Penny Stocks to Watch for February 2021

In a recent video on the Peter Leeds YouTube channel, I say that one of the worst mistakes an investor can make is to believe that “things will be different this time around.” In other words, it can be dangerous for an investor, especially a novice one, to ignore the recurring patterns of financial and economic history.

But the past year or so has truly thrown a lot of people for a loop. And rightly so – we seem to live in unprecedented times, with digital technologies delivering information to our doorsteps almost immediately, and of course, the novel coronavirus shaking our society to its very core.

Both of these factors have changed the way many people invest, and I expect to see further upheavals in the financial markets in the years ahead. Read below for my top penny stock picks, which should in my opinion weather this tumultuous environment.

First, Some Updates …

Blink Charging Co. (BLNK) 

I first featured electronic vehicle charging company Blink Charging Co. (BLNK) in this column way back in June 2019 and then featured it again in October later that year after it charted a 65% climb in value.  However, Blink Charging Co. was hard pressed to hold onto those higher prices. At the time, I wrote that, notwithstanding any volatility ahead, “I’m nevertheless still really liking BLNK as a long-term hold – and I think investors with patience to spare may find the company to be an intriguing proposition.”

I sure hope some of you longer-term readers listened to me, because the stock may well be among the Peter Leeds team’s biggest success stories yet. It’s currently up 3,013% over the past year, and I couldn’t be happier for the Peter Leeds newsletter subscribers and Investopedia readers who benefited from the trade.

So what’s next? I tend to err on the side of caution, and these levels seem untenably high to me given the company’s financials. On the other hand, investor confidence in Blink Charging Co. is sky-high at the moment, and a recent mention on the Reddit investment boards may draw more eyes to the stock.

Still, this is an immensely risky bet, in my opinion. Consequently, I would probably get out of the position with a “mere” 3,000% profit.

ToughBuilt Industries, Inc. (TBLT)

I’m so happy about this one. ToughBuilt Industries, Inc. (TBLT) is up almost 60% since I discussed it in last month’s edition of “Penny Stocks to Watch.” It’s nice to see the underdog win for once, with sales soaring at an average of approximately 30% over the past five years.

But despite some especially excellent revenue news lately, ToughBuilt stock may have risen a little too high a little too fast. Its relative strength index (RSI) of 83.56 leads me to believe that the stock is overbought at the current levels, and the price may not be quite warranted by the financials – at least not yet. Over the long term, I believe that there could be at least 30% to 40% more upside, but I believe that investors will see a big pullback pretty soon.

First Majestic Silver Corp. (AG)

I’ve featured First Majestic Silver Corp. (AG) numerous times in my newsletter, and my subscribers have benefited by seeing that price triple throughout 2020. I also included First Majestic in my “Penny Stocks to Watch” back when it was a penny stock and trading under $5, and the price has skyrocketed since then all the way to close to $15 levels.

As anybody who has watched my YouTube channel, subscribed to my newsletter, or read this column can attest, I’m very bullish on the junior precious metals miners. I’m also especially optimistic about the silver miners, which have been undervalued for far too long. 

Is it time to exit First Majestic Silver stock? Absolutely not, in my opinion. I expect 2021 to be an even better year for shareholders, with the company reporting increasingly promising results with each quarter and stock market volatility spurring the flight to safety stocks like the precious metals.

… And Some New Ones

Gold Resource Corporation (GORO)

There’s been a lot of negative news flow around Gold Resource Corporation (GORO) lately due to its spinoff of Fortitude Gold. Shareholders loathe nothing more than uncertainty, and Gold Resource has plenty of that right now – hence its bargain-basement price of $2.60.

Rising commodity prices over the next year should remedy that situation soon enough, in my view. I’ve been bullish on the junior gold miners for a while now, including Gold Resource, and I believe that $2.60 or thereabouts should be the bottom for the stock (unless, of course, something drastic and unexpected happens to the miner and/or its mines). That risk is more than reflected into Gold Resource’s low share price, however, and the reward here may be high.

Arcadia Biosciences, Inc. (RKDA)

Arcadia Biosciences, Inc. (RKDA) manufactures and sells agricultural chemicals and technologies. The stock price recently fell off a cliff when it announced a direct offering, spurring a selloff on fears of dilution. But I still believe that Arcadia Biosciences is a good bet, with a line of industry-leading products that could, in my opinion, survive a recession and even flourish.

The revenue figures from the past five years are dispiriting, to be sure. But a few more distribution agreements (of the kind Arcadia signed with Tritium 3H) could help remedy this situation considerably. I’ll be looking for Arcadia stock to rise sustainably beyond $3.50, which it’s had some trouble doing so far. If it’s able to get past that level, however, then I think the company’s shareholders will have a good 2021.

Best Brokers for Penny Stocks

Interactive Brokers

Interactive Brokers’ very low per-share trading commission of $.005 ($1 minimum per trade) and up-to-the-split-second real-time margin calculations are ideal for penny stock traders. IBKR Lite clients can trade penny stocks for $0.

Charles Schwab

Schwab’s research pages point out the exchange on which a stock trades, which will keep you informed of the inherent risk. There are a variety of platforms available; the StreetSmart platforms have customizable charting and streaming real-time quotes. Schwab does not charge trading commissions on all stocks (including penny stocks) and ETFs.

Penny stocks are volatile and can generate catastrophic losses. Price levels in this article are hypothetical and do not represent buy recommendations or investment advice. Keep in mind that it’s your responsibility to make trading decisions through your own skilled analysis and risk management.

Peter Leeds is the author of several books, including the international bestseller, “Penny Stocks for Dummies.” He and his team also issue a newsletter devoted exclusively to penny stock picks and analysis, as well as a popular YouTube channel PeterLeedsPennyStocks.

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