4 Penny Stocks To Buy Before Reopening; Are They Worth It?

Penny stocks are often quite speculative due to their cheaper price. This is usually why new traders look to buy them as a first-time trade. While we wait for a vaccine and a stimulus bill to be passed in the U.S., many penny stocks have been able to climb on positive news regarding these factors. One thing that investors should always keep in mind is that news has one of the largest impacts on the stock market as a whole.

Any top trader will tell you that following the news is one of the best ways to stay ahead when trading penny stocks or any security for that matter. While just knowing current events isn't enough, it is a great step in the right direction. Furthermore, this has caused traders to also look at what types of industries could benefit from reopening. Things like health, tech, and even retail are all in focus.

Reopening Penny Stocks

One of the most important things to know is that the best trader is always the most informed trader. And while this may have been difficult in the past, the internet has made researching penny stocks easier than ever before. When looking for penny stocks to buy, investors should make sure that they know two things. The first of those is a company's financials. This can help to determine what type of financial situation a given penny stock is in.

Second, investors should scour the internet to find press releases or any announcements made by a company. This can help to determine what a business is up to in the present and what its plans are for the future. As stated earlier, having all the information we can, can help to reduce the risk of unexpected price moves. While investing is an individual task, there are broad themes that can help everyday traders to have the best chance at success. With this information in mind, here are four trending companies to watch but it will be up to you to decide if they’re the best penny stocks to buy for the end of December.

Penny Stocks to Buy [or sell]: Lexicon Pharmaceuticals Inc.

Lexicon Pharmaceuticals Inc. (LXRX Stock Report) operates as a biopharmaceutical company based in the U.S. The company is currently working on a project known as Genome5000. The goal of this is to study how genes and protein targets work within the body. With this technology, Lexicon Pharmaceuticals should be able to work on producing new and potentially life-saving diseases. It currently has several drugs within its pipeline that treat everything from neuropathy to heart failure and diabetes. At market close on December 16th, Lexicon announced that it has entered into a collaboration with AC Bioscience LTD. The goal of this collaboration is to work on the preclinical study of LX2931.

Praveen Tyle, EVP of research and development at Lexicon, stated that "in line with our realignment around the rapid development of the LX9211 program, we continue to evaluate our pipeline and determine the most effective way to advance our broad library of compounds and targets. We are pleased to collaborate with AC Bioscience to accelerate their efforts around S1P and look forward to learning additional information about this potentially interesting pathway."

While this may seem like a small development, collaborations like these can be the backbones for company growth. The goal with this is to study the efficacy of LX2931 to find clinical data for it. While it may take some time to see the benefits of these studies, this does look like a promising step for Lexicon. For that reason, investors could choose to view LXRX stock as a penny stock to watch.

Penny Stocks to Buy [or sell]: Federal National Mortgage Association

Federal National Mortgage Association (FNMA Stock Report) or Fannie Mae as it is often referred to as, is one of the leading government-backed mortgage providers in the U.S. The company states that it provides mortgages and loans to individuals, that are backed by certain programs from the federal government. During the pandemic, FNMA stock saw some dreary days as the economy went into a small recession. But now, with a vaccine on the way, investors are once again betting on FNMA for the long term. The vaccine is important in relation to FNMA as it could help to stimulate the economy in the near future. This would mean more people getting loans, and thus more demand for companies like FNMA.

In addition to this, many investors believe that the U.S. will soon finalize a new covid stimulus package. This would undoubtedly be a benefit to the mortgage industry and the U.S. economy as a whole. But, these two factors are also the reasons that FNMA stock tends to be quite volatile. In the past mont, shares of FNMA have shot up by around 28%. In the past five years, we see that the highest price achieved for FNMA stock trended at around $3.

With its current price of $2.39 as of December 16th, it seems as though there could be room for FNMA to grow. With that in mind, a lot depends on what happens with the economy in the next month or so. But in the meantime, investors could consider FNMA a penny stock to watch.

Penny Stocks to Buy [or sell]: Canaan Inc.

Canaan Inc. (CAN Stock Report) is a Chinese company working on the production, research, and design of integrated circuit products. These products are used in the mining of bitcoin, which has recently increased in popularity. Before we go any further, investors should note that the price of CAN stock can be highly correlated with the price of bitcoin.

This is not a guarantee whatsoever, but rather something that investors should be aware of. At the beginning of December, Canaan Inc. announced its Q3 financial results for the period ending on September 30th. In the results, the company brought in around $24 million in revenue. While this is a decrease of around 75% over the previous years third quarter, it is still quite substantial.

One of the main reasons for this decline in revenue is that the bitcoin bubble burst toward the end of last year. This resulted in many investors losing interest in bitcoin, and subsequently Canaan Inc. But, in the past six months, interest in bitcoin has once again shot up, leading to you guessed it, greater interest in CAN stock. CEO of the company, Nangeng Zhang, stated that "During the third quarter of 2020, we remained undeterred by the pandemic to strengthen our research and development capabilities, expand our AI business and execute new business initiatives."

While this was not the ideal quarter, it does show that Canaan Inc. is working to overcome the challenges of the pandemic. Whether or not this makes it a penny stock to watch remains up to investors to decide.

Penny Stocks to Buy [or sell]: Seneca Biopharma Inc.

Seneca Biopharma Inc. (SNCA Stock Report) could be one to watch right now after big merger news this week. The company and Leading BioSciences, Inc. entered into a merger agreement whereby a Seneca subsidiary will combine with Leading. The goal is to create a company focused on Leading’s pipeline asset, LB1148 in clinical studies to identify the potential of restoring gastrointestinal function after surgery. Post-merger, the new company will be named Palisade Bio with a ticker symbol of PALI.

The importance here is that LB1148 isn’t some early-stage clinical trial drug. It’s a Phase-3 ready, patent-protected treatment designed to neutralize certain tings to combat loss of GI function.

“This is a transformational event for Leading BioSciences, and a critical next step in the evolution of the Company. Through this merger, the newly formed Palisade Bio will be optimally positioned to advance our lead drug candidate LB1148 through the final phases of clinical development for FDA approval.”
Tom M. Hallam , Ph.D., chief executive officer of Leading BioSciences

Thanks to this news, SNCA stock is popping on Thursday morning during premarket hours. Considering how thinly traded this has been will the merger news be the turnaround catalyst for this biotech stock?