Investors seem to be increasingly open to risk during these unique times. At least, that seems to hold true for the retail investors who seek Robinhood stocks to buy.
Stock picks which might not pass muster in calmer times, now do. That’s because there’s more action and coordinated user efforts can sway momentum.
The stocks on this list are certainly worth a look because they possess what look to be reasonable, strong catalysts. At the same time, they are inherently risky. The point here being that any investor should consider their risk appetite before diving into these equities headlong.
Most of these companies will have attractive catalysts but less-than-ideal fundamentals. That’s the gamble in inexpensive stocks most of the time. If their respective catalysts bear out then their fundamentals will improve. The opposite also holds true. However, I believe these seven have a good case as stocks to buy right now.
- Senseonics Holdings (NYSEAMERICAN:SENS)
- Tonix Pharmaceuticals (NASDAQ:TNXP)
- Borr Drilling (NYSE:BORR)
- Castor Maritime (NASDAQ:CTRM)
- Cyren (NASDAQ:CYRN)
- Allied Esports Entertainment (NASDAQ:AESE)
- Superior Drilling Products (NYSEAMERICAN:SDPI)
Robinhood Stocks: Senseonics (SENS)
Senseonics is a Maryland-based company that is commercializing an implantable continuous glucose monitoring system for diabetes patients. Its brand, Eversense, includes a sensor, transmitter, and an app for tracking results. Senseonics’ website boasts that it has created the first and only long-term implantable continuous glucose monitor.
As a potential investor, the good news is that SENS stock seems to already have made a name for itself. It looks to have gained traction and is a name investors are talking about. Year-to-date SENS shares have risen from 93 cents to $3.29 on July 9. That’s well over 200% return within that period.
The gamble here is that the company can rapidly commercialize the Eversense brand. It isn’t a big company. First quarter revenues hit $2.85 million, and were primarily driven by EU sales. U.S. sales began on April 1, meaning SENS is very much an work-in-progress investment.
But the encouraging news is that the company announced strong study results on June 3. The study proved the accuracy of the Eversense monitor over a period of 180 days. That news sent share prices to a new plateau above $3, where it has stayed since.
The true litmus test will be to keep an eye on the company’s sales stateside in the coming quarters. Positive news in that regard will move share prices up rapidly.
Tonix Pharmaceuticals (TNXP)
Tonix Pharmaceuticals is a clinical-stage biopharmaceutical firm. And TNXP stock trades around $1. Both of these facts indicate that an investment in Tonix Pharmaceuticals is a risky proposition. That said, there’s plenty to like about it. The company develops treatments for central nervous system (CNS) and immunological conditions.
The company’s CNS therapies, if commercialized, aim to treat conditions including fibromyalgia, psychiatric disorders, migraines, substance abuse, and neurological disorders. Tonix began focusing solely on CNS therapeutics but has recently expanded into immunologics. It is now developing therapeutics that deal with smallpox, Covid-19, organ transplant rejection, and cancer.
The gamble here relates to the company’s lead candidate, TNX-102 SL. That candidate drug is being studied for use in four separate CNS indications. All four indications are in Phase 2 and Phase 3 status. The furthest along of which is TNX-102 SL for use against Fibromyalgia. That Phase 3 study began Sept 1, 2020, and will finish this August.
Given that Tonix Pharmaceuticals is a cheaply priced biopharma firm, you may have guessed that it is pre-revenue. If you did guess that, you were correct. In the first quarter it posted a net loss of $20.653 million. It didn’t sell anything, instead incurring large losses.
But, if those August results are positive those losses won’t matter a bit. I look at TXNP stock as a gamble on that news alone. As a gamble on TNX-102 SL, and its use against fibromyalgia, there’s a lot to like.
Borr Drilling (BORR)
Borr Drilling is a company that operates jack-up rigs. Jack-up rigs are oil drilling platforms that can be set up in water ranging from 30-400 feet in depth. The company maintains 28 such rigs which have the capability of drilling wells to a depth of 35,000 feet.
As you might imagine, BORR stock rises and falls with the demand for oil. Wall Street basically counted it out when the pandemic hit, and as a consequence prices declined sharply. Shares now trade around 80 cents. However, those same shares were trading at $8-$9 just before the pandemic. They were above $20 in late 2018.
I see positive signs present for BORR stock. Five of the company’s 28 rigs are under construction. That indicates it is certainly making an effort to capitalize on rising oil prices. It isn’t a 100% guaranteed proposition by any stretch of the imagination. But the upside is clear: Borr Drilling could find itself flush with revenues if its plan pans out.
