The pandemic did a lot for penny stocks. It also completed rewired the way people look at the stock market today. Sure, you’d always have your small set of retail traders and gunslingers flipping cheap stocks. But last year brought a whole new meaning to the term “penny stock.” Based on the simple definition, these stocks are those trading for less than $5 & what the global shutdown did was make penny stocks out of some of the largest companies. It also put many completely out of business. Look at Hertz Rental (OTC: HTZZ). Prior to everything shutting down, the car rental stock was trading “happily” above $20. In the depths of the massive H1 2020 sell-off, shares dropped as low as $0.40.
Hertz stock wasn’t the only one to fall victim and become one of the stocks under $5. Ford Motor Co. (NYSE: F) also plummeted from over $9 to under $4. Popular meme stocks like AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME) also fell on hard times. The list goes on, but the focus here is that it was a sweeping dip, not one that impacted only a few companies.
As a result, those heavily invested in these stocks had to become familiar with penny stocks or cut their losses immediately. On the other hand, it also brought plenty of interest from brand new traders who had never touched stocks in their lives. Armed with fresh stimulus money and extra time, these former industry titans became a core focus and have since been coined “epicenter stocks.”What Are Epicenter Stocks?
Originally brought to light by famed analyst and investor Tom Lee of Fundstrat, he jumped on this trend early. The flag was planted in all stocks involved in industries negatively impacted by the pandemic. Lee’s thesis was that the companies hit hardest could recover the quickest in light of a vaccine and economies restarting. If you look at many of these former epicenter penny stocks, that thesis was correct. Aside from meme stocks, you’ve also got others like Party City (NYSE: PRTY), Nautilus (NYSE: NLS), and Chico’s FAS (NYSE: CHS), for example, demonstrating the big rebound after economies began restarting.
Now that we’re well into the year and things have been reopening for months, are there still “epicenter penny stocks” to watch right now? In my opinion, yes, and it could be somewhat of a hybrid between pre-pandemic trends like retail & energy to 2020 trends, including new means of entertainment & sports. While some 2020 trends will likely fade, others have been amplified.Epicenter Penny Stocks To Watch: Tech
Tech isn’t necessarily an “epicenter” industry only. Clearly it has helped lead markets higher for decades. But the novel products being developed over time have remained a core point of interest for investors. With the pandemic shutting things down, this industry actually was able to flourish.
It wasn’t just new smartphones, tablets, or software but how we engaged with one another. Companies like Zoom Video (NASDAQ: ZM) and Teladoc Health (NYSE: TDOC) flourish. We also saw different forms of entertainment evolve, including how we watch sports. This is where things like Esports have come to the forefront a bit more. New interest has begun focusing on this lesser-known segment of sports & entertainment.Esports Penny Stocks
There has been a flood of new interest in the industry since 2015. Just slightly more than 800,000 people had heard about it at that time. These numbers soon changed, right now, Newzoo* finds that nearly 2 billion people are well aware of the industry itself with over 660 million making up the active live streaming audience. Now you’ve got companies like Alpha Esports Tech (CSE:ALPA)(OTC:APETF) gaining interest.
The 2021 public debut of Alpha implemented a multi-pronged approach that includes esports, mobile gaming, e-commerce & even tokenization. Its portfolio is built on the backbone of revolutionary products like its GamerzArena, setting the stage for a new type of competitive experience. According to the company, the product boasts over 100,000 active users and a rapidly evolving ecosystem. This is not just a company that’s hosting tournaments…unlike the vast majority of early esports companies in the stock market today, Alpha fosters a community and builds a unique ecosystem that appeals to everyone from a novice gamer to a professional esports superstar.
Aside from members’ eligibility to become GamerzArena+ members (at $12.99/ month per member), new partnerships have also presented Alpha with sponsorship revenue, additional user acquisition, and future collaboration. This also includes potential opportunities for things like esports betting. According to Market Insight Reports**, the global esports betting market size is expected to gain market growth in the forecast period of 2020 to 2025, with a CAGR of 13.1%.
