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Best Penny Stocks To Buy According To 4 Analysts & Targets Up To $8

Best penny stocks to buy according to analysts.
The post Best Penny Stocks To Buy According To 4 Analysts & Targets Up To $8 appeared first on Penny…

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Want to buy penny stocks? You might have thought about starting by following analysts. Today we look at 4 penny stocks to buy according to a few Wall Street analysts with bullish price targets to go with them.

The thing to remember about analyst ratings is that they usually have an outlook beyond “today.” These firms will dig into things like recent financials, development or product pipelines, and the current industry or market conditions that could contribute to the success or failure of the companies.

Penny Stocks To Buy [According To Analysts]

  1. EOS Energy Enterprises Inc. (NASDAQ: EOSE)
  2. Porch Group Inc. (NASDAQ: PRCH)
  3. FTC Solar Inc. (NASDAQ: FTCI)
  4. Ginkgo Bioworks Holdings Inc.(NYSE: DNA)

1. EOS Energy Enterprises Inc. (NASDAQ: EOSE): +498%

Energy stocks have recharged bullish traders looking for pockets of opportunity. Even with the stock market crash this year, shares of oil & gas and even alternative energy stocks have jumped. EOS Energy focuses on clean energy systems using its Znyth aqueous zinc battery platform. It is being designed to compete with traditional lithium-ion batteries already in the market.

EOS reported first-quarter earnings and worse than expected EPS and sales results earlier this month. However, based on comments from company CEO Joe Mastrangelo, it appears that EOS is looking at just a simple bump in the road. Mastrangelo explained in a May update that, “We are building a company ready to deliver safe, scalable, flexible, and affordable energy storage. Our manufacturing capacity expansion is on plan, we are seeing improved first-pass production yields, and we are proud to be working towards a cleaner, brighter energy future.”

Penny Stocks To Buy Now? 4 To Watch Under $1

Though analysts have lowered price targets, firms including B. Riley appear to remain bullish based on price targets. Its analysts have a Buy on EOSE stock and a $7 price target. Despite this being much lower than the previous $13 target, the new outlook is still nearly 500% higher than current price levels.

2. Porch Group Inc. (NASDAQ: PRCH): + 74%

penny stocks to buy Porch Group Inc. PRCH stock chart

Shares of Porch Group continued trading higher on Monday. This extended a move that began earlier this month after the company announced earnings. Porch’s specialty is software development for the home services and insurance industries.

Total revenue for the first quarter reached $62.6 million, equating to a jump of over $35 million compared to the first quarter of last year. “Porch is off to a strong start in 2022…Our vertical software and insurance segments are performing very well and reported substantial revenue increases. This strong performance early in the year gives us confidence in affirming our previously disclosed guidance and highlights why the team is excited about the remainder of the year,” said Matt Ehrlichman, founder and Chief Executive Officer of Porch Group, Inc.

With new approvals in Arizona, Georgia, and Virginia, the company is also on track to leverage particular insights from its current data into its underwriting models. Adding to this, JP Morgan analysts recently initiated coverage of the company. The firm set its rating at Overweight and gave a price target o $8. Based on current trading levels, this target sits roughly 74% higher.

3. FTC Solar Inc. (NASDAQ: FTCI): +80%

penny stocks to buy FTC Solar Inc. FTCI stock chart

Like EOS, FTC is also focused on alternative energy applications. In this case, as the name suggests, the company is part of the solar industry. In particular, FTC provides solar tracking systems and solutions, including engineering and software.

Shares slipped earlier this month after the company reported its latest round of earnings. In addition to headwinds from the broader stock market sell-off, FTC also missed estimates and gave a revenue forecast that reflected delays by solar developers. Regardless, FTCI stock has made some headway going into the end of May. Shares have made a rebound from lows of $2.12 to over $4 at the end of last week.

What to Know About Buying Penny Stocks on May 23rd

What do analysts think about FTC right now? Missed earnings aside, many analysts have remained bullish on the stock. The most recent firm, Northland Securities, initiated coverage on the stock this week. It started FTCI with an Outperform rating and a $7 price target. Considering the penny stock sits just under $3.90, this target is 80% higher right now.