It is raising capital for this purpose. On July 6 it announced that it is undertaking an at-the-market offering to raise up to $40 million. Potentially dilutive? Sure. But the other side of that coin is that the proceeds capitalize expansion efforts that, again, may bring in rapid revenues.
Castor Maritime (CTRM)
Let me start by saying that Castor Maritime is, in my estimation, by far the most speculative bet on this list of Robinhood stocks. The basic narrative here is that the shipping company can take advantage of an uptick in transportation volume while it simultaneously increases its fleet size.
If you search CTRM stock on this site you’ll find that most opinions of the stock’s prospects are negative. I’m on board with most of what’s being said.
InvestorPlace’s own Dana Blankenhorn summarized the issue well when he wrote that: “Castor Maritime solves a short-term problem by creating a long-term problem.” He was referring to the fact that the company is buying shipping vessels at a rapid pace to fill rising demand for shipping. Rising shipping demand may indeed prove to be a temporary spike attributable to pandemic-driven factors. In that case all of the debt incurred to finance those vessel purchases will create even larger problems.
But the opposite argument is at least worth exploring, if not investing in.
That argument is simply that Castor Maritime continues to profit from shipping demand as it most recently did. Then, in the longer term it fixes the issues recent financing has created. That’s a long shot, but at current prices it’s a somewhat reasonable bet. And investors who jump in now won’t have the dilutive effects of its reverse stock split to contend with.
Israeli cloud-based cybersecurity firm Cyren presents an interesting proposition given current prices. Its suite includes increasingly in demand products for secure email, malware, phishing, and cyber intelligence.
CYRN stock costs 70 cents a share but that low price isn’t for a lack of customers. After all, Cyren counts 1.3 billion users worldwide for its cloud security solutions.
Rather, the low price could be a product of revenues which are slightly down. In May, Cyren released Q1 earnings which showed that revenues had decreased to $8.8 million from $9.6 million a year prior. Even if revenues had risen by $1 million investors might not be particularly interested in CYRN stock.
But I believe the reason that investors should consider it – outside of how inexpensive it is — is its growth opportunity.
CEO Brett Jackson is clear about that potential: “Cyren continues to advance on our best growth opportunity – helping enterprise customers using Microsoft 365 mitigate phishing attacks”
A recent trade journal article indicates that phishing attacks are on the increase, having risen 47% between Q1 this year and last. CYRN stock only has one analyst covering it, calling it a “buy” with a $1.50 per share target price.
Allied Esports Entertainment (AESE)
E-sports is a word that conjures up a number of images. For some the idea that playing games can be considered a sport at all is laughable. That notion might bring images of loners to mind and lots of negative ideas about e-sports generally. That’s a reality hanging over Allied Esports Entertainment.
But the truth is that e-sports is a burgeoning market globally. Grandview Research estimates that the global market will witness compound annual growth rates of 24.4% between 2020 and 2027. Find the right opportunity within that rapid growth and money will flow.
That opportunity may indeed be AESE stock. The last time that I wrote about these shares, I noted that Allied’s financial situation, while not ideal, is safe: “Allied Sports Entertainment is very much still trying to find its footing in a financial sense. Revenues decreased 53% in Q1 and the company suffered a $5.0 million loss from continuing operations during the same period. But the company maintains an $18.5 million cash position meaning it is at little risk of going under. It is certainly among the riskier plays on this list, but the gaming and content angles mean it could quickly take off once it catches on and in-person gaming experiences return following the pandemic.”
Since then the company has launched an independent content development studio, AE Studios. It’s impossible to say whether that venture will prove fruitful. However, the junction of content and e-sports has so much upside that AESE stock now has another potentially massive tailwind.
Superior Drilling Products (SDPI)
It is no secret that investors are scrambling to capitalize on the recent rise in oil prices. Back in late June Barron’s reported that WTI crude oil was up more than 11% in the month prior. As WTI closes in on $75 prices investors will continue to be keen to understand how to play oil.
It’s fairly easy to pick an oil major stock like ConocoPhillips (NYSE:COP), with its buy rating, and ride it out. That’s a reasonable strategy, and I wouldn’t fault anyone for choosing to do so.
But what if you aren’t in the market for $60 per share stocks and you still want oil exposure? One strategy is to look at companies like Superior Drilling Products. It manufactures, repairs, rents, and sells oil & gas drilling tools. As drilling ramps up, Superior Drilling Products should sell faster.
As the oil market rebounds, SDPI stock’s prospects rise in kind. Q1 revenues increased 57% over Q4. And that was when oil prices sat between $50 and $60. Now those prices are $10-$15 higher. There’s plenty of upside in SDPI shares and their 80 cent price tag in this environment.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Gettting Scammed
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.