U.S. markets struggled for direction this week, as a currency devaluation of the Chinese yuan, along with falling oil prices and even a whiff of inflation from CPI and PPI numbers, left Wall Street staring straight into a slew of headwinds.
There was no such resistance, however, among this week’s list of elite sub-$5 stocks. In fact, a few dozen cheap stocks across a number of sectors finished the week with gains of 20% or more.
We take a look at some of the hottest stocks in the small-stock universe, and why they were ahead of the pack:
Best Stocks Under $5: Eleven Biotherapeutics Inc (EBIO)
8/14/15 Closing Price: $4.71 (+84%)
Eleven Biotherapeutics Inc (EBIO) was one of the biggest winners on Wall Street this week after it reported that it had begun to administer EBI-005 in an effort to study the drug’s efficacy in treating moderate to severe allergic conjunctivitis. EBIO stock spiked by more than 200% that day before pulling back to more realistic levels.
Then on Wednesday, shares pulled even higher after Eleven reported a second-quarter loss of 36 cents per share, well better than the year-ago period’s loss of 51 cents.
Despite its big move this week, EBIO remains a highly speculative trade at this point. Revenues in Q2 were a mere $100,000.
Best Stocks Under $5: Comstock Resources Inc (CRK)
8/14/15 Closing Price: $2.75 (+59%)
Right behind EBIO this week was Comstock Resources (CRK), an American oil and gas exploration and production company. There was an unusual amount of insider buying this past week, seemingly taking advantage from CRK’s monster stock slide from $30 per share in 2014 to recent lows around $1. In fact, one insider recently accumulated almost $1.60 million worth of CRK stock at $1.10 to $1.25 per share.
After announcing earnings that beat the Street’s estimates last Friday, CRK stock stormed up this week. Comstock reported a Q2 loss of $1.11, better than estimates for a $1.18 loss. Of course, falling oil prices have weighed on the company; CRK earned 12 cents per share a year ago.
OptionMonster.com also reported this week that a large number of August and September puts with a $2.50 strike price were sold this week, suggesting that big option players were expecting CRK to remain above that level.
Best Stocks Under $5: Capnia Inc (CAPN)
8/14/15 Closing Price: $2.55 (+24%)
Capnia Inc (CAPN) is a tiny ($24 million) biopharma company that is involved in producing treatments for cluster headaches, allergic rhinitis and trigeminal neuralgia. Its therapeutic technology uses nasal, non-inhaled CO2 into the nasal cavity.
Capnia stock was up sharply this week, despite reporting revenue last week of only $97,000, while expending $1.2 million in research and development. Sales and marketing expenses were also quite high as well in relation to revenue gained.
Insider transactions also were noteworthy this week, as three different company executives bought 80,000 shares of CAPN stock.
Best Stocks Under $5: Applied DNA Sciences Inc (APDN)
8/14/15 Closing Price: $3.37 (+25%)
Applied DNA Sciences Inc (APDN) provides botanical-DNA-based anti-counterfeiting technology and product authentication solutions. APDN stock raced up the charts this week after the company reported third-quarter fiscal 2015 earnings. APDN suffered a net loss of $1.7 million, $200,000 better than the year-ago period, on revenue of $2.3 million, which was a new quarterly record for the company.
Applied DNA Sciences was recently selected as a “FiReStarter” company to be featured in October at the 13th annual Future in Review (FiRe) conference — one of the top technology conferences in the world.
APDN stock has come down from $10 a share at the beginning of 2014, and has been in a trading range between $3 and $4 for much of 2015.
Best Stocks Under $5: Atlas Energy Group LLC (ATLS)
8/14/15 Closing Price: $3.62 (+21%)
Atlas Energy Group LLC (ATLS) — a limited liability company that owns interests in several oil and gas manufacturers — surged this week after a precipitous 52-week drop that saw shares fall from $13 to $2 per share.
Shares have doubled in the past seven days, with this week’s 22% move coming in part on ATLS’ announcement that it has entered into a contract for a new term loan facility, which will expire in August 2020. The loan is a refinance of Atlas’ current term loan, but it also provides a new initial balance of $82.7 million.
As of this writing, Ethan Roberts does not hold a position in any of the aforementioned securities.