4. Ginkgo Bioworks Holdings Inc.(NYSE: DNA): +200%

penny stocks to buy Ginkgo Bioworks DNA stock chart

Shares of Ginkgo Bioworks have been channel-bound for weeks, but that hasn’t stopped traders from taking advantage of the volatility. Earlier this month, the cell programming company announced plans to develop global biosecurity capabilities in Qatar alongside First Serv. This new partnership aims to build Doha as a critical access point for a pathogen monitoring network.

Considering the uncertainty surrounding numerous viruses, including COVID and now, monkeypox, this news seems to have come at a reasonable time. “Biosecurity in this new era is about applying the cutting edge tools of the biotech age to prevent the next pandemic or infectious disease threat. Proactive pathogen monitoring is an essential part of this effort—we need a robust global weather map to identify and track emerging biological threats,” said Matt McKnight, General Manager, Biosecurity at Ginkgo Bioworks.

What do analysts think about DNA stock? If you look at KeyCorp’s rating, it appears to have taken a bullish stance on the beaten-down biotech stock. The firm has an Overweight rating on the penny stock and a price target 200% higher at $8.

Penny Stocks To Buy

Starting with analyst coverage may be an interesting first step if you’re looking for penny stocks to buy. These firms make a point to dive into company specifics beyond market hype. But, it’s important to remember that they are not always the final say in what the market or stocks will (or won’t) do. With that in mind, it’s always a good idea to have a plan in place and a strategy perfected. According to analysts, these are just a few of the penny stocks to buy right now. Do you agree? Drop a comment if any of these are on your list of penny stocks right now.

The post Best Penny Stocks To Buy According To 4 Analysts & Targets Up To $8 appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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Zillow Case-Shiller Forecast for May: Slowing House Price Growth

The Case-Shiller house price indexes for April were released this week. The “April” report is a 3-month average including February, March and April closings.  So, this included price increases when mortgage rates were significantly lower than today. Th…

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The Case-Shiller house price indexes for April were released this week. The "April" report is a 3-month average including February, March and April closings.  So, this included price increases when mortgage rates were significantly lower than today. This report includes some homes with contracts signed last December (that closed in February)!

Zillow forecasts Case-Shiller a month early, and I like to check the Zillow forecasts since they have been pretty close.

From Zillow Research: April 2022 Case-Shiller Results & Forecast: Putting on the Brakes
With rates continuing their steep ascent and inventory picking up in months since, April is likely the first month of this deceleration as buyers balked at the cost of purchasing a home and pulled out of the market, leading to slower price growth. While inventory is improving, there is still plenty of room to go before it reaches its pre-pandemic trend. Still, coupled with relatively strong demand, that will continue to be a driver for sustained high prices even as sales volume is dropping in response to affordability constraints. As a result, more buyers will take a step to the sidelines in the coming months, which will help inventory to recover and price growth to slow from its peak, leading the market back to a more balanced stable state in the long run and providing more future opportunities for homeownership for those priced out today.

Annual home price growth as reported by Case-Shiller are expected to slow in all three indices. Monthly appreciation in May is expected to decelerate from April in both city indices, and hold in the national index. S&P Dow Jones Indices is expected to release data for the May S&P CoreLogic Case-Shiller Indices on Tuesday, July 26.
emphasis added
The Zillow forecast is for the year-over-year change for the Case-Shiller National index to be 19.5% in May. This is slightly slower than in February, March and April, but still very strong YoY growth.

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Spread & Containment

Airline stocks have been beset by external problems but could now be a good time to invest in a sector many think is in crisis?

It’s fair to say it has been a tough couple of years for the commercial aviation sector and investors in airline stocks. In 2019 the sector enjoyed record…

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It’s fair to say it has been a tough couple of years for the commercial aviation sector and investors in airline stocks. In 2019 the sector enjoyed record passenger numbers and 2020 was expected to be better yet. Low cost airlines were expanding aggressively, as they had been for years, and national carriers, in response, had made strides in cutting costs and introducing other efficiencies.

