These Reddit Penny Stocks Are Soaring Today, Are They Worth Buying?

3 Reddit Penny Stocks to Watch in May 2021

As May goes on, there are hundreds of penny stocks on Reddit that could be worth watching. However, just because a company is a Reddit penny stock, does not mean that it is worth buying. Rather, investors need to make sure to do their due diligence before investing. 

Additionally, many investors are finding penny stocks on Reddit or other social media outlets. Both Robinhood and Reddit are great places to begin creating a penny stock watchlist, but they should be used for inspiration rather than to create a concrete list of penny stocks to buy. 

So, once you've compiled a watchlist, now the research phase can begin. With any company, there are three things to consider; fundamentals, speculation, and industry-specific factors. Fundamentals are the intrinsic financial aspects, that are specific to a company. This includes balance sheets, corporate updates, financings, and anything else relating to a company's financial situation. 

Speculation is arguably the most important thing to consider when looking for a penny stock to watch. Many investors argue that speculative factors, which include everything from news to rumors and more, can lead to dramatic price fluctuations on a daily or hourly basis. 

Lastly, industry-specific events are important to consider. While this ties into speculation, often, the industry that a company operates in will help to give investors a better idea of the trajectory of a specific company. With all of this in mind, let's take a look at three Robinhood penny stocks showing increased momentum right now. 

3 Reddit Penny Stocks to Watch Right Now

• Zynerba Pharmaceuticals Inc. ZYNE 
• Akebia Therapeutics Inc. AKBA 
• Hertz Global Holdings Inc. HTZGQ

Zynerba Pharmaceuticals Inc. ZYNE 

Up by almost 8% by early morning, Zynerba Pharmaceuticals is as its name suggests, a biotech penny stock. Before we get into why ZYNE stock jumped today, let's take a closer look at what the company is working on. Zynerbia focuses on transdermal cannabinoid therapies for rare and near-rare neuropsychiatric conditions. 

This includes those living with Fragile X syndrome, autism, 22q11.2 deletion syndrome, and several rare types of epilepsy among others. Its work focuses on utilizing novel therapies to treat this broad range of ailments. On Wednesday, May 12th, ZYNE reported its first-quarter 2021 financial results as well as several highlights from the quarter. 

CEO Armando Anido, stated that "we are committed to delivering on our important milestones in 2021 as we develop Zygel in multiple neuropsychiatric indications, including initiating a confirmatory pivotal Phase 3 trial, RECONNECT in the third quarter of 2021, after productive dialogue and alignment with the FDA. With a cash runway that takes us well into the first half of 2024, we believe that we are ideally positioned to continue our efforts to develop the first FDA-approved treatment for patients with Fragile X Syndrome." 

Most biotech companies, like Zynerba, tend to fund themselves through large fundraising opportunities rather than high revenue. This is the case until a compound is either licensed out or commercialized. So, with an advantageous capital position, ZYNE could be worth watching in the coming months. 

Akebia Therapeutics Inc. AKBA 

Akebia Therapeutics is another biotech penny stock, but it works in the field of kidney disorders. In the past few years, AKBA has worked heavily to expand its pipeline of novel therapeutics for the benefit of patients and healthcare providers. And, on Monday, May 10th, it announced its first-quarter 2021 financial results as well as several corporate milestones. 

"Akebia is off to a great start in 2021, building positive momentum with solid execution on strategic priorities that set the stage for an exciting year. Most importantly, we submitted the vadadustat NDA to the FDA, a significant milestone for Akebia and our new partner, Otsuka Pharmaceutical Co. Ltd.

We are also very proud that the New England Journal of Medicine recently published the results from both INNO2VATE and PRO2TECT, the global Phase 3 programs for vadadustat." 

John P. Butler, CEO of Akebia Therapeutics

For the first quarter of 2021, Akebia brought in roughly $52.3 million in total revenue. While it did report a net loss of almost $70 million for the period, this is due to both the higher cost of goods sold as well as lower collaboration revenue during the period.

Regardless, AKBA ended the quarter with more than $272.8 million in cash and cash equivalents. This is a sizable amount and reflects just how advantageous Akebia's cash position is. With this in mind, will AKBA be on your penny stock watchlist?

Hertz Global Holdings Inc. HTZGQ

Hertz Global Holdings Inc. is one of the largest gainers of the day today. Buy 1 PM EST, shares of HTZGQ stock jumped by as much as 61%. Before we get into why let's talk about what Hertz does if you're not familiar.

 If you've ever rented a car for any purpose, you've probably heard of Hertz. But, what you may not know is that the company also owns other rental companies such as Dollar and Thrifty.

These brands rent cars across the world in North America, Europe, the Caribbean, Latin America, Africa, and the Middle East. Because of its incredibly broad scope, Hertz is considered to be one of the largest vehicle rental services in the world. Additionally, the Hertz brand is also incredibly recognizable. 

On Wednesday, May 12th at around 12:30 PM EST, Hertz announced that it had selected a $6 billion bid from Knighthead, Certares, and Apollo to fund its exit from Chapter 11 status. These three large funds will together provide all of the capital that Hertz needs to get itself out of bankruptcy. The deal consists of $239 million in cash and the rest through common stock and 30-year warrants for 18% of common stock. 

“We are very pleased that our Plan process produced such a tremendous result for our creditors and shareholders. [We] appreciate the strong interest in Hertz from the competing Plan sponsors and thank them for their active engagement, which provided us with excellent options for our exit from Chapter 11. We look forward to working with the KHCA Group to complete the remaining steps in our restructuring and best position Hertz for the future." 

The President and CEO of Hertz, Paul Stone

With its massive gain today, it's clear that HTZGQ stock is highly volatile. But, with this new investment and an exit from bankruptcy, Hertz stock could be worth watching. 

Will You Add These Penny Stocks to Your Watchlist?

Finding the best penny stocks to watch can be a challenge for some. However, using Robinhood and Reddit to create a penny stock watchlist, can help greatly with inspiration.

Now, there are a lot of factors that go into deciding which company is best for your portfolio. But in 2021, we continue to see a lot of momentum throughout the market which can make it easier to decide. With all of this in mind, will you add these penny stocks to your watchlist?