The market is heating up and penny stocks are going along for the ride. Many cheap stocks followed the S&P to higher levels over the past few weeks. If the market continues to rally, there might be more gains ahead for this group.
Stock Market News
Stocks are heating up as the U.S. and China are reportedly drawing closer to a phase-one trade deal. Today, Bloomberg reported that a plan to roll back tariffs between the two countries is in the works. The news got a warm reception on Wall Street, where tariffs have squeezed corporate profits for well over a year. Stocks are rallying, but don’t break out the champagne yet. The deal calls for sequential tariff roll-backs based on the progress of trade negotiations between the two countries.
In an interview with the Wall Street Journal, CMC Markets analyst David Madden gave his take on the story. “This is a foundation for more positive things to come because this is real progress,” said Madden, “I think it would have caught some traders off guard.” The news bolsters the bull case for stocks in the fourth quarter.
Best Penny Stocks to Trade This Week
While the bluechip stocks head to new highs, these lesser-known cheap stocks are also notching serious gains. These are some of the best-performing penny stocks this week, and they could be great candidates for momentum traders.
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FuelCell Energy, Inc. (FCEL)
Up 101.57% Yesterday
Shares of FuelCell are exploding after the company announced it was expanding its carbon capture agreement with Exxon. The deal generates up to $60 million in revenues for the company, a sum equal to more than two-thirds of FuelCell’s entire market capitalization. FuelCell’s proprietary technology uses carbonate fuels to filter and remove carbon dioxide on a large, industrial scale.
This 50-cent stock was trading for over $8 in February so, if it gets its act together, it has massive upside potential.
comScore, Inc. (SCOR)
Up 26.51% Yesterday
ComScore rallied yesterday only one day after releasing a dismal quarterly earnings report. The company had an unprofitable third quarter and missed consensus estimates for revenues by over 60%.
Inexplicably, comScore rallied after the earnings report and continued rising into Wednesday. The company also announced a CEO switch on their earnings call, but that seems like an unlikely catalyst for such a large rally. It seems like there were big-money traders buying the dip. Do the hedge funds know something we don’t? Almost certainly yes. ComScore is trading for less than book value, so if the bulls are right there is a lot of room for this stock to climb.
ASLAN Pharmaceuticals Ltd. (ASLN)
Up 29.55% Yesterday
It’s been a rough year for shareholders of this micro-cap biotech firm, but relief might be in sight. Since hitting a low around $1.50 per share, ASLAN appears to be making a steady climb higher. Shares jumped yesterday, only a few days after the company reported underwhelming sales and earnings on its Q3 report. Despite the miss, this stock clearly has some fans in the market. Zack’s initiated a ‘strong buy’ rating on this Asian biotech stock just two days after it released its Q3 report.
Stage Stores, Inc. (SSI)
Up 16.48% Yesterday
First off, that is one handsome chart! Shares of Stage Stores have more than tripled in less than two months, and yesterday it jumped another 16% without any obvious catalysts in the news. This small retailer was near bankruptcy over the summer. But, in September, Stage announced it was shuttering over 40 stores and converting to an off-price model. Since then, Investors appear to be drinking the metaphorical Kool-Aid. This stock has had an incredible run and is showing no signs of slowing down.
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