Then the Covid-19 pandemic struck, devastating the sector. Over the early part of the pandemic when international travel was severely restricted, airlines operated skeleton schedules. Severely reduced capacity, and schedules regularly interrupted by new lockdowns and shifting government policies bedevilled the sector for the next two years.

Even over the past few months which have seen most pandemic-related travel restrictions drop, a spate of new problems has hampered the sector’s recovery. Staff shortages, the result of a combination of the continuing need for those that become infected with Covid-19 to isolate and a tight labour market, have been a major headache. London-listed easyJet recently cut its capacity forecasts as a result of staffing issues.

And last week over 700 Heathrow airport staff voted to strike over the peak summer period, which promises chaos, and hundreds of cancelled flights, if an agreement can’t be reached over pay in the meanwhile. Staff at three Spanish airports are also calling for industrial action this summer and strikes are a threat elsewhere around Europe’s favourite holiday destinations.

Sky high fuel costs will also put pressure on margins this summer and potentially well into next year and a growing cost of living crisis sparked by inflation levels at 40-year highs will not help demand.

Airline share prices have predictably slumped since the onset of the pandemic. EasyJet’s valuation is down over 50% in the past year and over 75% since summer 2018. Its shares haven’t been worth as little as they currently are since early January 2012.

easyjet plc

Hope on the horizon?

But despite the fact the immediate future still looks tough for airlines, there are a number of reasons why investors might consider dipping into their stocks now or in the months ahead.

The first is that the bulk of the problems that have crushed airline valuations over the past couple of years have been external factors outwith control and unrelated to the underlying quality of companies. They are also all problems that are expected to be temporary and will ease in future. Covid-19 restrictions are, with the notable exception of China, no longer a big issue and hopefully won’t return. And even China recently reduced its mandatory quarantine period for anyone arriving in the country from two weeks to seven days.

That’s still problematic but a sign that an end to the dark cloud of the pandemic may finally be in sight. Most airlines were forced to either take on significant new debt or raise cash through equity issues that diluted existing shareholders, or through mechanisms such as selling and leasing back aircraft.

It will take time for that gearing to be unwound and balance sheets brought back to health. But the sector will eventually recover from the pandemic which should see higher valuations return, providing a buying opportunity at current depressed levels.

Airlines that have come out of the pandemic in the strongest positions will also likely gain market share from weaker rivals, improving their future prospects. British Airways owner IAG, for example, currently has access to more than £10 billion in cash after raising capital to cover losses over the pandemic. EasyJet has access to £4.4 billion. That means both should be well placed to cover any continuing short term losses until passenger numbers return to 2019 levels and push their advantage over less well-capitalised rivals.

Both IAG and easyJet have also seen their passenger capacity improve significantly in recent months. Over the all-important summer quarter to September, the latter expects its passenger capacity to reach 90% of 2019 levels despite the ongoing operational challenges. IAG expects to return to 90% of 2019 capacity over the last quarter of the year.

A full recovery to 2019 levels is possible by next year even if higher costs are likely to mean ticket price increases are inevitable. That does pose a risk for near-term leisure travel demand but there is confidence that remaining pent-up demand from the pandemic period will help soften the impact on discretionary spending on international travel that might have otherwise been more pronounced. Western consumers have also, the pandemic period apart, become so accustomed to taking foreign holidays that some analysts now question if they should still be considered discretionary spending rather than a staple.

Despite the transient and external nature of the problems that have hit easyJet’s valuation, not all analysts are convinced the current share price offers good value even despite its depressed level. They still look relatively expensive given the risks still facing the sector at a forward price-to-earnings ratio of close to x160.

iag

IAG could offer better value, currently trading at a price-to-earnings ratio of just x5.8 for next year. It is also expected to reverse return to a healthy profit by 2023. The company also has exposure to the budget airline market through Vueling and Aer Lingus and while it abandoned its move to take over Air Europa late last year it shows it has ambitions to further expand in this area. And it has plenty of capital available to it to make major acquisitions that could fuel growth when the sector recovers.

