If there’s one group of penny stocks that has benefited most from a broader sector move, it’s tech. That only comes tightly behind biotech this year. Granted I’m talking specifically about penny stocks and not blue-chips, you can’t argue with all of the monster coronavirus breakouts we’ve seen this year. Regardless, the tech-heavy Nasdaq has demonstrated exactly what investors thing about tech stocks this year.
Given the fact that there have been lockdowns across the world, tech penny stocks have shined bright. You’ve got things like food delivery, eCommerce, online learning, and even telemedicine exploding onto the scene. With this in mind, you can’t help but think about which grouping of penny stocks will benefit next.
On Tuesday, Big Tech helped push the Nasdaq to new, all-time highs this week. Not only have they offered volatility in the market, but the businesses have also demonstrated their ability to succeed during these times of pandemic. Aside from “Big Tech” we can’t ignore “little tech” either.
These are the penny stocks of the group that either benefit from a “sympathy” trade scenario or corporate developments that become stand-alone catalysts. Of course, you understand what a stand-alone catalyst is. Sympathy trades are something a bit different. This is where smaller companies in a similar sector benefit from a big development. This might be a general industry update or news from one of the leading companies in that industry.
The thought is that if “the big company” did something big, then there might be smaller, cheaper stocks to buy that do the same thing or “could” do the same thing. Regardless, it’s good to be aware of instances like that. But I digress. In light of the recent momentum in tech, let’s look at a few tech penny stocks trading higher this week.Tech Penny Stocks To Watch #1: OneSmart International Education Group
OneSmart International Education Group (ONE Stock Report) shares were trading higher on Tuesday. The company announced its 3rd quarter of fiscal 2020 results. Now, before we dive into the details of that, let’s quickly touch on what OneSmart actually is. The company is a K-12 education company in China. Its brands included OneSmart 1on1 education, HappyMath, and FasTrack English, in addition to its OneSmart Online platform. OneSmart operates a nationwide network of 449 learning centers across 33 cities in China.
As of August 4th, OneSmart said that more than 90% of learning centers reopened. Cash sales for OneSmart 1on1 business recovered to grow by 29% and 25% year-over-year in July, and August-to-date 2020, respectively. Average monthly student enrollments for OneSmart 1on1 business reached 93,895 by August-to-date 2020, representing a growth of 13% from March 2020.
The company also reported net revenues for the fourth fiscal quarter of fiscal year 2020 are expected to be in the range of RMB900 million ($130,023,981USD) to RMB1 billion ($144,471,090USD). This represents a sequential increase of 21%-34% according to the company. Considering how beaten down ONE stock has been this year, this news appears to be bullish for the eLearning penny stock. Will that same momentum continue through August?Tech Penny Stocks To Watch #2: MOGU Inc.
Another Chinese company trending on Tuesday is MOGU Inc. (MOGU Stock Report). Shares of this penny stock saw an early morning surge that took it to highs of $2.95 before the end of the lunch hour. Similar to OneSmart, MOGU reported earnings-related information this week as well. While those earnings won’t come out until later this month, the market has reacted in a bullish fashion on Tuesday.
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Speaking of fashion, MOGU is a Chinese online fashion and “lifestyle” company. Specifically, the company’s online platform includes Mogu.com, Mogujie.com, and Meilishuo.com. Its platform allows people to discover and share fashion trends while fully enjoying the shopping experience. This could once again be an example of that “sympathy” style move. There’s no news nor are there any filings to speak of recently.
But what we can see is that shares of other Chinese internet stocks like Bidu, JD.com, and Alibaba are trading higher. Furthermore, this could be in anticipation of upcoming earnings from some of these other companies. Namely Alibaba reports its earnings in 2 days on August 20th. In the last reported quarter, the China e-commerce giant delivered an earnings surprise of 47.7%. Moreover, Alibaba has surpassed estimates in all the trailing four quarters, with an average surprise of 25.95%. Considering this “sympathy” will MOGU stock continue to hold this bullish trend at least into the second half of the week?(Bio)Tech Penny Stocks To Watch #3: Agenus Inc.
While this isn’t a typical “tech stock” it is a biotech penny stock to watch and one we’ve followed for a while; since March in fact. Agenus Inc. (AGEN Stock Report) shares continued its August uptrend on Tuesday. AGEN stock reached early highs of $4.23 as momentum pushed shares higher. Since the start of the month, AGEN has been one to track after its recent earnings results were published.
“We ended the second quarter of 2020 with a cash balance of $79 million as compared to $62 million at December 31, 2019. Subsequent to the quarter-end we received $35 million related to our Betta partnership. With this and other anticipated cash inflows, based on our current plans and projections our cash position will be sufficient to support our operations into the third quarter of 2021.”
About a week ago, there was some insider activity with this penny stock. If you look under the AGEN filings, you’ll see the August 14th FORM 4. CEO Garo Armen added to his current position, paying an average $3.71 per share at the time.
A big focus for the company is on its treatment pipeline. Its main target is immuno-oncology treatments. In the R&D update from earlier this month, Agenus CEO explained that an IND is expected to be filed “within the next six months” for its TIGIT monospecific antibody, AGEN1327. Also, its Fc enhanced bispecific TIGIT antibody, AGEN1777 is expected to have an IND filed “in the next six months”. Both of these are obviously something of note especially if AGEN is on your list of penny stocks right now.