Did you know that penny stocks are known for being risky, but at the same time have a high chance of reward? Does this make them the best chance to make money in the market? This all depends on you. Do you like to make money quickly since penny stocks can offer short-term returns of anywhere from 50% to 100%? Sure, it’s simple when it’s written down like this, but it might not always be so clear cut to figure out which penny stock will be the next big mover.
Penny stock trading is nothing to shake a stick at. You need to be confident and have a plan. These stocks, as the SEC defines as fewer than $5 a share, can have major swings that happen quickly and cause psychology to take a significant role. These equities, unlike your big-name stocks like Apple, Amazon, Alphabet, etc, are capable of returning triple-digit short-term returns. Knowing this is only 50% of the picture. The market can be volatile which means it might not be the worst thing to trade with a short-term game-plan.
Read More: Your Top 3 Penny Stocks To Watch This Monday
Hype, or the Fear Of Missing Out (FOMO), are a couple of situations you need to be on the lookout for. Sure, a major headline can bring serious momentum/buzz to a stock profile, but does that stock have other things going for it? Does its chart look good? Are its financials in order? With penny stocks, for the most part, a solid headline can do the trick to get it kick-started into overdrive, so here are a handful of companies that have recent, huge news out that could have them popping up on radars everywhere.
Your No. 1 Penny Stock To Watch Closely After A Major News Release: Fuwei Films (Holdings) Co., Ltd.
Fuwei Films (Holdings) Co., Ltd. (Nasdaq: FFHL), through its subsidiaries, develops, manufactures, and distributes biaxially oriented polyethylene-terephthalate films in the People’s Republic of China. The company offers dry film, which is used in circuit boards production, nameplate, and crafts etching; chemically treated films used to enhance properties, such as barrier resistance, printing properties, and electrostatic resistance; stamping foil base films and transfer base films for packaging of luxury items, including cigarettes and alcohol; and printing base films for use in printing and lamination.
It also provides metallized films or aluminum plating base films for use in vacuum aluminum plating for flexible plastic lamination; high-gloss films for aesthetically enhanced packaging purposes; heat-sealable films for construction, printing, and making heat sealable bags; and laser holographic base films used as anti-counterfeit films for food, medicine, cosmetics, cigarettes, and alcohol packaging; and heat shrinkable films used for special-shaped packaging for beverage and cosmetics. The company markets and sells its products under Fuwei Films brand for packaging, imaging, electronics, electrical, and magnetic products. It also exports its products to end-users and distributors primarily in Europe, Asia, and North America.
Fuwei Films (Holdings) Co., Ltd. announced its unaudited financial results for the first quarter of 2020 ended March 31, 2020.
First quarter highlights
- Net sales during the first quarter ended March 31, 2020 were RMB83.2 million (US$11.8 million), up from RMB81.1 million during the same period in 2019, representing an increase of RMB2.1 million or 2.6%.
- Sales of specialty films were RMB39.9 million (US$5.6 million) or 47.9% of our total revenues, up from RMB32.2 million or 39.7% in the same period of 2019.
- Our gross profit was RMB29.8 million (US$4.2 million) for the first quarter ended March 31, 2020, representing a gross margin of 35.8%, up from a gross profit of RMB12.4 million and gross margin of 15.3% for the same period in 2019.
- Net profit attributable to the Company during the first quarter ended March 31, 2020 was RMB13.0 million (US$1.8 million) compared to net loss attributable to the Company of RMB3.4 million during the same period in 2019.
Mr. Zengyong Wang, Chairman and CEO of Fuwei Films, commented, “Despite the oversupply in the marketplace and the outbreak of COVID-19 pandemic which has caused significant adverse effects on the world economy, we achieved positive trends in overall sales, especially sales of specialty films which accounted for 47.9% of our total revenues. In addition, we achieved net profit for four consecutive quarters. We believe these results benefit from our commitment to innovation and differentiated marketing strategy which have expanded the end-user applications of our films products. We will continue with these efforts and expect that they will enable the Company to capitalize on new opportunities despite challenging industry and economic conditions.”
Your No. 2 Penny Stock To Watch Closely After A Major News Release: Barnwell Industries, Inc.
Barnwell Industries, Inc. (NYSE American: BRN) acquires, develops, produces, and sells oil and natural gas in Canada. It operates through three segments: Oil and Natural Gas, Land Investment, and Contract Drilling. The company also invests in land interests in Hawaii. In addition, it owns and operates five water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; drills water and water monitoring wells of various depths; installs and repairs water pumping systems; and distributes Floway pumps and equipment in Hawaii.
