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Penny Stocks To Buy For Under $1 On Robinhood

15, 2021

6 min read

This story originally appeared on PennyStocks

3 Penny Stocks to Watch That Are Trading Higher Today

Many penny stocks have shown bullish action in April. While there are bad days in the market, investors seem hopeful about the future. Some of this can be attributed to recent positive updates about the pandemic. In the U.S., COVID cases have rapidly declined in the past month alone. This is in part due to the millions of vaccine doses that have been distributed.

According to the most recent data, 36% of the population has received at least one dose of a vaccine. Because of this, many believe that economic recovery could occur in the coming months. Additionally, factors like solid retail numbers and low unemployment, show that the future could be bright. As a result, many penny stocks are increasing in value.

If you are looking to invest in penny stocks, there are a few options. While you can buy stocks under $5 through many brokers, traders have recently turned to newer platforms. This includes those like Robinhood and WeBull. In the past, buying and selling stocks was a rather tedious process for non-institutional investors. However, the rise of easy-to-use brokers and social platforms like Reddit has increased the number of retail traders out there.

And while these platforms are easy to use, they often won’t allow access to OTC or over-the-counter markets. This is where a large portion of penny stocks reside. While finding stocks under $1 can be challenging on Robinhood, there are plenty of them out there to take a closer look at.

[Read More] 4 Reddit Penny Stocks to Watch Before the End of the Month

Before you dive headfirst into penny stocks, it’s worth noting that they can be more volatile than blue chips. While it depends on the sector, in general, stocks under $5 and especially those under $1 can carry a high-risk profile. That being said, there are lots of penny stocks to watch in April 2021. With this in mind, here are three that posted large movements on April 15th. 

Penny Stocks To Buy For Under $1

ToughBuilt Industries Inc.

ToughBuilt Industries is a company that has been trading heavily off of speculation in the past few days. Before we get into why; let’s talk about what the company does. ToughBuilt is a manufacturer of home improvement items and construction-related products. It offers everything from tool belts and tool bags to storage solutions, saws, and more. On March 26th, the company released an update that most likely affected its intraday trading volume.

This update came as ToughBuilt released its fiscal 2020 results. In the results, TBLT announced revenue growth of 106% to $39.4 million. Additionally, its gross profit shot up by 162% to $14.7 million. This is compared to $5.6 million in the previous year. Both of these numbers represent sizable gains and show that fundamentals might actually be driving its recent price action. 

“ToughBuilt has demonstrated strong fundamentals based on execution team, customer relationships, balance sheet, commitment to research and development and continued customer service.” CEO of ToughBuilt, Michael Panosian

This year, Toughbuilt is focusing on building out its product lines as well as its global distribution. It aims to offer a wider range of products as well as new and innovative equipment.

Despite TBLT falling in value on April 15th, this balance sheet could have larger implications for the long term. It’s common to see a stock either move up or down very quickly on the day of a balance sheet release. Because its numbers are quite good, TBLT stock could be worth watching in the coming days.

Great Panther Mining Ltd.

If you’ve invested in the market in 2021, you’ve probably seen the solid performance of the mining industry. During that time, many mining penny stocks like GPL, have jumped up in value.

One of the driving factors of this is the increasing prices of gold and silver. Because of fears of long-term inflation, investors have turned to safe-haven assets like precious metals. This includes gold and silver. As we turn the corner in April, many mining stocks are continuing to carry this momentum. 

Great Panther Mining is a perfect example of the solid momentum with mining stocks right now. GPL operates as a mining and exploration company based out of Canada. It explores and mines gold, silver, lead, copper, and zinc ores at its facilities. While it does mine non-precious metals, its main focus is on gold and silver. Because of this, it’s no surprise that shares of GPL have increased alongside the precious metals industry.

[Read More] Penny Stocks and the Coinbase IPO: What Cryptocurrency Has to Do With Small-Cap Stocks 

On April 13th, Great Panther reported its first-quarter 2021 production results. In the report, GPL showed solid growth in its mining operations. It also engaged in several big advancements which allowed it to mostly avoid pandemic-related losses. With these results, Great Panther is on track to meet its proposed guidance for 2021.

