Are These Cheap Penny Stocks Worth The Risk?
It’s well-known that penny stocks are higher risk assets compared to many higher-priced stocks in the market. But with that risk can come a big reward. A lot of this has to do with the price of these stocks. By definition, penny stocks are shares of companies that can be bought for under $5.
Considering that even the highest-priced penny stock only needs to move 50 cents to record a meaningful gain, you start to quickly see why these have become so attractive. It’s important to keep in mind that the same shift in price to the downside can equate to meaningful losses all the same. So if you’re on the hunt for the best penny stocks to buy right now, determine what will be “best” for your personal trading strategy.
Robinhood & Penny Stocks
I’d say that the last 16 months have been an eye-opener for the market and retail traders alike. Since the pandemic first began, a flood of new money came into the stock market. It wasn’t only from hedge funds or billionaire investors. It was also from a new crop of retail traders, many of who had never touched a stock in their lifetime.
Since mobile apps like Robinhood made it easy to access the market, they became the retail community’s platform of choice. This is where terms like “Robinhood traders” and “Robinhooders” began making their way into the stock market vocabulary.
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The one downside to penny stocks on Robinhood, specifically, is that users are limited to Nasdaq and NYSE-listed names. Besides a few exceptions, OTC penny stocks are inaccessible to users of the platform. This isn’t necessarily a bad thing. But it is something to realize when it comes to Robinhood penny stocks.
Penny Stocks To Buy On Robinhood For Under $4
In any case, there are still plenty of cheap stocks to choose from. If you understand the risk and potential reward, it doesn’t hurt to start putting a list of penny stocks together. Today, we’ll look at 3 that can be bought for less than $4.
- Pintec Technology Holdings Limited (NASDAQ: PT)
- Kaixin Auto Holdings (NASDAQ: KXIN)
- Powerbridge Technologies Co. Ltd. (NASDAQ: PBTS)
Pintec Technology Holdings Limited (NASDAQ: PT)
We talked about Pintec Technology over the weekend. One of the things cited was the fact that financial stocks could be in for a busy week. Multiple financial institutions are set to report earnings, which could shed some light on sector stocks. Pintec offers a technology platform enabling financial services in China.
Last Friday, the company posted a 6K showing Pintec agreed to acquire all the equity interests in Riche Bright Securities Limited. This is a securities brokerage firm based in Hong Kong and registered with the HK Securities and Futures Commission. This week, things kicked off with more acquisition news.
Pintec announced that it would acquire Shenzhen Jishengtai Technology Co. Ltd. Jishengtai designs and implements an end-to-end Broker Supplied System for automatic order matching and securities trading execution. This is the core system of Riche Bright Securities Limited.
“From a financial perspective, we expect the acquisition of JST and RB to be neutral to accretive to PINTEC’s non-GAAP earnings per share in the first full fiscal year after the transaction closes.”
Steven Sim, Chief Financial Officer of PINTEC
Kaixin Auto Holdings (NASDAQ: KXIN)
Another one of the trending penny stocks on Robinhood to watch today is Kaixin Auto. The company offers access to used cars in China. Kaixin focuses on luxury brands including Audi, BMW, Mercedes-Benz, Land Rover, and Porsche.
The last few months have been relatively flat for KXIN stock. However, compared to where it was trading at the beginning of Q4, 2020, the penny stock is trading much higher. One of the catalysts that helped propel Kaixin was its share purchase agreement with the shareholders of Haitaoche. According to the deal, Kaixin will acquire 100% of the share capital of Haitaoche.
Another surge of momentum came this week. The company announced that Haitaoche Limited has signed into a cooperation agreement with Jingdong Century Trade Limited. Jingdong is an online retail platform (www.jd.com) in China. The focus is tapping into China’s e-commerce auto market.
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The biggest part of this deal is in the numbers. Both parties aim to reach total sales of approximately $308 million worth of Haitaoche consumer vehicles on the Jingdong platform. The sales volume is expected to increase by “at least 50%” annually during a three-year period. The total sales of the cooperation agreement are roughly $1.4 billion, according to Kaixin. Considering that Jingdong serves over 471 million active customers, this could present an interesting opportunity for Kaixin.
Powerbridge Technologies Co. Ltd. (NASDAQ: PBTS)
Shares of Powerbridge Technologies also took off after a big update today. The company announced a strategic cooperation agreement with Huawei Technologies. The two will jointly promote and market their services to local ports and customs in China.
Stewart Lor, President and Chief Financial Officer of Powerbridge, said, “The collaboration between Powerbridge and Huawei will be a great opportunity to accelerate the digital transformation in the industry. We are looking forward to this strategic cooperation which will be mutually beneficial and complementary for both parties, allowing us to create a synergy effect in the market. We are also looking forward to seeking deeper collaboration in providing blockchain solutions in global trade industry together with Huawei.”
Powerbridge is a trade software application service provider. This deal will see the two companies using technologies like blockchain, cloud computing, AI, and the internet of things (IoT) for global trade. The companies expect the collaboration to foster more digital upgrades and solutions for the custom, ports, and special bonded zone in China. Furthermore, with this deal, Powerbridge also launched 2 new products in Smart Port and Smart Customs.
Considering that all of these technologies mentioned (blockchain, IoT, AI, etc.) are hot topics right now, PBTS could be one of the penny stocks to watch. We haven’t seen much attention focused on global trade utilizing these types of tech. So it will be interesting to see how Powerbridge and Huawei can adapt and evolve them in this type of application.
