Closed borders, Fed rate cuts, and many more major developments in the fight against coronavirus set the markets up for another week of major volatility. The economic toll that the virus is expected to take on countries around the world led to a breakdown in previously safe blue-chip stocks but has presented a great opportunity for investors willing to take a risk on penny stocks.
Penny stocks trade for $5 and under, and they’ve become niche leaders in the coronavirus market, whether they’re actively involved in working on treatment or in a secondary service that has experienced some unexpected boost in recent weeks. Here, we’ll take a look at five of the best performing penny stocks on Monday, March 16.
Top 5 Penny Stocks to Buy Right Now: Antero Resources (NYSE:AR)
Antero Resources is an oil and natural gas company engaged in the exploration, development, and production of natural gas, natural gas liquids (NGLs), and oil properties located in the Appalachian Basin, which produces more natural gas than any OPEC nation. Headquartered in Denver, Colorado, Antero has low cost, liquids-rich drilling operations in two of the premier North American shale plays, the Marcellus and the Utica shales, and is the most integrated NGL and natural gas business in the US due to its market-leading firm transportation portfolio.
Amid a bloodbath on all the major exchanges, AR stock is in the green this morning, and that’s because the perfect storm is brewing for natural gas producers. Supply of natural gas is currently at a seasonally low point, and producers aren’t incentivized to up production because oil prices are at their lowest point since 2016. As oil prices drop, so do gas prices, and they’re currently more economically viable than coal, not to mention better for the environment. As coal users are now expected to transition to gas, there will be a positive supply/demand imbalance next winter.
AR stock is currently trading at $1.27, having sunk to an all-time low of $1.04 on March 11 before a huge spike in trading volume sent the stock up over 20% to see out the week.
Top 5 Penny Stocks to Buy Right Now: Inseego (NASDAQ:INSG)
Inseego is one of the most pioneering firms in the development of 5G. The California-based company is focused on developing intelligent IoT device-to-cloud solutions that enable high-performance mobile applications for large enterprise verticals, service providers, and small-to-medium businesses around the globe. Inseego has partnered itself with one of the most critical firms to 5G, Qualcomm (NASDAQ:QCOM), which manufacturers the Snapdragon processor, the chip used in the vast majority of Android and iOS mobile devices.
Right now, 5G stocks are very much a case of buy the dip, sell the rip. INSG started 2020 by rocketing to a peak valuation of $9.60 in mid-January before the outbreak of the coronavirus dragged it back down below the $7 mark. The stock then climbed back towards that peak in February before buckling as markets entered bear territory last week, dropping over 50% to a low of $4.12 on March 12.
Since then, INSG has recovered around 16% of its value but still looks really undervalued at $4.64. 5G is the future of communication, and the coronavirus outbreak may be a good thing for the demand of 5G internet in major cities as more companies require employees to work from home. In fact, INSG currently has a price target of $8.25 based on six analysts surveyed by TipRanks, which represents an upside of over 70% off its current price.
Top 5 Penny Stocks to Buy Right Now: Valhi Inc (NYSE:VHI)
Valhi is a holding company that has operations in three segments—chemicals, component products, and waste management. The company’s chemical segment is operated through Kronos Worldwide, Inc., which is a global producer and marketer of titanium dioxide pigment (TiO2). TiO2 is used in the manufacturing of products such as paints, plastics, paper, inks, fibers, foods, pharmaceuticals, and cosmetics. In particular, high-performance grades of TiO2 are finding a growing market in the cosmetics sector, and it is used in almost every brand of toothpaste.
VHI stock has fluctuated between $1.80 and $2.00 for the majority of 2019, before sinking to a low of $0.87 last week amidst the coronavirus-spurred market meltdown. However, the stock has bounced over 20% today on triple the average trading volume as speculators recognize the upside in this pick. For investors in Valhi, the company has three things going for it, the first of which is profitability. Secondly, TiO2 prices have been on the rise for the last two years and are expected to keep growing. Lastly, VHI pays a steady dividend quarter after quarter.
Top 5 Penny Stocks to Buy Right Now: Mustang Bio (NASDAQ:MBIO)
Mustang Bio is a clinical-stage biopharmaceutical company focused on developing potential cures for hematologic cancers, solid tumors, and rare genetic diseases, using the latest developments in cell and gene therapies. MBIO’s share price is actually down by 50% since the start of the year, but Cantor Fitzgerald’s Kristen Kluska believes a turnaround is very likely as she sees “no fundamental reason outside of overall stock pressure related to COVID-19,” for the pullback.
Mustang has a number of potential therapies in its pipeline, the most promising of which is a treatment for XSCID, commonly known as “bubble boy” disease, a rare genetic condition that results in a severely impaired immune system. Kluska sees great potential in this treatment, judging by a trial concluded last year:
“All patients from the St. Jude trial, presented at ASH 2019 remain alive, up to the age of 39.9 months. We believe this echoes the FDA comments that a drug may be clearly showing effect if survivability trends are observed in even just a few patients… We believe a current market cap of ~$130 million does not reflect the potential of Mustang’s pipeline[…]”
MBIO shares are currently trading for $2.24, up 10% from a recent all-time low of $2.05 at the close of trading last week, suggesting now may be the ideal time to buy the dip.
Top 5 Penny Stocks to Buy Right Now: Heat Biologics (NASDAQ:HTBX)
Heat Biologics is a biopharmaceutical company developing immunotherapies designed to activate a patient’s immune system against cancer and other diseases using its proprietary gp96 platform to activate CD8+ “Killer” T-cells. Those projects are on the backburner for the minute after the firm announced that it engaged a government relations firm, PACE LLP, to help it advance collaboration efforts and to secure government funding for a potential coronavirus vaccine.
On Monday, the company said that it had accepted an invite to join the Alliance for Biosecurity, a DC-based coalition of pharmaceutical and biotechnology companies that works to ensure medical countermeasures are available to protect public health and improve the prevention and treatment of severe infectious diseases, including coronavirus.
Heat has been one of the most volatile penny stock movers over the last two weeks. Shares have jumped from lows of under $0.20 to highs of more than $1.20 in just a few short days. At the close of last week, HTBX stock finished out the week at $0.47 but shot up almost 15% on Monday to currently trade at $0.53 following that coronavirus announcement.
The Bottom Line
These are strange days indeed. Not many investors will have experienced an environment so volatile and uncertain to invest in, not even in the midst of the 2008 financial crisis. Suddenly, stable blue-chip investments are no longer a source of risk-free, steady gains, which means some smaller penny stocks may now offer ample opportunity for speculators to capitalize on potentially undervalued gems.
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