While production numbers were low in the first quarter of the year, this was all a part of its roadmap. The company states that “The first quarter was planned to be a low production quarter due to heavy stripping. Production is expected to ramp up quarter-over-quarter for the remainder of the year as mining progresses into sectors with lower strip ratios.”

When this was announced, shares of GPL spiked higher during intraday trading. While it did pull back slightly, this seems to be the result of a natural correction. On April 15th, GPL began to see positive momentum once again. During the trading day, GPL shot up by almost 3% to $0.79 per share. With this exciting news in mind, is GPL stock worth watching?

Castor Maritime Inc.

Castor Maritime is a shipping company that works with dry bulk cargoes. This includes everything from flour to building materials and more. During the pandemic, companies like Castor have increased greatly in popularity. However, its recent momentum can be attributed to three factors in particular.

First, on April 5th, it announced the pricing of a $125 million registered direct offering. It will be issuing 192.3 million common shares at $0.65 per share. This is always exciting as it helps to bring in new capital for potential business expansion. Additionally, it can help to make investors feel more comfortable with a company’s balance sheet.

Second, on April 9th, Castor announced that it had acquired a 2011 Japanese-built Panamax dry bulk carrier vessel from a third party for $18.48 million. This is big news for the company as it shows it is expanding its fleet. The company is currently focused on bringing in as much business as possible. This is where the ship acquisition comes in.

Lastly, on April 14th, Castor announced deliveries of the M/V Magic Twilight and M/V Magic Thunder. These are two Korean and Japanese-built dry bulk carriers. Again, this will help to boost its fleet count as well as its carrying capacity. While these updates may seem small, they provide solid insight into what Castor is doing right now. Considering this, is CTRM worth watching?

[Read More] 4 Penny Stocks On Robinhood To Buy Under $1; 50%-270% Price Targets

Best Penny Stocks to Buy in 2021? 3 Cheap Stocks to Watch Right Now

15, 2021

6 min read

This story originally appeared on PennyStocks

Some Penny Stocks Are Down Today, Is This A Buying Opportunity or Not?

Penny stocks have had a great 2021 so far. Throughout the year, we’ve witnessed numerous trends continue to popularize stocks under $5. This includes the influx of Reddit penny stocks, IPOs like COIN stock, and plenty of others. 

Before we go any further, let’s give a quick overview of penny stocks and how they work. This could be considered, a brief “Penny Stocks for Dummies” if you will. 

For starters, the term itself means any stocks trading under $5 per share. Within this, there are thousands of companies to choose from. While some investors like to stick to blue chips, others prefer cheap stocks. And there are some good reasons for this. 

First, it’s much more likely to see a stock go from $0.10 to $0.20 in a day than it is to see one go from $100 to $200. This means that the chances to find a big winner can be much larger than with big-name companies. While volatility can be high, investors understand this and trade accordingly. 

[Read More] Tech Penny Stocks To Buy Now? New Progress Is Worth Considering

So as we hit the halfway point in April, penny stocks are down. And while this may seem disheartening, this is the natural ebb and flow of the stock market; and can be viewed as a small correction. Additionally, any time a stock or area of the market is down, it presents a potential buying opportunity. Considering this, are these some of the best penny stocks to watch in 2021?

3 Penny Stocks to Watch in 2021

Waitr Holdings Inc. (NASDAQ: WTRH) LAIX Inc. (NYSE: LAIX) Ballantyne Strong Inc. (NYSEAMERICAN: BTN)

1. Waitr Holdings Inc. 

Waitr Holdings is a penny stock that we’ve been covering for several months now. Why have we written about it so many times? Well, besides shares of WTRH jumping up by over 140% in the past twelve months, the company has a lot of interesting business propositions. For some context, Waitr operates a food ordering and delivery platform. 

Based in Louisiana, Waitr Holdings competes with other big-name ordering applications like Doordash Inc. (NYSE: DASH) and Ubereats among others. Waitr and its subsidiary, Bite Squad (acquired for $321 million in 2019), offer food ordering in over 700 cities in the U.S. This includes both small and medium-sized markets. While larger food delivery services focus on big markets, Waitr capitalizes on smaller, underserved areas of the U.S. This allows it to differentiate itself from others.

