If you’re like most traders in the stock market today, you’re on the hunt for the best penny stocks to buy now. Heading into the remainder of the week, there are plenty of different trends to follow. Following this week’s FOMC meeting, many expect a Santa Claus rally going into the end of 2021. Without much changing as far as rates and bond-buying tapering slightly, the risk-on environment remains intact.
What does that mean for stocks under $5? These tend to trade independently of broad sector trends. However, it’s hard to ignore such sweeping momentum when there’s an overwhelming wave of bullishness. Take a closer look at ETFs like the Russell 2000 (NYSE:IWM) and the S&P Small-Cap ETF (NYSE:IJR). These are two ETFs that have acted as benchmarks for trading sentiment related to cheap stocks. Both have surged to fresh, all-time highs this week.
With this backdrop heading into the second half of the week, we’re looking at five penny stocks that traders have started following.
5 Penny Stocks To Watch
1. Muscle Maker Inc. (NASDAQ:GRIL)
One of the popular penny stocks to watch this week has been Muscle Maker Inc. Its flagship Muscle Maker Grill promotes itself as a fast, healthy alternative to your typical fast-casual restaurants. One of the core initiatives that the company has prided itself on recently is a new acquisition strategy.
This has involved purchasing other on-brand companies, including Pokemoto, a poké-themed restaurant concept. The company also partnered with a social eCommerce platform, Snackpass, this summer to open the door to thousands of users in 13 markets to handle online ordering and self-serve kiosks, among other things.
The latest milestone, however, has caused a significant stir in the stock market this month. An 8-K filed at the end of October seemed to have gone under the radar until the company’s formal update. At the start of November, Muscle Maker confirmed what details of that 8-K had already been revealed. The company signed a master franchise agreement for 40 units in Saudi Arabia. As this news continues resonating throughout the week, GRIL stock has been red hot.
2. Progenity Inc. (NASDAQ:PROG)
Progenity has been on our list of penny stocks to watch for over a month at this point. When PROG stock was still trading below $1 at the end of September, we highlighted the increased level of short interest in the penny stock. In the article “5 Short Squeeze Penny Stocks To Buy For Under $5 Right Now,” we explained that Progenity’s work in advancing things like its Preecludia test could be something to watch during the final quarter of the year. This test is designed to rule out preeclampsia in pregnant patients.
Fast-forward a few weeks, and the company has reached several critical milestones. One of these is raising $20 million to put into R&D efforts. The others include securing several patents to strengthen its IP portfolio and reducing its debt significantly late last month.
These more significant developments also attracted the attention of analysts. HC Wainwright, for instance, recently placed a Buy on the stock as well as a $4 target. With earnings and a corporate update planned for November 10, PROG may be one of the penny stocks to watch right now.
3. Spectrum Pharmaceuticals (NASDAQ:SPPI)
Shares of Spectrum Pharmaceuticals have steadily recovered from last month’s dip. SPPI stock has put in higher highs and higher lows in the previous four sessions as it reclaims levels above its 50-day moving average. The company’s oncology treatment platform has been a focus for traders over the last few months.
Most recently, Spectrum’s poziotinib combined with KRAS inhibitors had preclinical data presented at the American Association for Cancer Research, the National Cancer Institute, and the European Organization for Research and Treatment of Cancer. According to Spectrum, this combination demonstrated the ability to inhibit EGFR, HER2, HER3, and HER4 signaling. While this was a big step for the company, the market didn’t seem too concerned as SPPI stock continued its slide in October.
So why would there be optimistic speculation right now? Heading into the second month of Q4, Spectrum is set to deliver Q3 results. Similar to Progenity, Spectrum will report financial results and give its corporate update on November 10. Since these will get reported after the market close, you’ll have to wait for the entire session next Wednesday to see these results.
4. Kala Pharmaceuticals (NASDAQ:KALA)
Another name that might seem familiar is Kala Pharmaceuticals. If you read our article earlier this week, “4 Top Penny Stocks To Watch After FOMC Meeting In November,” you would’ve gotten some insight into the company. Aside from it being one of the short squeeze penny stocks to watch, KALA stock has gained momentum thanks to a few other developments that the market seems to have noticed.
I’m talking specifically about Kala’s commercialization platform. Targeting eye diseases, its pipeline includes a few lead treatments. Its EYSUVIS® treatment is for dry eye disease, and INVELTYS®is a treatment of post-operative inflammation and pain following ocular surgery. Aside from adding a new Board member to help with the strategic expansion of Kala’s pipeline, there haven’t been many new updates from the company.
However, this hasn’t stopped analysts from giving their two cents. Most recently, Oppenheimer maintained its Outperform rating on the company. Even in light of cutting its $15 target to $13, it’s still nearly 500% higher than where KALA stock opened on November 4.
5. Owlet Inc. (NYSE:OWLT)
One of the newer names on the list of penny stocks this week is Owlet. Earlier this year, the tech company went public via a SPAC transaction involving Sandbridge Acquisition Corporation (f/k/a NYSE:SBG). Like many SPAC stocks, OWLT has faced some pressure since the transaction was completed. However, after hitting record lows of $3.46, it would appear that the penny stock has attempted to recover.
One of the unique things about Owlet is its technology platform. In particular, the company focuses on digital parenting products. One of the main hurdles it has faced is the FDA’s demand to stop selling one of its products, smart socks. The main concern involved specific marketing claims and functionality. However, some recent updates from Owlet could be a reason for some traders to begin to watch the company again.
Late last month, the company said that it is developing a new sleep monitoring sock that it plans to sell as a consumer wellness product, which may not present similar concerns that the FDA raised, according to Owlet. The company also said that it plans on submitting an application to the FDA seeking marketing authorization for features of Smart Sock that the Administration believed to make the product a medical device.
Heading into next week, eyes are on earnings and a corporate update from Owlet. Following the close of the market next Wednesday, November 10, the company delivers the latest round of earnings. Keep this in mind if OWLT stock is on your list right now.
Penny Stocks To Buy Or Avoid?
With the way that retail trading trends have materialized, momentum and technicals have played a significant role. However, these aren’t the only things to keep in mind if you’re looking for the best penny stocks to buy. This article went over things like short interest, upcoming events, and certain speculative developments to consider. Keeping track of all of these things can help give you added insight while conducting the more extensive due diligence and establishing more data as you build your watch list.