Penny stocks are finally starting to act a little better. The past few weeks have been hard for many penny stock investors as investors went into risk-off mode. There are many reasons for this.
First, investors have been spooked by Biden’s tax hike proposals. While most expected the top income tax rates to go higher, none expected Grandpa Joe to propose hiking capital gains rates.
Second, the SEC proposed new rules and regulations for SPACs. We see this as an over-reaction as more needs to be disclosed as to how much SPAC promoters are making for putting the deal together. Furthermore, everyone and his brother launched a SPAC, and not every deal will be a success. The SPAC market got too frothy in our opinion.
Third, so far, earnings season has not been that exciting. Most penny stocks are recovery plays due to last year’s COVID pandemic. The storyline to keep bidding penny stocks higher got old. There need to be catalysts to keep new buyers coming in. Last year, there was nowhere for folks to spend their stimulus money except in stocks or online gambling. Now, people are booking trips and wanting to get back to normal.
Fourth, COVID fatigue. People want to get back to normal as quickly as possible. It doesn’t help when you have Fauci going on TV and saying vaccinated people still have to wear a mask. That message doesn’t convince many of the non-vaccinated to get the vaccine.
Fifth, 2020 was an incredible year for investors. That momentum then continued as investors focused on the new Biden/Harris administration and the vaccine rollout. If you look at the charts for most penny stocks, almost all peaked in February.
Sixth, the market makers have been naked shorting penny stocks. Until the SEC puts a stop to this practice, it will continue to occur. This practice has made the recent bear market worse for investors. Plus with so many new traders easily scared out of positions, the market makers have been able to make easy money.
Finding Opportunities In Penny Stocks
There are still plenty of opportunities for investors if they follow us here at Insider Financial.
The key to trading penny 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.
We always alert our subscribers first before we publish for our regular readers. This is the value of having a subscription to Insider Financial, which you can sign up for here. We alert our subscribers with our best ideas before our regular readers.
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 penny stocks. 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 to watch Alpine 4 Technologies (OTCMKTS: ALPP), Biotech Products Services and Research (OTCMKTS: BPSR), Uxin Limited (NASDAQ: UXIN), and 22nd Century Group (NYSEAMERICAN: XXII).
Penny Stocks To Watch #1 ALPP
ALPP has been a huge winner for Insider Financial subscribers as we started covering ALPP at $.075, which you can read about here.
We also said last month that ALPP was a potential bottom play on the dip under $3, which you can read here as well.
ALPP continues to fire on all cylinders as it prepares to uplist to NASDAQ. As we saw with MindMed (NASDAQ: MNMD), which we first told our subscribers about back in September when it was just $.63 a share and you can read here, an OTC that uplists to NASDAQ can get moving quickly.
This month, ALPP reported year-over-year revenue grew to $33.5 million at a rate of 19% over 2019 and that the Company expects to report its shareholder equity to grow to $40 million in Q1 2021.
Yesterday, ALPP agreed to acquire Thermal Dynamics International, Inc. (TDII), a Fort Myers, Florida company. A4DS and TDII expect to meet the closing conditions of the definitive purchase agreement by May 17, 2021.
Thermal Dynamics International, Inc. is an international engineering, fabricator, and project management services company. TDII’s primary client is the United States Federal Government, including the Department of Defense (DOD) and Department of State (DOS). TDII specializes in managing complex project assets and infrastructure for its customers, including support services for the thermal engineering and design of US Embassies and Consulates worldwide.
Kent B. Wilson, CEO, had this to say, “The formation of A4 Defense Systems, Inc., was in response to the growing demand from our A4 Aerospace, Inc. holdings to have a bifurcated platform to extend our offerings to the growing needs of the US Federal Government and its allies. While TDII is a non-aerospace acquisition for us, it does put us firmly in bed with the US Federal Government. For the past 34 years, TDII has been a pillar of support for the Department of State and its complex embassy and consulate system worldwide. The company, on average, generates between $9 million and $13 million in annual sales. Further, with the addition of TDII, the Alpine 4 family of employees is now over 350 strong, and spans across 6 states that proudly build, design and manufacture in the USA. Over the next 18 months, the ALPP and TDII management teams will enact several capital purchases that will allow TDII to grow in excess of $50 million by the end of 2025. I hope all shareholders and employees will join me and welcome our new employees to the family!”
