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ARNA, FCEL – Hot Penny Stocks

A.J. Watkinson March 5, 2012 Hot Penny Stocks No Comments
ARNA, FCEL – Hot Penny Stocks

Hot Penny Stocks are all about volume.  Big Volume!

We’ll cover a couple of penny stocks that are moving right now on high volume… either up, or down.  In addition, you’ll leave knowing why there’s such a big move.

And telling you what and why is barely worth your time.  So we’ll give you our recommendation as to where the stock is headed next.

This week’s Hot Penny Stocks are: Arena Pharmaceuticals (ARNA), and FuelCell Energy (FCEL)

Arena Pharmaceuticals (ARNA)

Arena Pharmaceuticals is a clinical-stage biopharmaceutical company.  Their primary focus is oral drugs in the areas of cardiovascular, central nervous system, inflammatory, and metabolic diseases.

ARNA currently is running a Phase I clinical trial on a weight loss compound labeled APD 811.  In addition, Arena has completed two Phase III clinical trials of a weight-loss drug Lorcaserin.

From February 21-23rd, an average of 17 million shares exchanged hands per day… with 32 million trading on the 23rd alone.  The 3 month average daily volume is near 3.9 million.

So why the surge in volume?

On Wednesday, the FDA approved Qnexa, which was developed by Vivus (VVUS).  Qnexa is a similar drug to ARNA’s Lorcaserin.  And back in 2010, both VVUS and ARNA had their weight loss drugs rejected by the FDA.

This time around, things have changed.

Obviously, this approval increases the chance that ARNA’s weight loss compound, Lorcaserin, will achieve FDA approval as well.

The verdict?

Add shares of ARNA to your buy list.  The chances of FDA approval have increased for Lorcaserin after Qnexa made it through the gauntlet.  While not a guarantee, it is a strong sign we may see ARNA shares surge in the wake of an FDA approval.

 

FuelCell Energy (FCEL)

FuelCell is a US-based maker of fuel-cell power plants.  FCEL offers Direct FuelCell Power Plants that electrochemically produce electricity using various fuels.  The company markets to electric utilities and independent power producers, universities, government facilities, and water waste facilities… as well as a number of other large commercial and industrial facilities.

Today, over 8 million shares of FCEL exchanged hands.  That’s more than 5x the average daily volume of 1.5 million shares.

Why the move?

FuelCell announced a joint venture with Gernmany’s Fraunhofer IKTS to develop projects in Europe.  These projects include multiple stationary power plants using FCEL direct fuel cell technology.

In this JV, FuelCell will lead market development and retain the majority of ownership through a German subdivision.  The venture looks to capitalize on incentives in place throughout Europe for combined heat and power generation plants running on FCEL technology.

The Verdict?

I’d stay away from FCEL for now.  While they have a great business concept, and generate revenue… the cost of  their products is greater than what they’re selling them for right now.  Even without administrative expenses, the company is still losing money.

Keep an eye on them in the future, as the recent development in Europe may prove to push the company into the black sooner rather than later.  Remember, European nations are much more “green” than the US.  As such, they’ll actually provide subsidies to improve energy efficiency and reduce carbon emissions.

 

Keeping you one step ahead,

 

A.J. Watkinson

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About The Author

A.J cut his teeth while working for more than 12 years on the corporate side of the financial services industry in the suburbs of New York City. In addition, A.J. has successfully traded stocks, options and currencies as an independent trader since the late 90's. Eventually A.J. moved out of the "rat race", landing in North Scottsdale, Arizona. During the past few years, he's worked as the editor of a number of high profile financial newsletters. In this role, he's run trading services for penny stocks, options, currencies, ETFs, and FOREX. While under his direction, each of these trading services had turned in positive performance... something very rare in the financial newsletter industry. In addition, he's been a regular contributor to a number of financial websites- writing under multiple pen names. A.J.'s current goal is to share his real world experiences and success (and failures) in the various financial markets to help others not only make money- but avoid losing it. It's this vision and passion that has led A.J. to launch pennystockreporting.com. Most of all, A.J. hopes to keep the little guy from getting caught up in the highly unscrupulous penny stock pump and dump scene.

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