As a whole, penny stocks are very risky. After all, there is a reason why their share prices are so low. Many of the companies in this risky part of the market are destined for bankruptcy. Members of the Reddit crowd and the day trading community are learning that now, as many penny stocks are in freefall.
Most penny stocks are not followed by the Wall Street brokerage firms. Some of these companies don’t have good products, and the brokerage firms would not recommend that their clients invest in them.
However, the following seven companies may be different. These companies are followed closely by Wall Street. This means that the Wall Street firms analyze them, attempt to value them and produce research about them. The general consensus of the brokerage firms is that these stocks should be bought. These companies are currently undervalued and they are all rated as buys
Of course, there is no guarantee that they will survive. But there is a good chance they do better than companies that Wall Street doesn’t follow.
If Wall Street follows the companies, there is a chance that the big investment funds may one day take their advice and invest in them. This will drive the share price higher.
- ION Geophysical Corporation (NYSE:IO)
- Fortress Biotech, Inc. (NASDAQ:FBIO)
- Pixelworks, Inc. (NASDAQ:PXLW)
- CTI BioPharma Corp. (NASDAQ:CTIC)
- Synlogic, Inc. (NASDAQ:SYBX)
- Energy Focus, Inc. (NASDAQ:EFOI)
- Abeona Therapeutics Inc. (NASDAQ:ABEO)
Penny Stocks: Ion Geophysical Corporation (IO)
ION Geophysical provides big data and data-driven solutions to offshore energy companies and ports. It also provides solutions to other industries worldwide. It has two segments, E&P Technology & Services and Operations Optimization. The company used to be known as Input/Output, Inc. but it changed its name in 2007. The original company was founded in 1968 and is headquartered in Houston, Texas.
As you can see on the above chart, in February shares traded above $5. But since then they have trended lower. They are currently trading around the $2.2 level. However, if Wall Street is right shareholders who have a long-term timeframe will be rewarded.
This company is followed by two of the Wall Street research firms. Oppenheimer and H.C. Wainwright each have buy ratings on it. The average target price is $10 a share. That is about 450% higher than where the shares are currently trading.
Fortress Biotech, Inc. (FBIO)
Fortress Biotech is a biopharmaceutical company. It develops and sells dermatology pharmaceutical and biotechnology products. It was incorporated in 2006 and is based in New York, New York.
Like most Biotech stocks, shares of this company are very volatile. As you can see on the above chart they were targeted by the Reddit crowd and days traders. Earlier this month they spiked over the $6 level. However, they have since given back a good part of its gains and are currently trading around the $4 level.
But if Wall Street is right, patient shareholders will be rewarded in the long run.
This company is followed by three of the Wall Street research firms. Cantor Fitzgerald, H.C. Wainright, and Roth Capital all have it rated as a strong buy. The average target price is $11.60 per share. This is almost three times higher than the current level
Penny Stocks: Pixelworks, Inc. (PXLW)
Pixelworks develops and markets semiconductor and software solutions. The company sells video display processor products. These include embedded microprocessors, digital signal processing technology, and software. It has an intellectual property portfolio of 338 patents that are related to the visual display of digital image data. The company was incorporated in 1997. It is based in San Jose, California.
In early 2018 shares of PXLW stock reached $7 a share. Since then they have been in a downtrend. As you can see on the above chart, in February they jumped higher when the day trading crowd targeted it. But they have given back all of their gains and are currently trading around $3.
But in the long run, Pixelworks shareholders may be rewarded. Only two of the Wall Street research firms follow this company. However, they each have it rated as a buy. The average target price is $5 per share. This is significantly higher than the current price.
CTI BioPharma Corp. (CTIC)
CTI BioPharma is a biopharmaceutical company. It focuses on buying, developing, and commercialization of therapies for blood-related cancers. The company was formerly known as Cell Therapeutics. In May 2014 it changed its name to CTI BioPharma Corp. The original company was founded in 1991. The headquarters are in Seattle, Washington.
As you can see on the above chart, shares jumped from $1 to $3.50 in just one week back in early October. This was due to some news that was related to the companies research was positive. From October through March the shares traded sideways. Since then they have been trending lower. But if shareholders remain patient, they may be rewarded.
This company is only followed by one of the research firms. Brookline Capital has the stock rated as a strong buy. The target price is $6.90 per share. This is almost 300% higher than the current price.
Penny Stocks: Synlogic, Inc. (SYBX)
Synlogic is a clinical-stage biopharmaceutical company. It focuses on the discovery and development of medicines to treat cancer and metabolic and inflammatory diseases. It is headquartered in Cambridge, Massachusetts.
As you can see on the above chart, shares found support at the $3 level on Friday.
They also found support at that level in early March. A rally followed. By the middle of March, they had reached the $4.50 level. But the analysts who follow this company believe that in the log-term the share price will soar significantly higher.
This company is well followed by Wall Street. There are at least six firms that analyze it and produce research on it. The consensus rating of these forms is a strong buy. The average target price is $15 per share. That is about four times higher than the current price.
Energy Focus, Inc. (EFOI)
Energy Focus designs, develops, manufactures, markets, and sells energy-efficient lighting systems. It was founded in 1985 and is headquartered in Solon, Ohio.
Back in August shares of EFOI traded above the $10 level. As you can see on the chart, by December they had dropped to the $4 level. After ripping higher to around $7 because of the Reddit crowd, they have given back their gains. They are currently trading around $4 once again. However, there is a chance that the shares will return to those price levels once again before too long.
H.C. Wainwright is the only brokerage firm that follows this company. They are extremely bullish on its prospects. They have it rated as a strong buy with a target price of $11 a share. This is almost three times higher than the current price.
Penny Stocks: Abeona Therapeutics Inc. (ABEO)
Abeona Therapeutics is a clinical-stage biopharmaceutical company. It develops and sells gene and cell therapies for life-threatening rare genetic diseases.
It was formerly known as PlasmaTech Biopharmaceuticals but it changed its name to Abeona Therapeutics Inc. in June 2015. The original company was founded in 1974. The headquarters are in New York, New York.
As you can see on the above chart, the stock was targeted by the day traders. For no reason other than it is a penny stock, shares doubled between February and March. They have since given back most of the gains but there may still be better times ahead.
Abeona Therapeutics is followed by three of the Wall Street brokerage firms. All three are bullish on the company’s long-term prospects. Each has a strong buy rating on the shares. The average target price is $8 per share. That is about 530% higher than where they are currently trading.
At the time of this publication, Mark Putrino did not have any positions (either directly or indirectly) in any of the aforementioned securities.