ALPP still has room to run as the stock is still down 50% from its February high of $9.49.
Penny Stocks To Watch #2 BPSR
BPSR rocketed 636% after announcing positive results for the first ten COVID-19 patients treated with Zofin™ in India. This didn’t come as a surprise as BPSR has been putting out a steady stream of press releases signaling that something big was about to happen.
India has the worst outbreak of Covid right now in the world. The Indian Health Ministry is reporting more than 350,000 new COVID infections and over 2,500 deaths per day, a world record, and India is now seeing more new infections than any other country, almost half of all new cases in a global surge.
This initial trial is being conducted in conjunction with Organicell’s Indian partner, CWI India, with whom Organicell entered into a product testing and distribution agreement on February 9, 2021, to study the effects of Zofin™ on moderate to severe COVID-19 patients.
The initial ten trial participants were hospitalized patients and were treated at Narayana Hrudayalaya Hospital in Bangalore, Lisa Hospital in Kozhikode, Kerala, and Prime Indian Hospital in Chennai, and all patients have recovered from their symptoms and have since been discharged from the hospital.
Based on the initial results of this trial, the trial will be expanded to an additional sixty-five patients with moderate to severe COVID-19, who will be treated at these hospitals over the next several weeks, with treatments expected to be completed by the end of June 2021.
If the results of the expanded trial are similarly positive, Organicell and CWI India, intend to file with the ICMR (Indian Council for Medical Research) for Emergency Use Approval to use Zofin™ in India as a therapeutic for treating COVID-19.
India is desperate for treatments and BPSR is primed to deliver. We expect further positive data from BPSR.
Penny Stocks To Watch #3 UXIN
UXIN is running after announcing strong Q3 earnings and signing an agreement with JD.com.
UXIN completed the transformation to an inventory-owning model with 99% of the transaction volume being sold from the company’s own inventory. 2C transaction volume (completed with the use of online sales) stood at 2,307 units compared to 2,653 units last quarter and 28,302 units in the same quarter a year ago.
Revenues, recognized on a gross basis, surged 30.8% Y/Y to RMB322.9M ($49.5M). With the adoption of the inventory-owning model, Uxin expects its total revenues for FQ4 to be in the range of RMB190M to RMB200M; FQ4 is traditional off-season in the Chinese used-car market due to the Spring Festival holiday.
“To strengthen our ability to provide used cars of high quality and value-for-money, we are building our own inspection and reconditioning centers, or IRCs, where we can refurbish selected inventory to a like-new condition. Our first IRC in Xi’an has been in operation since March 2021,” founder, chairman & CEO Mr. Kun Dai commented.
Last week, the company entered into a strategic partnership with JD.com to launch its self-operated online store for used car transactions through JD’s platform. Also, the company entered into a binding term sheet for a potential investment of up to $300M.
UXIN has a current market cap of $547 million and almost 5% of the float is short. Insiders own 16% of the company.
Penny Stocks To Watch #4 XXII
XXII is running as Joe Biden gets ready to crack down on the tobacco industry.
The Biden administration is likely to announce this week that it will propose a ban on menthol cigarettes, according to a Washington Post report. The administration is expected to propose a ban on menthol and other flavors in mass-produced cigars, the newspaper said, citing people familiar.
In congressional hearings, the CEOs of big tobacco have told congress they are struggling to reduce nicotine in their products because they keep running into patents held by XXII, and the company won’t share their process.
XXII owns or controls the rights to commercialize over 200 issued and pending patents. In a February letter to shareholders, the company stated: “ 22nd Century is in a very enviable – and near a standalone – position to capitalize on the global combustible market that is valued at more than $700 billion annually. Having the only combustible cigarette with a modified exposure claim authorized by the FDA would serve as a catalyst for 22nd Century’s commercial sales, as achieving even 0.25% share of the U.S. tobacco market would result in a substantial increase in revenue and market capitalization for the company.
XXII is in the driver’s seat when it comes to cigarettes without nicotine.
XXII has a current market cap of $668 million with 6% of the float short. Insiders own 5% of the company.
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 look at hundreds of small caps to buy each week trying to find 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.