Last week, the company announced that it added several more Marco’s Pizza locations. This brings the total of Marco’s Pizza restaurants to over 100 locations in 92 cities around the country. Regarding this announcement, CEO Carl Grimstad stated that “Marco’s Pizza is dedicated to producing the best-delivered pizza for its customers, and we’re dedicated to make the best delivery experience, which makes it an ideal brand for the Waitr platform.” 

This announcement is only one of several similar restaurant additions it has made in the past few months. This includes adding Chuck E. Cheese restaurants, as well as joining forces with PDQ Restaurants at the end of March. Because of the pandemic, customers have increasingly turned to online food ordering in higher numbers than ever. Considering this, is WTRH a penny stock to watch?

2. LAIX Inc. 

LAIX is an AI-tech company based in China. It works on the creation of products and services used to make English learning more accessible in China. This includes the utilization of its Liulishuo platform, which offers learning services to consumers. The company aims to keep its platform low in cost, which helps to make it more popular than the competitors. 

This is done through the use of its AI teacher, and the various self-running capabilities on the app. Within it, users can hear, understand, interact and evaluate the performance of others users. Because of this, it acts as a social media platform. A few months ago, LAIX released its Q3 2020 financial results. 

In the report, it posted net revenue north of $35.3 million. While this is a decrease of around 11% over the previous quarter, this makes sense given the effects of Covid on all businesses including LAIX. Despite this, it managed to grow its gross margins by a few points to 72.9%. While it did bring in a net loss of $10.4 million, it posted an operating cash flow of $7.8 million. 

“Total net revenues in the quarter were…in line with our guidance. Our primary focus area remains on the optimization of our product mix and improving the learning experience. By continually upgrading our content offering, we hope to drive further improvement in conversion and retention rates.” The CEO of LAIX, Dr. Yi Wang

These results show that LAIX could be growing as more users wish to use its services. Investors should wait to see its next quarterly results to see what type of progress it makes. Considering this, LAIX could be worth keeping an eye on moving forward.

3. Ballantyne Strong Inc. 

When we first discussed Ballantyne Strong earlier in the week, shares were trading well under the $3 mark. On April 15th, BTN stock shot up once again by more than 14% to over $4.61 per share. This is a great example of how speculation and fundamentals can work in tandem to support a price increase. Because we’ve talked about BTN stock twice this week, we’ll keep it simple for today. 

One of the main reasons that Ballantyne is seeing so much momentum is a deal it announced only a few days ago. As a holdings company, Ballantyne invests in companies that it sees potential value in. Primarily, this is entertainment and media. However, it recently signed into an agreement to acquire the assets of Forest and Paper Products for $214 million from Rayonier Advanced Materials Inc. This acquisition offers Ballantyne exposure to the paper and building materials sector. 

[Read More] 3 Penny Stocks To Watch In April That Top Analysts Are Bullish On

During the pandemic, the cost of both of these assets has driven up substantially. This is due to the return of commerce and the heightened industrialization occurring in the past few months. With this order, Ballantyne will have a strong position as a top ten lumber producer in all of Canada. While no one knows if BTN stock will continue to rise, it remains very popular right now. Whether it should be on your watchlist is up to you. 

Apis Capital Flagship Fund 1Q21 Commentary

14, 2021

9 min read

This story originally appeared on ValueWalk

Apis Capital Flagship Fund commentary for the first quarter ended March 31, 2021.

Q1 2021 hedge fund letters, conferences and more
Dear Partners,
Our Flagship Fund was up 4.7% net in Q1 2021. During the past quarter, our longs contributed 10.1% (gross), while our shorts detracted 3.4% (gross). At the end of March, the Fund was approximately 58% net long with the portfolio 88% long and 30% short.

