that a Swedish entity named Uppgard Konsult AB was acting on behalf of an unidentified third party behind the offer and that a press release was forthcoming. PQEFF didn’t know about the offer and since no regulatory filings were yet made under the applicable Canadian securities laws, it simply advised shareholders to do their own due diligence before taking action.
Nothing further has materialized from the matter, but it helped pre-heat PQEFF for what was to come next.
On Thursday, the company announced that oil production was back on its oil sands plant at Asphalt Ridge in Utah, also known as the ‘POSP’. Plant operations had been suspended since May 14th when the company was issued a Cessation Order (CO) from the Utah Department of Oil, Gas, and Mining (DOGM). The agency was concerned about the processing of offsite oil sands ore which was not specifically addressed in PQEFF’s Notice of Intent (NOI).
Following a meeting with the DOGM, the CO was modified to allow the operations to occur through June 30, 2021 including both local and offsite oil sands ore. To keep the operation going from there, PQEFF will have to submit an updated NOI.
While the operations were on hold, the Asphalt Ridge plant moved forward with the integration of a trial solid processing unit that is undergoing testing. It now has enough data to design its proposed 5,000 barrels per day oil production train and move into a phase of sustained commercial production.
PQEFF owns a proprietary oil-extraction technology designed to get heavy oil and bitumen from oil sands and mineable oil deposits. It can be applied to both water-wet deposits and oil-wet deposits. The main advantage of the technology is that since water isn’t part of the extraction process, potentially harmful wastewater isn’t put into the environment.
The news sparked a run to nearly $0.18 in huge volume. PQEFF has since pulled back to $0.13, but given the sudden momentum, it could certainly gush higher over the long term.
OTC STOCKS ON THE MOVE #4 VDRM
ViaDerma (VDRM) is one of our favorite long-term pharma plays. We’ve written about the company on several occasions including in January when it went on a stunning two-day run. That article can be found here.
The stock has been a repeat runner and was back at it this week.
VDRM has developed a patent-protected technology that allows medicines and nutrients to get delivered through the skin rather than ingestion or injection. It licenses products based on this transdermal technology to medical companies for the treatment of things like infectious diseases and wound care. The technology can also potentially be applied to the skincare, cosmetics, and sports nutrition markets.
The company’s lead Vitastem product is a topical antibiotic that can be used to treat cuts, wounds, infections, burns, acne, and other skin conditions. The FDA recently approved the registration of a new 55ml spray bottle version of Vitastem. This came at the request of hospitals who were testing the product and found it would be easier to apply to larger wounds.
VRDM is also developing products for toenail fungus, diabetic amputations, and various skin diseases.
It has also gained attention as a cannabis play due to its potential in the medical marijuana space. Anti-aging, male-pattern baldness, erectile dysfunction, skin cancer, and pain management are other market opportunities according to the company. Together these global markets add up to billions of dollars.
Earlier this month, VRDM announced that is closing in on an initial order from a large hospital network for Vitastem. This set off a two-week rally that has shown little sign of slowing down.
The unnamed network is said to have completed testing of Vitastem and approved the product for purchase. If the deal is sealed, Vitastem would be used in hundreds of hospitals, nursing homes, and hospice centers.
Dr. Chris Otiko, President & CEO of VDRM, commented, “We are very pleased with the progress our marketing team is making towards finalizing this initial order. Once complete this will be the largest single order for Vitastem to date.”
As if this wasn’t enough to get social media buzzing, VRDM also announced that it is in the process of entering a new licensing agreement with a different customer.
Earlier this year it secured a licensing agreement that is expected to expand to two more states by the end of this month. This would bring it to eight states. Under this agreement, VRDM gets $5,000 a month for each state, so we are looking at $40,000 in monthly revenue starting next June.
This is probably just the tip of the iceberg. Eventually, it could expand to all 50 states which would be a quarter million in revenue for the current agreement alone.
This stock continues to make our skin tingle with excitement.
VRDM has no debt and there shouldn’t be a need for toxic financing or dilution going forward.
Retail investors have taken a renewed interest in VDRM. Volume has thus far been light compared to what we saw in January.
If the company provides more detail around the hospital network order, new agreement, and any additional orders, volume would really take off and new highs reached.
As we keep saying, there are always opportunities in the markets and it’s our job to find winning stocks before they run for our subscribers. Huge gains can be made in such a short amount of time, just like we saw this week with GMER, PQEFF and GGII and VDRM previously.
If you like any of these 4 OTC stocks on the move, 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 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)!
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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.