OCGN) aren’t trading for about 50 cents apiece by accident. While it feels cool to buy a thousand shares of OCGN stock vs. a few shares of Amazon (NASDAQ:AMZN), save yourself the heartache. ” data-reactid=”12″>I am all for a good opportunity, but I don’t know why some investors insist on penny stocks. Names like Ocugen (NASDAQ:OCGN) aren’t trading for about 50 cents apiece by accident. While it feels cool to buy a thousand shares of OCGN stock vs. a few shares of Amazon (NASDAQ:AMZN), save yourself the heartache.
Source: Shutterstock
I will concede this: The one great thing about the stock market is there is a style for everyone. You can be a growth investor, futures trader, deep-value investor, a day trader, options player, or a dividend aficionado. In that list, you can even include penny-stock trader.
InvestorPlace – Stock Market News, Stock Advice & Trading Tips” data-reactid=”40″>InvestorPlace – Stock Market News, Stock Advice & Trading Tips
Some of the names will rally big, putting together epic squeezes that can double or triple the stock prices in just a few days. Maybe OCGN stock will be one of them again. However, I won’t be around to find out. I’ll be sticking to the stocks that are actually working.
Historic Bull Run in Stocks
Until July 20, when OCGN stock jumped about 20%, shares were down 21% from the March low. A bout of buying in late July sent shares from 20 cents apiece to above 90 cents a share a few days later. We’ve now already seen a 50% correction in the stock price, with shares changing hands around 46 cents per share.
Did Ocugen already have “the move?”
It’s certainly possible. That’s the thing with these low-priced penny stocks. You never know when they will suddenly go on a squeeze. In this case, shares rallied about four-fold in just a few days. If you missed that action, you missed all the gains.
AAPL) or Amazon — investors in OCGN stock took on a high-risk investment and for months saw negative returns. ” data-reactid=”50″>Instead of buying a piece of the S&P 500 or Nasdaq — or even better, a common sense mega-holding like Apple (NASDAQ:AAPL) or Amazon — investors in OCGN stock took on a high-risk investment and for months saw negative returns.
Admittedly one could argue that it could have been bought for a quarter and sold for 75 cents, but hindsight is 20/20 in all of these names. If we’re playing that game then I’m buying LEAP call options on Apple and Amazon in March.
statistics support having long-term exposure to this asset class.
Bottom Line on OCGN Stock
Click to Enlarge
Source: Chart courtesy of StockCharts.com” data-reactid=”66″>
Click to Enlarge
Source: Chart courtesy of StockCharts.com
I will just say this on Ocugen: There’s a reason it trades for sub-$1 after hitting resistance near $180 in 2018. Healthy companies do not undergo 1-for-60 reverse stock splits like this one did in September 2019.
If you’re not convinced by now, maybe you will consider OCGN stock a poor investment when looking at the fundamentals. The company has no revenue, runs an annual deficit, and does not generate positive free cash flow.
With $3.2 million in cash vs. current liabilities of $3.3 million, Ocugen likely has enough cash on hand to cover its short-term obligations. Long-term debt of $1.6 million is not a back-breaker either.
Literally, zero. How can we possibly evaluate a stock on a fundamental basis with that being reality?
Maybe it pans out for Ocugen and I wish the team (and its investors) the best of luck. But any success they find will be without me as a shareholder.
Click here to see what Matt has up his sleeve now. As of this writing, Matt did not hold a position in any of the aforementioned securities.
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