Performance Overview (Gross Returns)
Returns were solid for the Flagship Fund during the first quarter and roughly matched the global indices, despite our net portfolio exposure being held at approximately 60%. While tailwinds for small-cap stocks continue to be favorable, sector rotations away from last year’s tech darlings to more cyclical and industrial areas were timed well. Following a poor result for shorts in January, the “Reddit effect” softened in the last two months of the quarter, allowing for equally solid short returns in both months.
While all regions contributed in March (led by Asia), Asia contributed 3.7% to gross returns for the quarter, while Europe added about 3.1% in the same period. North America was slightly negative, still recovering from the damage inflicted by short losses suffered in January. Within sectors, Industrials and Materials stood out contributing 5.2%, while Technology added 2.7%. One notable detractor was Healthcare, which was primarily driven by adverse volatility in shorts during the last week of January.
Notable long winners were names we have highlighted previously, such as Evolution Gaming (contributing 2.2%), Darling Ingredients (1.4%) and Tokai Carbon (1.2%). Notable detractors, which had been winners last year, were Rush Street Gaming (-0.7%) or those perceived to be harmed by re-opening such as online retailer BHG Group (-0.6%). On the short side, GSX Techedu deserves specific mention. GSX started the year trading around $50 (per share) and climbed to over $140 during the month of January, only to close out the quarter at about $33. Had we held the same position throughout Q1, it would have been a nice contributor to performance, but risk management forced us to realize some losses during the epic January short squeeze. Near quarter-end, GSX plummeted when it was revealed it was part of an engineered squeeze undertaken by the now infamous Archegos Capital. Why multiple brokers would provide five times leverage to someone (who, by the way, previously pleaded guilty to wire fraud and insider trading1) to help engineer a short squeeze in a fraudulent Chinese company is beyond disappointing. Shame on all involved. Shorting is hard enough as it is without our own brokers working against us.
Portfolio Outlook And Positioning
The first quarter of 2021 has been predictably volatile. The markets are shifting focus away from safe, defensive businesses to those that have survived the lockdown and are likely to recover strongly as economies reopen. Adding a crosscurrent, however, is the ongoing effect of spectacular stimulus which has levitated all manner of speculation from SPACs to intergalactic tourism plays. During the first quarter, we witnessed the market move its focus away from these more speculative areas.