IAG’s cheap valuation does reflect the risks it faces over the next couple of years but for investors willing to take on a little more risk the potential upside looks attractive.

A dollar-denominated airline stock play

On the other side of the Atlantic, American airlines also suffered during the pandemic but are now recovering strongly. For British investors, dollar-denominated U.S. stocks also offer the attraction of potential gains in pound sterling terms as a result of a strengthening U.S. dollar. The Fed’s more aggressive raising of interest rates compared to the ECB or Bank of England is boosting the dollar against the pound and euro and it is also benefitting from its safe haven status during a period of economic stress.

One U.S. airline that looks particularly interesting right new is Southwest Airlines, the world’s largest low cost carrier. The USA’s domestic travel market has recovered so strongly this year that Southwest expects its Q2 revenues to be 10% higher than those over the same three months in 2019. It’s already profitable again and earnings per share are forecast to come in at $2.67 for 2022 and then leap to $3.84 in 2023. It’s a much more profitable operator than easyHet.

It also, unusually for an American airline, hedges a lot of its oil. That’s expected to see it achieve much better operating margins this year, predicted to reach 15.5% in Q2,  than other airlines being hit by much higher fuel costs. The company isn’t immune to the risk of the impact the inflationary squeeze could have on leisure travel but is seen as one of the most resilient airlines in the sector. It could be a better bet than either of its two London-listed peers.

The post Airline stocks have been beset by external problems but could now be a good time to invest in a sector many think is in crisis? first appeared on Trading and Investment News.

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Falling VIX Spells BIG Trouble For The Bears

If there’s one thing that a bear market – secular or cyclical – feeds on, it’s fear. The further the drop, the bigger the spike we see in the Volatility…

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If there's one thing that a bear market - secular or cyclical - feeds on, it's fear. The further the drop, the bigger the spike we see in the Volatility Index ($VIX). From the CBOE.com website, the VIX "measures the level of expected volatility of the S&P 500 Index over the next 30 days that is implied in the bid/ask quotations of S&P options. Thus, the VIX is a forward-looking measure..." So let's be clear about this. The VIX does NOT measure what's happening now or what just happened last week. Instead, it looks forward to determine expected volatility. High volatility is generally associated with falling equity prices and low volatility typically accompanies rising equity prices.

As fear dissipates, expected volatility drops, and bear markets end. That's the historical formula. Let's start off by looking back to the financial crisis in 2008 and how the spiking VIX unfolded:

The VIX topped in October 2008 and though the S&P 500 hit two lower price points, the bear market ran out of sellers as fear came tumbling down in late 2008 and into the first quarter of 2009.

During the market turbulence in 2014-2016, we saw a somewhat similar pattern:

Q4 2018 was a very short cyclical bear market (less than 3 months), as was the pandemic-led selling in March 2020 (4 weeks), so there really wasn't much time to evaluate the VIX at various low points, but currently we're seeing a similar pattern in the cyclical bear market of 2022:

But the action on the VIX was really strange this week. The S&P 500 saw selling pressure once again, yet the VIX finished very close to a 3-week low. Check out this 1-month 30-minute chart:

From mid-day on Thursday through the early morning Friday, the S&P 500 fell from 3820 to 3750 and the VIX was dropping right along with it. That's extremely unusual behavior. The VIX is looking ahead and it's pricing in less volatility. That suggests that we're being given a signal of a rally ahead. That's the reason the VIX goes down. Less volatility means higher equity prices.

We're heading into a fresh quarterly earnings season and I'll be featuring one company that I believe is poised to make a big run into its quarterly earnings report later this month. To read about it in our next newsletter article, simply CLICK HERE and sign up for our FREE EB Digest newsletter. It only takes a name and email address. There is no credit card required and you may unsubscribe at any time.

Happy trading!

Tom



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