Whether you call them reopening stocks, epicenter stocks, or just penny stocks, certain businesses could benefit from things “getting back to normal.” But that will eventually figure itself out as the year progresses and we see what comes next in the coronavirus saga. Needless to say, “we are here” and as traders, it’s important to consider emerging trends in the market. Right now, reopening stocks are gaining steam especially as talks heat up for a COVID-19 vaccine candidate.
What are “epicenter stocks” or “reopening stocks”? The term was initially coined by market analyst and FundStrat Head of Research, Tom Lee this year. His take on these stocks is simple. Basically, epicenter stocks are ones that have taken the brunt of coronavirus selling pressure and could be positioned for bigger momentum once the economy starts to reopen. Lee said industrials, technology stocks, health care stocks, and energy stocks, for instance, could fall into this category.
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Now, it’s important to also understand that when the economy gets back to some normalcy, things will likely be different. For this reason, we can’t discount the new normal also including things like regular coronavirus testing.
We also can’t discount things like consumer cyclicals or travel stocks and sympathy trades stemming from them. However, just because Lee focuses on more “blue chip” types of companies doesn’t mean penny stocks can’t fall under the umbrella. With this in mind, are any of these on your list of epicenter penny stocks to watch this month?Epicenter Penny Stocks To Watch: Hancock Jaffe Laboratories, Inc.
Hancock Jaffe Laboratories, Inc. (HJLI Stock Report) is a developer of medical devices. Back in early August, we started to follow developments from Hancock as it had regained compliance with Nasdaq. The company was also gaining attention regarding a proposed merger announced in June. Hancock signed a non-binding letter of intent to merge with Catheter Precision, Inc., a private medical device company focused on cardiovascular diseases, including heart arrhythmias.
Last month, Hancock Jaffe announced that it has enrolled the first two patients for its first-in-human CoreoGraft study. This is the company’s bovine-tissue-based off-the-shelf conduit intended for use in coronary artery bypass surgery. For this study, the CoreoGraft conduit is being used as a substitute for saphenous vein grafts in these patients. What’s more, is that Hancock said the first implant of the CoreoGraft conduits will “take place in the coming weeks”.
What’s important to note is that there haven’t been any new updates this week. The most recent development was initiated coverage on the stock by certain analysts. Specifically, Ladenburg Thalmann started covering HJLI stock with a Buy rating as well as a $2.10 price target. Whether or not this has something to do with the recent surge on Wednesday is to be seen. However, when it comes to finding epicenter penny stocks to watch, healthcare/biotech is likely an interest.Epicenter Penny Stocks To Watch: AutoWeb, Inc.
AutoWeb, Inc. (AUTO Stock Report) was a strong penny stock to watch this quarter. AutoWeb is a digital marketing company for the automotive industry. The company helps automotive retail dealers and automotive manufacturers market and sell new and used vehicles to consumers through the company’s programs for online lead and traffic referrals. If there’s one thing that’s been hot right now it’s been eCommerce; another facet of epicenter stocks.
For AutoWeb, the biggest focus has come over the last few weeks. Mid-August was when we put more of a focus on AUTO stock. Shares were trading under $2.30 and the company had just reported preliminary results for July. Results showed lower July revenues in 2020 compared to 2019. However, gross profit and gross margin were both higher as well as the posted net loss and adjusted EBITDA.
Jared Rowe, President and CEO of AutoWeb. “Our improved results over the past several months are further evidence of the strength of our turnaround. Gross margin has continued to hold above 35%, and we generated positive cash flow and adjusted EBITDA in both June and July. In fact, we drove a higher level of adjusted EBITDA in July than we did for the entire second quarter.”
Since then we’ve seen AUTO stock explode to highs of nearly $6. After some recent consolidation, shares are back on the move this week. AUTO stock has begun climbing on Wednesday without any apparent catalyst so far. Is this simply the next leg of AUTO stock’s longer-term move?Epicenter Penny Stocks To Watch: Pacific Ethanol, Inc.
No list of epicenter stocks would be complete without at least one energy company. Pacific Ethanol, Inc. (PEIX Stock Report) is a producer and marketer of high-quality alcohol products and low-carbon renewable fuels in the United States. We first started tracking this company in December of 2019 believe it or not. At the time PEIX stock traded around $0.60 and the company had just gotten an extension on a loan from its lenders. Earlier this year, PEIX dipped with the rest of the market in March and has since been on a massive uptrend.
Pacific owns and operates several ethanol production facilities across Western and Midwestern United States. Last month the company reported its Q2 results, which helped continue fueling 2020’s big move. Pacific Ethanol reported better than expected results for the quarter beating on both EPS and Sales. Wall Street anticipated an EPS loss of $0.20 but Pacific came in with an EPS gain of $0.27. Adjusted EBITDA also experienced a strong increase. Compared to the same quarter last year – $7.2 million – Q2 2020 saw this figure come in at $28.8 million.
Heading into September, Pacific Ethanol presents at the H.C. Wainwright Global Investment Conference next Tuesday. Aside from that, it’s been more speculation on reopening stocks that has driven momentum. Considering that more travel could boost the demand for ethanol as a fuel is that enough to suggest PEIX stock remains one to watch this month?Epicenter Penny Stocks To Watch: Aspira Women’s Health Inc.
Aspira Women’s Health Inc. (AWH Stock Report) was a huge mover earlier this year. Shares ran from around $0.60 in March to highs of $5.78 by June. During the second half of August, AWH stock was cut down after the company released its Q2 results. A lot of the concern stemmed from a big drop in sales, year-over-year even though EPS loss came in much better this year.
“Despite late first quarter and second quarter challenges from COVID-19, we have delivered strong revenue and volume growth in the first half of 2020 as compared to the first half of 2019. In fact, our test volume was 12% higher in the first half of 2020 than in the same period in 2019. Delivering surgical triage results to physicians during this period of operating room rationing and backlog is essential,” said Valerie Palmieri, Chief Executive Officer of ASPIRA.
The company offers testing options and bio-analytical solutions to “improve gynecologic health outcomes” for women. Its OVA1(R) plus combines its FDA-cleared products OVA1(R) and OVERA(R) to detect risk of ovarian malignancy in women with adnexal masses. Next week the company presents at the Cantor Virtual Healthcare Conference.
However, there haven’t been any other developments announced besides that. Needless to say, AWH stock is surging this week, jumping from $2.76 on Tuesday to highs of more than $3.50 on Wednesday. We’ll have to see if there are any further updates to follow. Wednesday’s trading volume is some of the highest it has seen this quarter.