Barnwell Industries, Inc. reported losses of $1,514,000, $0.18 per share, and $1,928,000, $0.23 per share, for the three and six months ended March 31, 2020, respectively, as compared to net losses of $2,125,000, $0.26 per share, and $6,725,000, $0.81 per share, for the three and six months ended March 31, 2019, respectively.
Mr. Alexander Kinzler, Chief Executive Officer of Barnwell, commented, “Our improved results for this quarter and six months include a $1,637,000 non-cash impairment of our oil and natural gas properties due to the negative impact on oil prices and the extreme uncertainties created by the COVID-19 pandemic during the three months ended March 31, 2020 on the Company’s financial outlook and the Company’s financial resources to develop our proved undeveloped reserves in the Twining area of Alberta, Canada. Therefore, such proved undeveloped reserves were not included in the ceiling test calculation for the three months ended March 31, 2020 as they were in prior ceiling test calculations. Oil prices also fell dramatically in March and April as a result of the Russian and Saudi Arabian oil price war but have since partially recovered through late May and early June.
“The reduction in the loss for the three months ended March 31, 2020 as compared to last year’s loss for the three months ended March 31, 2019 was largely due to a $1,336,000 gain, before taxes, in the current period from the sale of the Company’s leasehold interest in a contract drilling segment storage yard in Honolulu; whereas there was no such gain in last year’s quarter. Additionally, Barnwell’s contract drilling segment operating profit increased $1,035,000 due to increased drilling activity. Partially offsetting these were the aforementioned non-cash oil and natural gas property impairment which was $1,394,000 higher than the prior year’s quarter, and a $570,000 increase in general and administrative expenses due to increased legal, proxy solicitation and proxy advisory costs. On a positive note, the Company’s oil and natural gas production increased 33% and 9%, respectively, in the three months ended March 31, 2020 as compared to last year’s three months ended March 31, 2019 due largely to an oil well drilled in the Spirit River area in mid-November 2019. However, the Company’s share of recent net oil production in the first week of June 2020 from this well averaged approximately 39 barrels per day, a decline in production due to both natural declines as well as a higher royalty rate due to expiry of the royalty holiday.
“The decrease in the loss for the six months ended March 31, 2020 as compared to last year’s loss for the six months ended March 31, 2019 was due to the aforementioned $1,336,000 gain, before taxes; a $1,992,000 increase in Barnwell’s contract drilling segment operating profit due to increased drilling activity; a $1,226,000 increase in Barnwell’s oil and natural gas segment operating results, before impairments and income taxes, due primarily to a 16% increase in oil production and a 17% increase in oil prices; a $776,000 decrease in the non-cash impairment of our oil and natural gas properties; and a $518,000 increase in general and administrative expenses due to increased legal, proxy solicitation and proxy advisory costs.
Your No. 3 Penny Stock To Watch Closely After A Major News Release: China Automotive Systems, Inc.
Based in Hubei Province, the People’s Republic of China, China Automotive Systems, Inc. (Nasdaq: CAAS) is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through ten Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 6 million sets of steering gears, columns and steering hoses.
China Automotive Systems, Inc. announced its unaudited financial results for the first quarter ended March 31, 2020.
First Quarter 2020 Highlights
- Net sales decreased 32.6% to $73.6 million from $109.2 million in the first quarter of 2019 primarily due to the impact of the COVID-19 pandemic lockdown in China
- Net sales of electric power steering (“EPS”) products declined 63.5% to $8.1 million from $22.2 million in the first quarter of 2019
- Net product sales to Fiat Chrysler and Ford in North America were $28.1 million consistent with the same quarter last year
- Gross margin increased to 15.2% compared with 12.9% in the first quarter of 2019
- Net income attributable to parent company’s common shareholders was $0.05 million, compared to $1.5 million in the first quarter of 2019
- Total cash and cash equivalents and pledged cash were $132.6 million
Mr. Qizhou Wu, chief executive officer of CAAS, commented, “Our extraordinary sales decline reflects the devastating impact of the COVID-19 pandemic on China’s economy and especially the domestic Chinese automobile industry. China’s GDP declined by 6.8% year-over-year, and car sales were down 42% in the first quarter of 2020 compared to the first quarter of 2019 according to the China Association of Automobile Manufacturers (“CAAM”). Internationally, our sales to our tier-1 North American customers remained constant. Also, our innovative, new powerpack brushless motors are about to start commercial production to add a new revenue channel.”
Mr. Jie Li, chief financial officer of CAAS, commented, “Even during the most difficult quarter in our Company’s history, our operations continued to generate positive cash flow and our cash position improved. Our gross margin increased in the first quarter and we have maintained net profitability during this crisis. With our strong balance sheet and effective cashflow management, we remain financially sound.”