Why Are Penny Stocks on Robinhood So Popular Right Now?

5 Robinhood Penny Stocks to Watch As We Turn the Corner in May 

Finding penny stocks on Robinhood has become extremely popular among all types of investors this year. At its core, Robinhood allows investors to find penny stocks and purchase them with no fees at all. Additionally, we can’t talk about Robinhood without mentioning the effect of Reddit on penny stocks.

After the GameStop GME fiasco earlier this year many investors have turned to finding penny stocks to buy on social media. These investors turn to subreddits such as r/WallStreetBets to see which stocks are the most talked about. Wall Street is referring to these "Reddit investors" as "retail investors".

A lot of retail investors use applications like Robinhood and WeBull when buying penny stocks. The main advantage of using apps like these is the ease of access to your portfolio and the simple user interface. Generally, Reddit penny stocks are only popular for a certain amount of time before retail traders move on to the next company.

This inherently makes these stocks pretty volatile, and more attractive to short-term investors. At the same time, there are some penny stocks that Reddit investors are looking at for the long-term as well.

While many think it is easy to make money with penny stocks, they are usually considered to be risky assets. Penny stocks can move up or down in large percentages during a single trading day. To mitigate some of this risk, investors will develop a strategy. Looking at world news, sector news, rumors, financial reports, and more are all useful tools to use when investing in any company, let alone investing in penny stocks. 

If you are long-term investing, you will want a company that has a lot in its pipeline. If you are short-term or swing trading, you will want a company that has significant intraday or intra-week price movements. With all of this information in mind, let's look at five Robinhood penny stocks that are trending this week.

5 Robinhood Penny Stocks Trending This Week 

1. Rigel Pharmaceuticals Inc. RIGL
2. Southwestern Energy Company SWN
3. AgEagle Aerial Systems Inc. UAVS
4. Vislink Technologies Inc. VISL
5. China Xiangtai Food Co., Ltd. PLIN

1. Rigel Pharmaceuticals Inc. RIGL

Biotech penny stocks have been in focus recently, and Rigel Pharmaceuticals Inc. is definitely benefitting from this. What does this company do you might be asking? Rigel is a biotech penny stock that discovers and develops small molecule drugs. Its products treat hematologic disorders, cancer, and rare immune diseases.

In the week following its first-quarter 2021 financial results release, RIGL stock has greatly increased in value. The company's reported net income grew to $39.5 million from $21.2 million year over year.

Its net product sales of $12.4 million and total revenue of $81 million is great for the company as well. All of these show solid signs of growth for Rigel. And with any biotech company, balance sheets will always be a tell-all for investors.

Rigel Pharmaceuticals also recently reported positive topline results for the fostamatinib Phase 2 clinical trial for patients with COVID-19. This is a big deal and shows that Rigel is working on a compound related to the pandemic. And, we’ve seen companies working on similar treatments shoot up in popularity this year. With all of these positive results and RIGL stock’s big price movements in the past few weeks, will it make your watchlist?

2. Southwestern Energy Company SWN

Southwestern Energy Company explores, develops, and produces oil, natural gas, and natural gas liquids. Its United States production focuses on developing reservoirs in Pennsylvania, Ohio, and West Virginia.

Today, we are seeing SWN rise for a variety of reasons. Most notably is the result of the Colonial Pipeline shutdown which was hacked into earlier in the week. This has caused major panic among the public and has resulted in a gas buying frenzy despite no major shortages being reported by the government. This has resulted in a large focus on energy penny stocks.

At the end of April, Southwestern Energy released its first-quarter 2021 results which brought in a lot of attention. The company delivered strong free cash flow and reduced its debt. Its adjusted net income grew from $56 million to $196 million year over year. 

The President and CEO of the company Bill Way said, “The Company's returns-driven strategy is underpinned by a lower cost structure, improving operational performance, a strong balance sheet, the generation of free cash flow and capturing the benefits of scale, all while operating safely and responsibly." 

With a positive outlook for the future and the shutdown mentioned above, will SWN be on your list of penny stocks to watch?

3. AgEagle Aerial Systems Inc. UAVS

Industrial penny stocks have been performing well recently due to many industries reopening. And, AgEagle Aerial Systems Inc. is greatly benefitting from this. UAVS designs, develops, produces, and distributes unmanned aerial vehicles for use in the agriculture industry.

Additionally, Its FarmLens subscription-based cloud service processes drone data for farmers which is a major benefit to these consumers. This is a cutting edge field, and one that UAVS is a pioneer in. Because the farming industry has a desperate need for innovation, many are looking at UAVS among other companies working to innovate in agriculture.

One significant announcement that is impacting UAVS stock comes from a recent update. Earlier, reports showed that Pfizer may begin using drones to deliver COVID-19 vaccines. Since AgEagle is in the drone industry, this announcement excited investors. On May 12th, UAVS stock price went above $5 a share, but then fell back down to $4.70 a share later in the day. This is an interesting development, and one that we will have to see play out before moving any further. 

Its trading volume is lower than average in recent sessions, but still rather high. AgEagle plans on hosting a corporate update on May 17th, after the market closes. Because penny stocks are highly speculative, this could be worth paying attention to. So with all of this considered, will UAVS be on your penny stock watchlist?

4. Vislink Technologies Inc. VISL

If you've been watching the market, you'll know that tech penny stocks like Vislink Technologies Inc. are performing very well at the moment. Sometimes when blue-chip tech stocks are not performing well, investors will turn to tech penny stocks for their swift price movements. But what does Vislink do? Vislink designs, develops, and delivers wireless communications solutions. 

It offers live production products, miniature transmitters, handheld receivers, and much more. Vislink is also involved in the drone industry just like AgEagle. 

So ahead of the report that Pfizer may be using drones to deliver vaccines, VISL shares have increased as a result. In other recent news, the company joined a $2.8 million project to upgrade the microwave distribution system for Alabama Public Television.

The project requires bi-directional, high-speed IP components from Vislink. This may not be a be-all end-all deal, but it should provide VISL with some much needed capital moving forward. With all of this in mind, is VISL on your list of penny stocks to watch?

5. China Xiangtai Food Co., Ltd. PLIN

China Xiangtai Food Co., Ltd. is a penny stock working on the production of animal products for a large range of consumer and wholesale meat markets. The company slaughters, processes, packs, distributes, and sells its variety of pork-based meat products in China. It also offers chicken, beef, lamb, duck, and rabbit meat; however pork is its main area of focus.

Recently, PLIN stock has been seeing some major momentum. While there is no company-specific news that is causing PLIN stock to increase in price and volume, we can look at what else may be causing it. PLIN stock has shown up on various Reddit communities in the past.

So could Reddit be the reason that PLIN stock is going up so much? While this can't be ruled out, the company does have nearly double its average volume and is up by 7% on May 12th. So, this could be a result of social media speculation, but it is hard to say for sure. PLIN is now above the point that it started at in 2021, so is it worth watching?

Which Penny Stocks Will You Add to Your Watchlist?

Penny stocks are in an extra volatile state due to the world economy and the ongoing effects of Covid. With that being said, there are still plenty of penny stock success stories this year. Some companies have managed to escape penny status by pushing past $5 per share. But, this is a rarity and something that only research can help to identify. Additionally, making a list of penny stocks to watch can be easier if you know what your goals are. 

If you plan on short-term investing, you know looking at the most recent news and events could be a benefit. However, if you are long-term investing, companies with a solid history and iron-clad financials may be better for you. No matter which way you invest, using research as the backbone to your portfolio, will always increase the chances of profitability.