Though the definition of penny stocks can range up to $5 a share, there’s also a market for penny stocks to watch under $0.05. There are companies that have share prices so low than even a move of 0.001 can equate to gains of over 100%. If you thought penny stocks trading above $0.05 were risky, just wait until you see some of these.
Can You Make Money With Penny Stocks Under $0.05?
You can make money with penny stocks but be prepared to deal with incredible amounts of volatility the lower in price a stock gets. Basically, with just as much as you can make from a small move, you can also lose that or more. Take, for instance, a cheap stock traded at $0.001 per share.
A move up in price by as little as 1 tenth of a penny would put the stock at $0.002 a share. That’s a 100% gain with less than a penny in price appreciation. Now, let’s say the stock moves down by just a much (little). That would put the stock at 0, and you lose 100% of your investment.
If you want to explore the riskier side of penny stocks to buy, this is the wild west. When you search for some of these stocks, you’ll come across shell companies, “ghost ship” stock without any news, filings, or updates in years. These stocks stand to catch the eye of regulators trying to protect investors from scams.
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Therefore, they also stand the highest chances of being halted or even delisted from an exchange. So, if you are looking for sub penny stocks, know that even if the price doesn’t move as dramatically as my example, there are many other risk factors to take into account. Needless to say, there are 3 sub penny stocks in particular that have caught some attention recently and worth taking a deeper look at:
Penny Stocks To Watch Under $0.05 #3: Cerebain Biotech (CBBT)
The first on this list of penny stocks to watch below 5 cents, Cerebain Biotech (CBBT Stock Report). Since last Thursday, the stock saw much higher than average volume. Furthermore, its share price has moved up from lows of $0.0007 to as high as $0.0013 on Friday. Additionally, the trading volume on Friday was more than double that of Thursday’s with over 125 million shares traded.
This is an interesting penny stock to watch and I say this because there has been zero news in the last year. However, the company is up to date with its filings on OTCMarkets. This is the first place to try and find any recent information that could clue investors in on what Cerebain is doing that may warrant such momentum. What was found was an 8-K (material event) from July showing the departure of the company’s CFO/COO/Board Member, Wesley Tate.
In any case, the company appears to remain somewhat active on social media. But, that doesn’t really mean much based on only 2 replies to other tweeters this month. Nonetheless, CBBT stock has started to see increased trading volume and price. The corporate site shows that it focuses on Alzheimer’s treatment.
Hopefully, investors won’t forget to look at previous filings from earlier in the year that show Amended maturity dates for promissory notes that come up in September of this year. Also, it’s important to note that in an April DEF 14C filing, the company approved an authorized share increase from 249,000,000 to 1,250,000,000 shares.
When it comes to penny stocks and authorized shares, the more authorized shares there are, the more the company can issue. This is important when it comes to potentially dilutive factors that could add new shares to a company’s float. Will it happen with CBBT stock?
Penny Stocks To Watch Under $0.05 #2: XR Energy Inc (XREG)
This is one of the penny stocks discussed last week following a noticeable surge in trading activity. XR Energy Inc. (XREG Stock Report) traded more than 163 million shares on Friday and reached highs of $0.0017. Despite the tiny share price, that move was equal to a jump of more than 100% above where XREG stock began the week ($0.0008).
As we discussed last week, XR Energy has been relatively quiet on the press wires. Though they keep updated financials, the results aren’t going to knock anyone socks off.
That’s considering only $58k in sales of oil for the first 6 months of the year and showing less than $400 in cash in its bank. However, those looking for top penny stocks to watch right now may come across XREG based on its recent trend.
Penny Stocks To Watch Under $0.05 #1: Cardiff Lexington Corp (CDIX)
The final company on this list of penny stocks to watch under $0.05 is the only one with recent news, believe it or not. Cardiff Lexington Corp (CDIX Stock Report) saw its most active week of trading last week and it all began on August 20. The company posted some penny stock news on Friday that it would be merging with Acela Biomedical, LLC.
Acela will become a subsidiary of Cardiff. According to its announcement, no operational changes are planned and they will continue to grow the company’s hemp business.
In any case, this momentum and trading activity has sparked a bullish move for the tiny penny stock. On August 19, shares opened the week at $0.0006 and by Friday, CDIX stock had seen prices as high as $0.0173. By Friday’s close, CDIX sat at less than half a penny per share.
Given the latest news, what do you think? Is CDIX a penny stock to buy or avoid during the second half of 2019? Comment below.