Other companies like FansUnite Entertainment Inc. (CSE: FANS)(OTC: FUNFF) focusing on wagering. The company signed an agreement with Money Line Sports to make Money Line an approved white label partner and operator of the FAN’s licensed wagering platform. “The new digital betting portal will showcase FansUnite’s advanced gaming applications that will be equipped with Money Line’s top-tier streaming media solutions and robust sports content, resulting in a synergy that can capitalize on the betting interests of football fans and bettors,” said Scott Burton, CEO of FansUnite.Connected Technology Penny Stocks
Aside from newer things like Esports, you’ve also got legacy “unicorn” industries like connected tech. This has ranged in anything from communications to blockchain technology. Veon Ltd (NASDAQ: VEON), for example, provides connectivity and internet services. In Pakistan, its operating company, Jazz, recently secured a roughly $320 million syndicated credit facility from a banking consortium led by Habib Bank Limited. This facility will finance the company’s ongoing 4G network rollouts and technology upgrades, among other things.
On the flip side of communications connecting people, you’ve also got the world of digital currency and blockchain technology. In this case, cryptocurrency mining stocks like Hut 8 Mining (NASDAQ: HUT) have gained interest in the market. The company is a digital asset miner, which includes bitcoin. Hut’s focus on meeting certain ESG standards and environmentally friendly operations has helped it gain some added interest. The recent concern, especially when it comes to Bitcoin mining, is the level of energy usage needed & how that could impact the environment. This week the company bought 12,000 new MicroBT miners planned for deployment by the end of the year.
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“We are excited to have identified this unique opportunity to purchase MicroBT equipment that will enable us to almost double our hashrate before the end of the year and substantially increase the number of Bitcoins earned on a daily basis,” remarked Jaime Leverton, Chief Executive Officer of Hut 8 Mining.Epicenter Penny Stocks To Watch: Energy Penny Stocks
Energy is another hot topic when it comes to the reopening trade. You’ve got your green and alternative energy conversation building momentum, of course. The Biden Administration’s stance on a carbon-neutral infrastructure and additional green energy spending has helped five related stocks a boost. But you can’t ignore traditional energy resource companies.
At least in the near term, oil and natural gas will be needed to help fuel the equipment & industrial processes needed to create this brand new infrastructure. This is where we see companies involved in everything from oil and gas production to transport becoming a focus in 2021. Here’s a list of penny stocks that’ve gained ground and where they fall in this epicenter niche:
|Transocean Ltd||(NYSE: RIG)||Offshore contract drillin|
|Kosmos Energy||(NYSE: KOS)||Deepwater exploration & production|
|Gran Tierra Energy||(NYSE: GTE)||Oil & gas exploration|
|Barnwell Industries||(NYSE: BRN)||Oil & gas exploration, dev., sales|
You can’t have a list of epicenter stocks without listing a few retail penny stocks to watch. While the likes of some of the ones mentioned above now trade outside of the penny stock range, there are still others that haven’t climbed to those heights as of now.
Clearly, retail is broad, but there are a few names that come to mind. First, luxury brands have taken a focus as consumers have come out of hibernation with fresh capital. Jewelry companies like Birks Group (NYSE: BGI) have gained attention in the market. Birks operates jewelry stores across Canada. As of June 30, 2021, the company said it operates twenty-nine retail stores. It also has its fine jewelry collections available through other companies in the UK and US, including Mayors Jewelers and SAKS Fifth Avenue locations. This week Birks announced that it opened all of its Canadian stores, helping give it a boost in the market.
You’ve also got other types of “luxury items” such as pet products. Companies like Dogness Corporation (NASDAQ: DOGZ) have gained some interest over the last few months. The company develops and manufactures branded and private label pet products. This month, Dogness announced that its products would be featured in Costco’s New Little Rock, Arkansas, and Moore, Oklahoma stores. This week the company reported another big update with the addition of 3 new distributors. Dogness said this was to meet its growth led by sales of its intelligent pet products and traditional product portfolio.Are Epicenter Penny Stocks on Your List?
When it comes to this epicenter trend, the idea behind it is simple. The stocks to watch and sectors to note are broad and left open to interpretation in some cases. Regardless, as the world reopens, it might not hurt to have a few reopening penny stocks on your list right now.Pursuant to an agreement between Midam Ventures LLC and Alpha Tech INC Midam has been paid $300,000 for a period from February 12, 2021, to April 2, 2021. We may buy or sell additional shares of Alpha Tech INC in the open market at any time, including before, during, or after the Website and Information, to provide public dissemination of favorable Information about Alpha Tech INC. Now extended to 6/30/2021 & no additional compensation of any kind has been received by MIDAM. Click Here For Full Disclaimer.
**Market Insight Reports Esports Betting Market Size: https://www.marketwatch.com/press-release/latest-study-explores-the-esports-betting-market-share-trends-growth-and-forecast-2025-2021-03-01