As the broad-based S&P 500 Index toyed with a new record, a number of penny stocks this week are also hitting record highs.
Several equities that began the year as penny stocks, defined as shares that trade for under $5 each, no longer fit into that category.
Chelsea Therapeutics International Ltd. (Nasdaq: CHTP) started 2014 at around $4 a share. Shares surged to 52-week high of $6.83 this month after receiving fast-track approval from the U.S. Food and Drug Administration (FDA) for its drug Northera to treat a rare form of low blood pressure.
Shanda Games Ltd. (Nasdaq ADR: GAME) began the year at $4.54 and is currently trading close to $7. In late January, the company received a non-binding proposal to take the company private for $6.90.
Rite Aid Corp. (NYSE: RAD) was trading right around $5 in early January, rising from $1.57 a year earlier. Shares have since risen to $6.72 as the pharmacy chain works on a turnaround. Helping RAD reach its year-to-date high of $6.87 was an expansion of its distribution agreement with McKesson Corp. (NYSE: MCK).
It's double- and triple-digit gains like those that lure investors to this lucrative, yet risky, group. For those able to handle the risks that come with investing in penny stocks, the rewards can be bigger and faster than other investments.
Following are four micro-cap stocks that have soared this week in price and volume. These are names you'll definitely want to add to 2014's penny stocks to watch list.
Penny Stocks to Watch 2014
Dynasil Corp of America (Nasdaq: DYSL) soared 55.17% to $1.89 intraday Monday. Shares of the Waretown, Mass.-company closed the session at $1.76, up 45% on brisk volume. Sending shares higher was an announcement that tiny DYSL entered into an agreement with giant L-3 Communications Holdings Inc. (NYSE: LLL) for the supply of high-quality optical components. Dynasil develops, manufactures, and markets detection, sensing, and analysis technology products for medical, industrial, and homeland security/defense sectors in the United States and internationally. Over the last 52 weeks, DYSL has traded as low as $0.40 and as high as $2.24.
China Nepstar Chain Drugstore (NYSE ADR: NPD) shares surged 17.39% Monday to $2.70, absent any news. Founded in 1995 with just one store, China Nepstar has grown into a chain of some 2,050 stores in 76 Chinese cities. It is China's largest retail drugstore and is essentially the "local" drugstore throughout the populous Asian nation. Making NPD shares especially attractive to dividend seekers is its 11.41% yield. And a favorable sign to fundamental investors is its zero debt-to-equity ratio.
Lantronix Inc. (Nasdaq: LTRX) shares jumped more than 30% intraday Tuesday to a fresh 52-week high of $3.31 on six times its average daily volume. Behind the robust gains and sharp spike in trading activity was an announcement from the leading global provider of smart IoT (Internet of Things) connectivity solutions; Lantronix has demonstrated firmware that will make different Lantronix products easily configurable to allow delivery of meaningful data to Google Analytics web service. Headquartered in Irvine, Calif., Lantronix has a market cap of 44.72 million. Its 52-week trading range is $1.31 to $3.31.
DARA BioScience Inc. (Nasdaq: DARA) shares climbed better than 25% Tuesday to $3.55. DARA BioScience is a Raleigh, N.C.-based development-stage biopharmaceutical company for oncology treatments. Fueling the rally in its shares was an announcement that the FDA granted Orphan Drug Designation for one of the company's treatments - an intravenous product currently in phase 2 clinical development. Orphan Drug Designation is granted from the FDA to drugs and biologics intended for the safe and effective treatment of rare diseases that affect fewer than 200,000 people in the United States, or that affect more than 200,000 people but are not expected to recover the costs of developing and marketing a treatment drug.
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