Reddit Penny Stocks Surge As GameStop Hits New March Highs

Are These Reddit Penny Stocks On Your List Today?

Penny stocks have been red hot lately, and yes, it has been while the broader markets were getting beaten up in March. Now, I’m not going to say that stocks under $5 were immune to the market’s downturn. In fact, many of the high-flying names from earlier in the year pulled back aggressively last week.

This hasn’t stopped analysts in their pursuit of finding alpha in the market. This month a slew of new ratings have come out, triggering a surge in many small-cap stocks. What’s more, the Reddit retail craze hasn’t cooled off either. The millions of new traders looking for tendies continue flooding markets and discussion boards with trade ideas. We saw just how strong this group of traders was earlier this year. The dramatic breakouts of overly shorted, low-priced stocks surged, with GameStop (NYSE: GME) leading the way.

While broader markets sold off, it was thought that this “fad” had come to an end. But if you follow social media platforms, including Reddit, Tiktok, and Twitter, the conversation seems to have only just gotten started. This week we continue seeing volatility in the stock market. Large-cap tech stocks remain a pain point.

But if you’re following market momentum, it looks like Reddit penny stocks are back in focus. This came to light as GameStop once again lead the charge as it headed toward $200, breaking above $190 for the first time since February 1st. In turn, this appears to have been the signal and rally cry, which evidently has triggered momentum in the sympathy stocks that were part of the first Reddit breakout. The biggest question now is can the momentum continue? If so, are these on your list of penny stocks to buy or avoid right now?

Best Penny Stocks On Reddit To Buy [or avoid]Reddit Penny Stocks To Buy [or avoid] #1: Express Inc.

Shares of Express surged in mid-morning trading on Monday. The brick-and-click retailer saw its stock jump from an open of $2.52 to highs of $3 before the lunch hour. There weren’t any headlines to associate with the move. However, the sympathy momentum in tandem with GME stock is evident. This year, EXPR was in the spotlight as it had a relatively higher level of short interest. The impending squeeze ended up taking EXPR stock to highs of nearly $14 before the epic sell-off that would follow.

This week Express is set to release earnings on the 10th before the market open. While expectations are mixed, eyes will likely be on management’s commentary about the outlook for 2021. The company said earlier this year that it expects same-store sales, a key metric of retail health, to be down about 3%.

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Last year, social distancing measures shuttered physical store locations. However, despite losing on in-person retail sales, Express was able to see growth from its online offering. Aside from Monday’s momentum, attention this week will most likely be on Express earnings.

reddit penny stocks to buy Express Inc. EXPR stock chart#2: Zomedica Corp.

Another one of the famous Reddit penny stocks that was ultimately restricted by Robinhood is Zomedica. What I will say is that the penny stock had already built a reputation even before the social hype. The biggest reason why had everything to do with the pending commercial launch of its TRUFORMA veterinary diagnostic product. The company is setting the end of this month to begin its roll-out. It has also raised millions of new cash to build upon this initiative.

ZOM stock has made an epic climb from under 10 cents last quarter to over $2.90 earlier this year. On Monday, the company announced that it had effected the exchange of all of its outstanding Series 1 Preferred Shares for its common shares. Robert Cohen, Chief Executive Officer of Zomedica, commented: “As you know, since our fundraising round in July of 2020, we have wanted to rationalize the Preferred Shares. Due to the terms of these shares, they are considered to be a detriment to Zomedica, its future growth, and the interests of our common shareholders. For historical reasons, although the Company received $12 million in exchange for the Preferred Shares, the Preferred Shares were entitled to a $108 million liquidation preference and a 9% royalty on the net sales of Zomedica and its affiliates. The exchange of the Preferred Shares for common shares eliminates this potential detrimental effect, results in a “clean” balance sheet for the Company, and removes what was, in our opinion, a potential overhang on the common shareholders.”

With TRUFORMA set to launch and sales teams trained and ready, there’s more than just Reddit hype behind the momentum in ZOM stock. As the commercial launch approaches, it will be important to see how the market reacts to steps taken by Zomedica.

reddit penny stocks to buy Zomedica Corp. ZOM stock chart#3: Nokia

It’s sometimes funny to think that a company like Nokia would be considered a meme stock. It was one of the names on the list of Reddit stock benefiting from the January breakout. Shares of NOK jumped to highs of $9.79 before falling back below $5 during the following weeks. Needless to say, like Zomedica, the company had already built a focused base in the market. After instituting a new CEO, Nokia had been a bit shaky as investors wanted to see how Pekka Lundmark would make his mark on the company.

Fast-forward to now, and NOK has become one of the top 5G penny stocks to watch. Last month the company inked a multi-year 5G deal with A1 Austria. Nokia will deliver nationwide 5G coverage across the country and further enhanced its existing relationship with A1 Austria.

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Tommi Uitto, President of Mobile Networks, Nokia, discussed the deal further. “We have already worked collaboratively with A1 on a number of exciting projects, and we take this expansion project as an affirmation that our technology is best-in-class. We look forward to embarking on this next journey as their trusted partner.”

With companies like Huawei losing international market share, some speculation has arisen about Nokia and even Ericsson extending their lead in the wireless market outside China.

reddit penny stocks to buy Nokia NOK stock chartAre Reddit Penny Stocks Worth It?

Just like any market trend, you’ve got to weigh risk and reward. In this case, the potential reward can come as volatile trading has taken these penny stocks higher. The potential risks are that this becomes a repeat of January. These stocks shot up big but then came crashing down shortly after. If you’re looking for penny stocks to buy and aren’t used to higher levels of volatility, it’s also important to understand what the companies have going on that could offer a value proposition if/when this Reddit momentum dies down.

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