Penny stocks are stocks of small-cap companies that trade for less than $5 per share. Among these stocks, those that trade for less than $1 per share are often called “penny stocks.” These stocks are known for their high volatility and low liquidity. That’s what can make them attractive to some traders and investors. This post will explore the benefits and opportunities of trading penny stocks under $1.
One of the main benefits of stocks under $1 is the potential for high returns. Institutional investors and large financial institutions often overlook these stocks, which can lead to mispricings and inefficiencies in the market. When a company’s stock price is low, even a tiny development can cause a significant change in its stock price. This can lead to substantial gains for traders and investors who can identify undervalued companies and exploit these market inefficiencies.
Opportunities and Risks With Penny Stocks
Another benefit of trading penny stocks under $1 is the low entry barrier. Compared to other investment opportunities, cheap stocks require relatively low capital to get started. An investor can purchase many shares in a low-priced stock with as little as a few hundred dollars. This low entry barrier makes it easier for new investors to test their investment strategies without committing large sums of money.
Additionally, trading penny stocks under $1 can allow investors to learn about the stock market and develop their trading skills. These types of stocks often have less information than larger, more established companies. So researching and analyzing these stocks can be a valuable learning experience for investors. Trading stocks like these can also help investors develop their risk management skills as they learn to manage the high volatility and potential losses associated with these stocks.
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There are also some unique opportunities in trading penny stocks under $1. For example, some companies may be in the early stages of growth and have significant potential for expansion. These companies may be trading for less than $1 per share because they are not yet profitable or are still developing their business model.
Another opportunity to trade penny stocks under $1 is the potential for merger and acquisition activity. Small-cap companies are often targeted for acquisition by larger companies looking to expand their business or enter new markets. If a company is acquired, its stock price can increase significantly, providing a potentially lucrative opportunity for investors.
Penny Stocks To Watch Under $1
Despite these benefits and opportunities, trading stocks under $1 has risks. If you know how to navigate those risks, then it could be well worth it for the potential reward. Will the following list of penny stocks include the next round of big movers? I’ll leave that up to you to decide. This also continues the list from our article, “Best Penny Stocks To Buy Under $1? 4 To Watch Now.”
Blue Star Foods Corp. (BSFC)
There is a trend in sustainable investing and ESG (environmental, social, and governance) acting as a lynchpin to “sustainable” portfolios. That’s what Blue Star aims to capitalize on. It takes up ESG initiatives in seafood processing, packaging, and sales. It also took a jump into the dog food business. Earlier this quarter, Blue Star entered into a supply agreement for 1,150 tons of wild-caught cod per year with Just Food For Dogs with an auto-renewal option provision.
This week the company reported results from its Recirculatory Aquaculture Systems subsidiary, Taste of BC Aquafarms. In response, Ben Atkinson, the President of Taste of BC, explained, “Over the second half of 2022, we were able to increase biomass within our pilot facility an additional 10MT to 50MT…Overall, our fish are growing to expectations and continue to validate the model used to design our upcoming expansion facility.”
Against this backdrop, momentum has built up in BSFC stock.
Asensus Surgical Inc. (ASXC)
Shares of Asensus Surgical have been moving since the beginning of 2023. The medical device company’s Senhance Surgical System is being developed to increase surgeon control and reduce surgical variability in performance-guided surgery.
In a recent earnings update, not only did EPS results beat expectations, Asensus outlined its numerous initiatives in the pipeline. These included plans to gain FDA clearance for Senhance for pediatric indication. There are also plans to integrate system testing and preclinical evaluation for the LUNA Surgical System. This was the platform that was revealed earlier this year.
If ASXC stock is on the watch list, next week could be one to keep in mind. Asensus presents at the Oppenheimer Annual Healthcare Conference on March 13th.
Akebia Therapeutics (AKBA)
Akebia is another one of the cheap biotech penny stocks to watch this year. Shares have continued trading higher after AKBA stock hit 52-week lows in October. The penny stock has traded as high as $1.20 over the last several months, thanks to updates from the company.
One of the more recent milestones came after Akebia announced receipt of an interim response from the FDA. This was to appeal its vadadustat treatment of anemia. It met with the FDA to discuss the next steps regarding the interim response to its Formal Dispute Resolution Request from a Complete Response Letter last March.
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Other milestones, like a favorable Committee for Medicinal Products for Human Use (CHMP) opinion in Europe for the drug candidate, have also helped boost sentiment in the market. The CHMP of the European Medicines Agency adopted a positive opinion. This was regarding recommending the European Commission to approve Vafseo™ (vadadustat) for treating symptomatic anemia associated with chronic kidney disease. This will be reviewed, and a final decision will be delivered. Akebia said the decision would be made within two months.
This week Akebia reports earnings on the 9th, which could be something to keep in mind if it’s on your radar.
List Of Penny Stocks To Watch
- Blue Star Foods Corp. (NASDAQ: BSFC)
- Asensus Surgical Inc. (NASDAQ: ASXC)
- Akebia Therapeutics (NASDAQ: AKBA)
- Sono Group (NASDAQ: SEV)
- Myomo Inc. (NYSEAMERICAN: MYO)
- vTv Therapeutics (NASDAQ: VTVT)
- Novo Integrated Sciences (NASDAQ: NVOS)
