The markets are experiencing wild swings every day. While a 20% jump in markets this week technically ended the shortest bear market ever, don't think for a second that we're past the worst of this crisis.
We will see significant volatility in the coming weeks as concerns about credit hammer the banking sector and investors fret about the nuclear bomb that is about to hit second-quarter GDP.
With that in mind, there are still a number of stocks out there that are very intriguing as "Buy and Hold" candidates. Penny stocks - which typically trade for $7 per share or lower - offer high-upside opportunities given the current conditions in the market.
While they could dip in the coming months, now is the time to consider using a variety of strategies, like buying in portions. You can divide your capital into three piles. Use the first to purchase a stake in the stocks today. Should they pull back 15%, buy a second portion, and should they fall another 30%, purchase a third.
Get Your Buy List Ready: COVID-19 has crushed markets, but stocks will bounce higher. This is a once-in-a-lifetime chance to get into great companies at historically low prices, so put these stocks on your buy list now...
Here are three of the top penny stocks to watch for the months ahead...
Penny Stocks to Watch, No. 3
There may be no better "indoor" stock during coronavirus than one that sells apps and video games on mobile devices. Perhaps that's why Zynga Inc.'s (NASDAQ: ZNGA) stock has largely held up over the last few weeks. The $6.4 billion firm is the creator of FarmVille, its best-known game.
Right now, Zynga stock has been held back by broader macroeconomic news. It recently experienced an extremely strong fourth quarter, one that provided a huge source of tailwinds for the firm. Wedbush analyst Michael Pachter called the company's performance in Q4 "near perfect" as he expressed his expectation that the stock would shoot higher.
Given that the company operates in a perfect industry for the current "social distancing" trend, Zynga looks like it can repeat its 56% surge from 2019. Shares currently trade at $6.73.
We project that the stock can conservatively hit $9.50 by the end of the year. That price target would represent a price upside of 40%.
Penny Stocks to Watch, No. 2
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Glu Mobile Inc. (NASDAQ: GLUU) is also a developer of videos games for smartphones and mobile devices. Backed by Chinese tech giant TenCent, Glu Mobile has a diverse portfolio of games that stand to do well with demand rising and people looking for things to do.
Its portfolio includes Cooking DASH, Covet Fashion, Deer Hunter, Design Home, Diner DASH Adventures, and Kim Kardashian: Hollywood. The firm also just announced the release of MLB Tap Sports Baseball 2020. The new game has already supported 40 million franchise downloads and has given the company a steppingstone into new markets in Africa and South America. It has also boosted its presence in Europe thanks to the game's expected reach.
Glu Mobile currently trades at $6.11 per share. However, a bullish case exists for the stock to get back toward the $9 range by the end of the year given the seismic shift in consumer behavior due to the coronavirus outbreak.
Penny Stocks to Watch, No. 1
The final pick today might be very controversial given the state of the retail economy.
But Tanger Factory Outlet Centers Inc. (NYSE: SKT) is the top-performing mall REIT in terms of occupancy rates and retention.
The reason why Tanger is interesting is simple: Commercial real estate is in peril, and with many retail outlets now facing the inability to pay rent, there is speculation that the entire commercial real estate industry will require a bailout. This is very possible.
Tanger is highly exposed right now to a number of potential rental issues over the coming months. But it has proven that it can weather a storm.
It has survived numerous challenges since its founding in 1982, including the '87 market crash, the dot-com and post 9/11 crises, and the 2008 financial crisis. The firm also has one of the strongest management teams in the business that has significant skin in the game. The company may slash its dividend (currently north of 22%) in the coming weeks, but that would be a smart defensive move to protect cash flow.
On the other side of this crisis, expect for outlet centers to be successful retail locations. There will be a lot of deals and a lot of people anxious to get back to their lives. Tanger stock currently trades at $5.87. But a bailout, a quick end to this health crisis, and a strong bounce-back in consumer activity could easily push the stock back to $11 by Q1 2021.
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