Whether you’re looking for the best penny stocks to buy now or just putting together a watch list, research is the first place to begin. Understanding why specific stocks are moving the way they are can help when applying your trading strategy to the stock market today.
That’s because not all trading styles are designed the same. Someone trying to quickly scalp penny stocks won’t look at long-term fundamentals. Similarly, someone learning how to make money in stocks and wanting to invest for the long-term likely won’t be hunting for short-squeeze penny stocks.
All of that being said, 2022 has been a unique year for the market & for investors. The massive sell-off and subsequent crash have brought a lot more attention to cheap stocks. According to the definition of penny stocks, we’re talking about shares trading below $5, and there’s plenty to choose from. Does this mean the underlying companies are bad?
Not necessarily, but it requires more due diligence on your part. Unless you’re in it for the long haul, investing in penny stocks this year is much more difficult. The speculative nature of such stocks and their companies leans more toward growth than value. In a market with high inflation and rising interest rates, it can be challenging to pinpoint the right name to put your money into for the next decade.
Are Penny Stocks Worth It?
So, does that mean you should avoid penny stocks entirely? Should you avoid investing in stocks under $5 altogether? The choice is yours to make. However, if you know how to trade, invest, and manage risk appropriately, there’s no reason that penny stocks can’t be worth it.
This year and possibly in 2023, it just might mean technical analysis may take precedence over fundamental analysis. Here’s where things like charting, understanding alternative data and learning how to find unusual trading volume can help.
Today’s article looks at a handful of penny stocks under $4 gaining ground during the last week of the year. This is happening while broader markets continue trading lower. We look into some recent catalysts and try to find any potential upcoming events that could be notable if any of these are on your list of penny stocks to watch.
Maris Tech Ltd. (NASDAQ: MTEK)
Shares of Maris Tech have been on a strong, two-day climb this week. The video technology company made headlines on Tuesday after reporting a significant milestone for Maris. It received a $1.1 million purchase order for a derivative product of its Jupiter AI platform. While the customer wasn’t directly named, Maris-Tech’s update highlighted it as a “leading Israeli defense company” that was an existing customer.
CEO Israel Bar also explained, “Jupiter AI is a powerful and reliable platform, and we are confident that it will deliver exceptional results for our customer. We are excited to see the impact it will have on their operations and look forward to future opportunities to work together.”
The news came just a few weeks after Maris reported a $3.4 million order backlog. The majority of that backlog is expected to be delivered by next June. While the market digests the news, MTEK stock has traded higher. So far this week, shares have climbed from lows of $0.7902 to highs of $1.099.
Eiger BioPharmaceuticals Inc. (NASDAQ: EIGR)
Like MTEK, Eiger BioPharmaceuticals’ stock price has risen this week. On Tuesday, shares traded down to lows of $1.01. Wednesday’s session saw the penny stock rebound to highs of $1.19 during the lunch hour.
Negative sentiment stemming from recent late-stage trial data has weighed on the penny stock. Eiger reported data from a phase 3 trial of its hepatitis treatment, lonafarnib. Though there was “statistical significance over placebo in the composite primary endpoint,” it wasn’t enough to impress the market. In the lonafarnib treatment groups, 8 and 14% of patients reported “serious treatment-emergent adverse events, compared to 10% and 4% of the peginterferon alfa and placebo groups, respectively.
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Eiger said it plans to engage with regulatory agencies despite the market reaction. That will begin with a pre-NDA meeting with FDA anticipated in Q1 2023. Eiger wants to discuss pathways for regulatory submissions.
In addition, this week also saw insider trading reported by company director Jeffrey Glenn. He purchased 100,000 shares of EIGR stock at an average price of $1.2795.
Acasti Pharma Inc. (NASDAQ: ACST)
Biotech penny stocks have been heating up recently. Acasti Pharma’s share price has steadily increased over the last few weeks. Following its dip to new 52-week lows of $0.34, ACST stock managed to pop to highs of nearly $0.60.
A few contributing factors to the move could be related to new analyst coverage and the latest preliminary topline results from a pharmacokinetic study of Acasti’s GTX-101 drug candidate. EF Hutton and HC Wainwright analysts initiated coverage on Acasti this month. Both gave Buy ratings and issued price targets ranging between $2.41 ($3.27 CAD) and $2.50.
The ratings came just days before Acasti’s GT-101 in treating postherpetic neuralgia reported meeting all primary outcome measures in a single-dose study. This week Acasti reported more clinical data on another pipeline candidate, GTX-102, for ataxia telangiectasia. CEO Jan D’Alvise explained, “We plan to request a Type B meeting with the FDA following the receipt of the full PK study dataset sometime in calendar H1 2023 to confirm the proposed Phase 3 study design. If all proceeds as planned, the Phase 3 study is expected to be initiated in the second half of calendar 2023. If the Phase 3 program meets the primary endpoints, an NDA filing for GTX-102 under Section 505(b)(2) is expected to follow.”
With this backdrop heading into 2023, ACST stock has been one of the names to watch this month.
GlycoMimetics Inc. (NASDAQ: GLYC)
Like Acasti, GlycoMimetics has been in a much longer-term uptrend than the two penny stocks mentioned at the start of this list. The company experienced its initial “pop” in November after reporting highlights and financial results for the third quarter. Among them were an EPS beat and commentary on the company’s recent Phase 3 study of its relapsed/refractory acute myeloid leukemia (AML) candidate. Data from a blinded pooled survival data set showed patients lived longer than expected.
CEO Harout Semerjian mentioned, “We are pleased the FDA is aligned with our position. Whether the DMC recommends that we continue the study as originally planned or immediately unblind for full analysis, we remain confident and excited in the potential of uproleselan to improve outcomes in relapsed/refractory AML.”
Looking ahead, the Independent Data Monitoring Committee (DMC) is set to determine if the study should continue as planned or be immediately unblinded for complete analysis if efficacy data is compelling by the end of Q1 2023.
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GLYC stock is also one of the companies seeing insider trading activity this month. In a Form 4 filed this week, Chief Medical Officer Edwin Rock reported purchasing 110,000 shares of GLYC stock at an average price of $2.25 from trades conducted on the 22nd.
List Of Penny Stocks To Watch
- Maris Tech Ltd. (NASDAQ: MTEK)
- Eiger BioPharmaceuticals Inc. (NASDAQ: EIGR)
- Acasti Pharma Inc. (NASDAQ: ACST)
- GlycoMimetics Inc. (NASDAQ: GLYC)