It appears that the prospect of re-opening will bring with it some sanity – possibly a direct result of fewer stimulus checks being sent to day traders. The outlook is hardly clear, however, as both the U.S. Federal Reserve and ECB have committed to keeping the current level of extremely low interest rates for at least another year or two. Furthermore, the bugaboo of higher inflation has already been dismissed, as any spike up (which appears to be underway) is explicitly regarded as temporary. With caution being thrown to the wind, it seems the market’s “tailwind” of central bank monetary stimulus will continue for the foreseeable future even if inflation perks up. As always, we build our portfolio bottom-up while due consideration is paid to these macro factors. With this in mind, we have leaned into our more speculative shorts as they have begun to work. We detail several of these names for your reference below.
Investment Highlights
AMC Entertainment Holdings, Inc. (U.S. – $4.3bn market cap)
Prior to COVID-19 pandemic, AMC had been a multi-year “melting ice cube” short and part of a basket of movie theater companies we have shorted (including Cineworld, Cinemark, Marcus, etc.) in the secular theme of declining movie attendance globally. Some of our best shorts have had the lethal combination of declining revenues and too much debt, with AMC being a prime example. Obviously, COVID-19 massively accelerated their problems and despite our view that it was a “zero,” we (luckily) covered in the low-single digits as short positions in penny stocks can often be tricky.
Thanks to retail enthusiasm (or perhaps more “Archegos-like” shenanigans), AMC has literally risen from the dead. The market cap today is higher than at any time in its history while debt is twice what it was two years ago, meaning the enterprise value (EV) now stands at almost $16bn, or about triple what it has been over the last several years. As a simple thought exercise, assume sales return to past peak (hard to do with fewer theaters, fewer seats, shortened or no movie release windows, improvement in home theaters, etc.) and AMC today trades at 3 times the EV/Sales multiple vs. pre-pandemic. Is AMC worth three times what it was worth two years ago? Highly unlikely!
Yamashin Filter Corp. (Japan – $570mm market cap)
Yamashin Filter’s main business is providing filters used in hydraulic excavators. This core business is niche but cyclical, growing in-line with or slightly above GDP and with decent margins. Management is destroying shareholder value, however, by getting into the consumer face mask business. Throughout 2020, the company built up grand expectations for this new business line, only to whipsaw investors with dramatic cuts to guidance just months later. Management claimed the mask business would generate ¥3bn in revenue and ¥910mm in profits, but just three months later slashed this revenue target by two-thirds and changed their profit guidance to a loss. Meanwhile, it continues to spend on expanding production capacity for this commoditized offering. At 89 times next year’s earnings, which we think have potential to disappoint, we see plenty of further downside.
Nevro Corp. (U.S. – $5bn market cap)
We are short Nevro, a medical device company specializing in spinal cord stimulation (SCS) for chronic pain conditions. Our thesis is premised on consistently negative operating margins amid flat revenue growth, limited real-world efficacy of their flagship Senza device, and evidence of a kickback scheme where they have compensated physicians to implant their devices. Perhaps the reason their devices are so difficult to place is the poor real-world results of their device. Multiple physicians confirm that patients typically respond early in treatment only to have any effect wane within about 6 months on therapy and more than 75% of patients requiring an explant of the device within a few years…not exactly the profile of the “best-in-class” device the company purports. Finally, the company appears to be engaging in a kickback scheme to drive implants as reported by European investigative journalists citing contracts showing a payment of approximately $10k per procedure to Swiss physicians. While there is no legal liability in Switzerland for medical device kickbacks until 2023, we doubt this type of behavior is limited to Switzerland. With sales over the last few years stagnating around $350-$400mm and losses mounting, we find it hard to justify the current $5bn valuation.
CD Projekt S.A. (Poland – $4.9bn market cap)
We are also short shares of CD Projekt, the Polish AAA video game developer and publisher. CD Projekt is the 11th largest company on the Warsaw Stock Exchange and the 14th largest pure play game developer in the world. The company has gained a strong reputation and cult-like following by gamers for the quality of its games, which are typically story-driven, single player games. Most notably, CD Projekt is known for its Witcher series, which has sold over 50 million copies since the first game was launched 2007. Compared to studios of similar market cap which typically own various franchises and are juggling multiple projects at a time, CD Projekt has historically only worked on a single game at a time with 4-5 years between releases. Recently, the company has made headlines for the launch of its newest game, Cyberpunk 2077. Cyberpunk was one of the most anticipated game launches in recent memory and consensus expectations firmly placed it among the highest selling launch games of all time. While our initial thesis centered on the belief that expectations were simply too high, the launch has been more disastrous than we could have possibly imagined. Reviews of the game were generally positive in the days leading up to the launch, however they were revealed to be based on the higher performance PC version of the game that CD Projekt provided to reviewers. As it turned out, the console version of the game was so riddled with bugs that the game was nearly unplayable. This was such a problem that within a week following launch, Sony removed Cyberpunk from its PlayStation Store “until further notice” and as of early April, it has yet to return. Now four months after the launch, new copies of the game can be found at a 30% discount on Amazon. CD Projekt had a lot riding on this game and will now be spending a significant part of 2021 fixing bugs and trying to regain the attention of fickle gamers instead of launching previously planned additional content and multiplayer expansions. While CD Projekt could turn it around, the industry’s history with previous botched game launches is not a good omen. By the time the company is able to right the ship, its possible gamers will have already moved on.
While shares are down over 50% from the launch, they are still trading at approximately 20 times FY21 revised consensus earnings; earnings that will likely steadily decline over the coming years (EPS declined at a 17% CAGR in the 4 years following the Witcher 3 launch) as the company moves on to its next major game. This compares to mid-20 times P/E multiples for peers like Activision and EA that have more predictable game releases and growing EPS. Furthermore, we believe consensus estimates may still be too high. By our math, they imply another 10-15mm copies of Cyberpunk to be sold in 2021, which would mean that Cyberpunk will have sold nearly as many copies in its first 12 months as the critically acclaimed Witcher 3 did after 5 years. If CD Projekt fails to resuscitate Cyberpunk, we believe that consensus estimates one and two years out could be cut by as much as 50% with a commensurate drop in share price.

As always, we encourage your questions and comments, so please do not hesitate to call our team here at Apis or Will Dombrowski at +1.203.409.6301.
Daniel Barker
Portfolio Manager & Managing Member
Eric Almeraz
Director of Research & Managing Member