Penny stocks have been one way for traders to take advantage of the stock market’s volatility. Typically, we define these as stocks under $5, but since the pandemic, the makeup of these cheap stocks has changed. What I mean by this is that the 2020 sell-off in many companies took certain names down below the $5 threshold.
Now, a little over a year after the pandemic started, many penny stocks have climbed dramatically. While there are penny stocks of all types for investors to look at, reopening and epicenter stocks have been a popular topic.
These are companies that have benefitted from large vaccine distribution and dropping Covid case numbers. According to Tom Lee of Fundstrat, “epicenter stocks are shares of companies that were hit hardest by the global pandemic in 2020 but could potentially recover the strongest in an economic reopening.”
Right now, many reopening penny stocks have seen bullish interest. What’s more, this grouping could be extended to any industry benefiting from increased economic activity. It’s important to think outside of the box with some of these names. With this in mind, here are five reopening penny stocks that investors can’t get enough of.Reopening Penny Stocks to Watch
- Rave Restaurant Group Inc. (NASDAQ: RAVE)
- Enzo Biochem Inc. (NYSE: ENZ)
- Seanergy Maritime Holdings Corp. (NASDAQ: SHIP)
- Boxlight Corp. (NASDAQ: BOXL)
- NewAge Inc. (NASDAQ: NBEV)
As far as reopening penny stocks go, Rave Restaurant Group is a perfect example. Because of restrictions being lifted in certain states, shares of RAVE stock bounced more than 25% on March 15th. Founded back in the 50s, Rave is the owner and operator of many franchised pizza restaurants.
This includes more than 200 Pie Five Pizza Co.’s, Pizza Inn, and Pizza Inn Express kiosk locations worldwide. The company is also working on new methods to deliver fresh pizza through unconventional outlets. Only a few weeks ago, Rave announced its second-quarter 2021 financial results. Revenue came in at $2.1 million, a decrease of $0.7 million over the same quarter last year.
Thanks to Covid, the decline in revenue makes sense for this quarter. But, with many states beginning to reopen, investors are betting on the near term with restaurant stocks. CEO Brandon Solano stated concerning the financial report that “while we continue to work through challenges presented by the pandemic, we are seeing strong indications that the team and strategy we’ve put into place are taking hold and yielding results in repositioning Rave for long term success.”Enzo Biochem Inc.
After reporting its Q2 2021 financial results on March 15th, shares of ENZ stock were up by over 50%. In the report, the company announced total revenue for the quarter of $31.5 million. This represents an almost 62% increase year over year. Also, the company saw a consolidated gross margin increase of 50% over the previous year. Lastly, it reported an adjusted positive EBITDA of $4.3 million. This represents an EPS of $0.05 over an EPS loss of $0.16 in Q2 2020.
CEO Elazar Rabbani stated that “The Company’s strong financial performance in the second quarter is another reflection of the strength of our new business model for integrated diagnostic products and services. The high gross margins achieved this quarter further validate the strength of Enzo’s strategy.”
During the quarter, the company was able to develop its GENFLEX molecular diagnostic platform further. Additionally, the company worked on shifting this platform to potentially aid in the Covid-19 pandemic. The company states that its platform could dramatically lower costs for common molecular tests.
It also mentioned that this is one of the fastest-growing areas of the clinical testing market. Because it is working on a covid-related product, Enzo Biochem has exposure to this reopening trend. Despite dropping case numbers, the need for cheap and accurate solutions to Covid is more pertinent than ever. With its solid quarterly growth in mind, ENZ could be one of the penny stocks to watch this month.Seanergy Maritime Holdings Corp.
If you’re looking for a more pure-play reopening penny stock, Seanergy could be worth looking into. Seanergy and similar shipping stocks have seen a lot of bullish momentum in the past few months. Despite the pandemic, the need for goods due to increased e-commerce sales is extremely high. This means that shipping companies are gaining heightened interest from investors right now.
The company provides shipping services for dry and bulk goods. As of February 2021, it has 12 Capesize vessels with an average age of just over 12 years. This is relatively new and means that the company could avoid costly repairs. Additionally, these ships have an average aggregate cargo-carrying capacity of over 2.1 dwt. Only a few weeks ago, it announced the pricing of a $75 million common share offering.
CEO Stamatis Tsantanis stated that “the pricing of our offering will underpin our strategic aims of sustainable fleet growth and continued balance sheet deleveraging. The proceeds of this highly accretive transaction shall further enhance our liquidity allowing us to pursue potential additional acquisitions at what we believe to be favorable timing in the market cycle.”
Additionally, the company announced the full prepayment of a senior credit facility. With an outstanding balance of $21.6 million, the company could receive a 10% discount by reducing repayment time. The company states that this will have an immediate and substantial impact on its profitability. In the past few months, the Capesize daily spot rates, or the amount received for shipping goods, have almost doubled over its historical 5-year averages. With all of this in mind, SHIP could be a penny stock worth watching.Boxlight Corp.
Boxlight Corp. is a tech company working on interactive solutions for educational tech products. This includes its Clevertouch and Mimio products. Boxlight designs, sells, and services its entire solution pipeline to stay vertically integrated. This includes interactive displays, software for collaboration, accessories, and other services.
While it is aimed at the education market, the company is also working on tapping into the larger business sector. A few days ago, it announced that the British Academy had selected the Clevertouch UX Pro interactive touchscreen display to replace its current technology workforce. The British Academy is a renowned learning environment for humanities and sciences.
Because Boxlight’s products have state-of-the-art features such as zoom support, infinity whiteboarding, and more, this choice was the obvious one for the Academy. While this is just one contract, having such a large educational body helps to affirm Boxlight’s placement in the market. Also, the company announced the introduction of Clevertouch Academy.
This aims to offer a large range of resources to teachers, trainers, engineers, and all who use the Clevertouch product. The President of Boxlight, Mark Starkey, stated that “Clevertouch Academy marks an additional brand investment for Boxlight in 2021. Training and supporting our customers is one of our top priorities.”
Since education and virtual learning are likely to remain a factor, BOXL could be another one of the reopening penny stocks to watch.NewAge Inc.
Consumer products companies are also likely to be ones in the spotlight as things start reopening. In this case, NewAge Inc. has been a name to follow. The company has taken an omnichannel approach to retail sales and focuses on social selling. As they say, the proof is in the pudding, and today NewAge reported its fourth quarter and full-year 2020 results.
Sales for Q4 beat analyst’s estimates. NewAge reported $90.4 million compared to estimates of $81.02 million. Not only was this a big beat, but the $90.4 million figure was also an increase of 53%. Adjusted EBITDA also came in higher than the company expected, reaching $2.9 million. This was NewAge’s first positive adjusted EBITDA quarter in almost 2 years.
“2020 was another transformative year for NewAge, whereby we reached nearly half a billion dollars in pro forma revenue and achieved positive adjusted EBITDA in the fourth quarter, and we believe we are just getting started. Beyond the scale and profitability benefits that came with ARIIX and the four other companies that merged with us in November, we significantly strengthened our management teams and execution capabilities, and as a result are seeing excellent organic growth momentum in 2021.”Brent Willis, NewAge CEO
The company’s target products are all centered around healthy living. These include categories like health & wellness, healthy appearance, and nutritional performance. With a network of more than 400,000 independent distributors and brand partners, the reopening trend could a spotlight on companies like NewAge.