The outbreak of the Coronavirus and its impact on the global economy has led to the Dow Jones closing down more than 700 points today as it heads towards correction territory, while the S&P 500 and Nasdaq were also down more than 10% from the record highs set earlier this month as investors fretted over the possibility of the coronavirus spreading in the US. However, not all stocks are a bloodbath this week, and two penny stocks have caught our eye for possible long-term gains once the COVID-19 outbreak is contained.
Penny stocks are valued at $5.00 or less, and they can often be a source of huge gains, or massive disappointment, depending on the right mix of timing, insight, and a little luck. Let’s take a look at two penny stocks on our radar today:
Mallinckrodt plc (NYSE:MNK)
Drugmaker Mallinckrodt spent much of 2019 in turmoil, pushed to the brink of bankruptcy as cases against the firm for its role in the opioid crisis began to pile up. This week, it was reported that the company had reached an agreement to resolve all cases against it for US$1.6 billion, protecting Mallinckrodt and its specialty brands-related subsidiaries from Chapter 11 bankruptcy. With the firm now free to move on from the crisis, Mallinckrodt could jump out of penny stock territory and back towards its 2018 value of around $30.
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Vaxart (NASDAQ:VXRT)
While the Coronavirus may be dragging down stocks almost the whole way across the board, it has actually worked to the benefit of a few firms. This penny stock is up a massive 615% in 2020 after the company announced that it had begun a coronavirus vaccine program. A previous flu study showed that its oral recombinant vaccine can protect through mucosal immunity. Sean Tucker, Chief Scientific Officer of Vaxart, specifically said that this is “a potential key factor when targeting mucosal pathogens such as this new coronavirus.”
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