February was definitely an interesting month for penny stocks. My guess is as March begins, investors hope that it will have a much better start than how this month ended. To categorize February, we have to consider all that has happened in the past twelve months. While most stock market factors take time to unfold, such as inflation, investor fear has managed to come in quite quickly.
Whether this fear is due to the pandemic, long-term economic impacts from Covid, or the new influence of retail traders, it is palpable. So you might be asking yourself, what does this mean for investing in penny stocks? Well, if you have invested or traded these low-priced stocks before, you are probably quite used to volatility.
And as luck would have it, volatility is most likely here to stay. But, with dropping Covid cases around the world and favorable signs from the Fed, the hopes are that this volatility can soon turn in favor of the bulls. February was not a month to remember. While it started positive, many securities dropped greatly in value over the last two weeks.
But have no fear. This seems to be a result of a market pullback rather than a looming recession. Because prices have inflated so heavily in the past three to four months, many investors expected a small price correction. With this, it could be the time to find stocks at lower prices, however. So with that in mind, here are three penny stocks that traders rallied behind late this week. Are they the kind to BTFD, or should you avoid them entirely?Penny Stocks To Watch Next Week
- Opko Health Inc. (NASDAQ: OPK)
- Vistagen Therapeutics Inc. (NASDAQ: VTGN)
- Streamline Health Solutions Inc. (NASDAQ: STRM)
At almost $5 per share as of late February, OPK stock is almost out of penny stock territory. But in the meantime, let’s take a closer look at the biotech company. Opko Health is a medical test, and medication producer focused on both diagnostics and pharmaceuticals. One of its main driving sources of revenue in the past year has been the production of Covid tests.
- 3 Penny Stocks Turning Heads Before March But Are They A Buy Now?
- Penny Stocks Aren’t Something You Should Avoid & Here’s Why
Only a week ago, the company announced its Q4 2020 financial results. Despite these results being well above expectations, shares of OPK have yet to see a major rally from it. In the report, OPK brought almost $495 million in revenue, representing a 121% jump over the previous year’s same quarter. With estimates coming in at $43 million, OPK demonstrated its ability to grow. Also, net income came in at around $32 million.
As stated earlier, the main driver behind these results is the company’s diagnostics sector. This area alone shot grew in revenue by around 157% year over year. This specifically relates to the amount of covid tests that the company is producing. There was also a significant amount of insider activity late in February. With this, will OPK be one of the names on your list of penny stocks to watch next week?#2: Vistagen Inc.
Vistagen Inc. is a penny stock that we have covered many times in the past few months. With several trading days of double-digit percentage gains, VTGN is constantly on traders’ radars. The biopharmaceutical company works as a specialist in producing drugs to combat a variety of diseases. This includes CNS diseases where it has several compounds currently in its pipeline.
A few weeks ago, the company posted its fiscal Q3 2021 financial results. Shawn Singh, CEO of Vistagen, stated that “Calendar 2020 was transformative, highlighted by closing a PH94B partnership, a positive meeting with the FDA regarding key aspects of the study design for our upcoming pivotal Phase 3 studies of our PH94B nasal spray in social anxiety disorder, and during the most recent quarter, closing a $100 million financing.”
Singh goes on to state that “we believe we have sufficient capital to fund all of our currently planned nonclinical and clinical studies across our pipeline.”
Vistagen has also been on the radar of analysts as well. Jefferies initiated its coverage with a Buy rating on “upside potential” for its anxiety drug. Analyst Andrew Tsai explained that the company’s lead asset, PH94B, a fast-acting nasal spray “had compelling Phase II data and could become the first FDA-approved treatment” for acute social anxiety disorder.#3: Streamline Health Solutions Inc.
While Streamline Health Solutions is considered a biotech penny stock, it is not a traditional one by any means. The company operates more like a tech business working in the healthcare sector. It provides pre-bill revenue solutions for a large range of healthcare providers. This includes its eValuator Revenue Integrity Program.
Think of it as a sort of back-end application that allows healthcare operations to improve services and financial performance. STRM came into the spotlight on Friday, February 26th, upon announcing an upsized offering of common stock. The company states that it expects to receive roughly $14 million in gross proceeds from the offering. This comes only a few weeks after it announced a large contract with the Western New York Health System.
With this funding, the company has earmarked the new money for working capital, among other things. As Covid cases continue to come about worldwide, the emphasis on healthcare has never been higher. Because of this, it looks like Streamline Health could be an example of being in the right place at the right time.
In its pipeline, the company also offers many solutions to the common needs of the healthcare system. This means that demand could remain consistent in the foreseeable future. As a non-biotech biotech company, Streamline offers a different value point than some other biotech penny stocks. Whether this makes it a penny stock to watch is up to you.