Searching to Buy the Best Penny Stocks? How to Find Potential Winners
Penny stocks can offer traders massive profits through their sheer price volatility. With prices below $5 per share, these tiny companies allow you to snap up many shares. Of course, they can explode in value on market catalysts in a short period. But you must research to discover attractive penny stocks to buy and watch. While higher risk, best practices help you capitalize while controlling the downside.
Defining Promising Penny Stocks
Start building your watchlist by targeting penny stocks with characteristics that signal opportunity. Strong management and industry growth potential top the list. Focus on penny stocks in emerging sectors rather than fading industries.
Seeking penny stocks recently awarded key patents or rolling out novel products can help find companies on the verge of something that could be a source of speculation. Look for penny stocks that have shown a history of breakouts or are showing consistent trends over the last six months. But ensure catalysts are fueling the rise over simple hype or speculation.
Where to Find the Best Penny Stock Opportunities
Reliable penny stock screens help uncover potential big gainers. Screeners on various platforms like True Trading Group allow filtering by price and sector to pinpoint penny stocks to evaluate. Check news feeds like the Benzinga News Feed offered by True Trading Group as well. This includes press announcements for the latest product launches, partnership deals, or milestone achievements for lesser-known companies.
Follow insider and institutional trading moves, unusual options activity, and other alternative datasets that aren’t necessarily mainstream go-tos for retail traders. Once you spot appealing penny stocks, put shares on watchlists to monitor so you can buy at opportune moments as catalyst events unfold.
Research Risks, Grow Due Diligence, Keep It Simple
While penny stocks carry higher risk, diligent research helps avoid pitfalls and filter for quality. Check companies for strong leadership and transparent SEC filing history, financials, and communications signaling long-term vision.
Verify promising press releases against other credible media outlets for confirmation. Cross-reference SEC filings for conflicts and deeper context. Monitor online spaces like social media, forums and boards. It can help gauge public sentiment and look for red flags like pumps from promotional groups.
Capitalize on explosive moves through smart trading approaches. Scale into positions gradually instead of large, lumped buys. This smooths pricing risk over time. Set tiered profit-taking levels to systematically sell portions on sharp upside moves.
It can obviously help lock in returns while retaining shares to capture potential spikes. Use stop losses religiously, continually adjusting these exits higher to protect capital as shares climb. Don’t get greedy chasing peaks, or else risk rapid reversals.
Penny Stocks To Buy For Under $4
With some of the basics covered, today we look at a handful of penny stocks to buy for under $4. But, just because they can be bought for a few bucks, does it mean they deserve a spot on your list of penny stocks to watch? I’ll let you decide.
- LumiraDx Limited (NASDAQ: LMDX)
- Tellurian Inc. (NYSEAMERICAN: TELL)
- Better Choice Company Inc. (NYSEAMERICAN: BTTR)
LumiraDx Limited (LMDX)
LumiraDx Limited is a next-generation point-of-care diagnostics company. It focuses on developing advanced diagnostic solutions for healthcare. Late last month, LumiraDx announced a strategic collaboration with AstraZeneca (NASDAQ: AZN) and Everton in the Community to establish England’s first community-based heart and lung screening hub. Set to launch in this month at the People’s Place, this hub will serve the Merseyside community, providing access to the latest diagnostic technologies and specialist care.
It aims to facilitate early diagnosis and treatment for conditions causing chronic breathlessness. The hub will use innovative diagnostics like LumiraDx’s NT-proBNP test, which requires only a simple fingerstick sample, and artificial intelligence to enhance the detection and prevention of heart failure, COPD, asthma, and other chronic conditions.
This initiative is supported by AstraZeneca’s grant funding and will work alongside Liverpool University Hospitals NHS Foundation Trust and medical technology providers like Lenus Health, Us2.ai, and ArtiQ. LumiraDx’s continued involvement in similar initiatives, including the “Your Heart Matters” Bus with Medtronic, underscores its commitment to improving patient outcomes through accessible diagnostics.
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Overall the long-term impact on the market will depend on the success and public reception of the screening hub. If the hub effectively improves health outcomes and demonstrates the efficacy of LumiraDx’s technologies, it could further bolster the company’s reputation.
Tellurian Inc. (TELL)
Rising natural gas prices have traders looking at companies in the sector. Tellurian, a liquified natural gas company, has experienced an uptick in momentum that coincides with this move. One of the most significant developments also promoting optimism in the company is a big deal with Baker Hughes.
The two inked a deal securing eight main refrigerant compression packages. This is for the first phase of the Driftwood LNG project, which has been a topic of discussion for Tellurian for quite some time.
“This agreement builds on the established collaboration between Baker Hughes and Tellurian as we continue to execute on our scope for the Driftwood Pipeline 200, which includes providing zero-emissions ICL compressor packages for their first deployment in North America. Leveraging our 30 years of experience in LNG and broad portfolio of technologies for the natural gas value chain, we are pleased to support Tellurian also for the Driftwood liquefaction plant with our gas technology solutions,” said Lorenzo Simonelli, chairman and CEO of Baker Hughes.
In the meantime, TELL stock is battling back from taking a hit from Q3 Earnings results that missed the mark. President and CEO Octávio Simões said, “We are having a number of discussions with counterparties for both equity partnership and liquefied natural gas (LNG) offtake for the Driftwood project and investment in the Driftwood Line 200/300 pipeline. We have invested over one billion dollars to develop and advance construction of the fully permitted Driftwood project and remain on target to produce first LNG in 2027.”
Better Choice Company Inc. (BTTR)
Better Choice is a pet health and wellness company. It provides a variety of products for dogs and cats, under the Halo brand. These include kibble, canned food, freeze-dried raw food, treats, and supplements. Their products focus on high-quality, science-based nutrition for pets.
This month, the company announced a significant development in collaboration with Aimia Pet HealthCo Inc. (APH). They have signed a memorandum of understanding (MOU) with KGK Science Inc. for the research and development of a GLP1 supplement for pets. This partnership is poised to address obesity and related health issues in pets. It has become a growing concern worldwide.
Michael Young, Chairman of the Board of Directors at Better Choice, expressed enthusiasm about the partnership. He views the development of the GLP1 supplement as a major opportunity in the pet health industry:
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“We are pleased to make progress with our R&D partners APH and KGK. We see the use of the GLP1 supplement as a significant opportunity for the pet health industry and are assembling top tier partners to help Better Choice and our brands, including Halo, become pioneers in this sector.”
With this tailwind, BTTR stock has begun trading higher heading into December.
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