Penny Stocks To Buy For Under $5; Are They Worth The Risk?
There are so many traders in the stock market today searching for top penny stocks to buy. These high-risk assets have been a source for some of the biggest winning trades over the last few years. I’m not only talking about the one and 2-day moves that these cheap stocks can make.
I’m also referencing companies that go on to build sound businesses from the ground up. Just look at some of the original meme stocks or companies developing vaccines early on during the 2020 pandemic. Many of these former penny stocks have gone on to climb hundreds or even thousands of percentage points over time.
What are penny stocks? By definition, we’re talking about low-priced shares. Most define penny stocks as those trading below $5 per share. In many cases, the thought of OTC stocks has become more mainstream.
The fact is that there are plenty of Nasdaq and NYSE-listed penny stocks to watch as well. In this article, we’ll look at a few that can be purchased for under $5 right now. Will they be worth the risk, or should they be avoided entirely?
Top Penny Stocks To Buy For Under $5
- ARCA Biopharma (NASDAQ: ABIO)
- Spectrum Pharmaceuticals Inc. (NASDAQ: SPPI)
- Progenity Inc. (NASDAQ: PROG)
- Outlook Therapeutics (NASDAQ: OTLK)
ARCA Biopharma (NASDAQ: ABIO)
Shares of ARCA Biopharma shot higher during premarket trading on December 2. The company has worked on the development of therapies for cardiovascular disease. This has helped extend its work into other verticals, including potential treatments for SARS-CoV-2.
Read more: Metaverse Penny Stocks To Watch In 2021
This week, the company reported completing enrollment in its ASPEC-COVID-19, ARCA’s Phase 2 trial evaluating treatment in hospitalized patients. In total, 160 patients were enrolled in the US, Argentina, and Brazil. With topline data expected next quarter, ABIO stock could be one to watch.
Dr. Michael Bristow, ARCA’s President and Chief Executive Officer, commented, “Completing enrollment in ASPEN -COVID-19 is a significant milestone for the development of rNAPc2 as a potential treatment option for patients hospitalized with COVID-19 who have biomarker evidence of coagulopathy…We look forward to sharing the top-line trial results in the first quarter of next year and reviewing the findings with the FDA.”
As cases of the new Omicron variant continue rising, stocks with exposure to treating the virus could remain in the spotlight.
Spectrum Pharmaceuticals Inc. (NASDAQ: SPPI)
When looking for penny stocks to buy, some try to identify a few that have reached fresh lows. The basic strategy for making money with cheap stocks is to buy low and sell high. With that, you can imagine why traders might look for stocks near 52-week lows, for instance.
Spectrum Pharmaceuticals fits this mold and reached new lows of $1.49 on December 1. Following that drop, however, SPPI stock ended up mounting a solid rebound to highs of over $1.70. Looking at the stock’s chart, you should also see that trading volumes have been much higher recently, during the November drop. This selling pressure began after the company reported its third-quarter earnings.
Management discussed its pipeline progress, including an NDA submission for its poziotinib platform. According to the company, this is still on track for 2021 under a Fast Track Designation. The treatment is currently being developed to treat Non-Small Cell Lung Cancer. In addition, Spectrum’s ROLONTIS platform development is heading down the path for submitting a Biologics License Application. This treatment is being evaluated in decreasing infection for patients with non-myeloid malignancies.
With these developments underway, Spectrum has begun a management transition heading into the new year. In particular, the company’s current President and CEO, Joseph Turgeon, will retire by the end of December with current Chief Commercial & Operating Officer Tom Riga taking his place.
Progenity Inc. (NASDAQ: PROG)
Shares of Progentity have experienced a strong move since September. As we’ve discussed many times, the company’s gastrointestinal health and oral biotherapeutics platform development. The women’s health treatment company develops molecular testing devices providing diagnostic sampling and drug delivery solutions for more precise therapies for personalized medicines. Progenity’s Preecludia test is at the front of the line. The company recently engaged an advisory firm and launched a managed process to license Preecludia to commercial partners.
PROG stock has also become a focus for traders seeking potential “short squeeze” stocks. These are ones with higher levels of short interest from investors betting against companies. In this case, however, Progenity has managed to surge thanks to continued progress. At the beginning of the quarter, PROG stock was trading around $1.20 and has since reached highs of over $6.
This week, the company shed more light on a recent patent win. The new patent for single-molecule detection technology “overs critical methods for counting target molecules, obviating the need for sequencing,” said Matthew Cooper, General Manager, Diagnostics. This adds to the company’s growing roster of patents and patents pending; 180 issued & 220 pending.
Also, if you’re still looking for penny stocks with higher short interest, PROG remains on the list. According to data from Fintel, the short float percentage sits shy of 19% as of this article.
Read more: Are Reopening Penny Stocks Worth Buying After the Market Crash?
Outlook Therapeutics (NASDAQ: OTLK)
Shares of Outlook Therapeutics have been under severe pressure during the second half of 2021. However, some recent events may shed a bit more positive light on the company. With a constant focus on developing its ONS-5010 treatment platform, continued financings have added dilution to the market, which hasn’t been received well by traders. Needless to say, when you’re looking at pre-commercial stage biotechs, this is one of the few ways to expand development platforms.
With this, ONS-5010 is Outlook’s treatment candidate for retinal diseases. The latest financing round of $57.5 million is being earmarked for funding the treatment’s progress through an anticipated Biologics License Application approval. According to the company, “If ONS-5010 ophthalmic bevacizumab is approved, Outlook Therapeutics expects to commercialize it as the first and only FDA-approved ophthalmic formulation of bevacizumab for use in treating retinal diseases in the United States, United Kingdom, Europe, Japan, and other markets.”
While this might paint a “pretty picture” on paper, the chart has told a much different story. So what would the catalyst for any bullish light shed on the company right now? If you look at the latest corporate filings, you’ll see that Director Ghiath M. Sukhtian, via their GMS Ventures & Investments firm, recently purchased 16 million shares of OTLK stock. Considering the large purchase, OTLK stock could be one to watch especially considering prior months’ trends.
Penny Stocks To Watch Right Now
If you’re looking for penny stocks to buy right now, starting with a list is key. You want to understand why certain stocks are making the moves in the market. Things like company updates, filings, and even rumors can play a role. As they say, knowing is half the battle & there’ve been several recent developments to keep in mind if they’re on your list of penny stocks right now.
