Over the years, plenty of investors have managed to make money with penny stocks. Even now, people look for hidden gems from among the plethora of such stocks. It goes without saying, if you pick the right stocks there is a lot of money to be made.
This is easier said than done, the best way of selecting the penny stocks to buy is thorough conducting research. There are many good ways to do this is. For instance, keeping a close eye on the market and reading up on the latest penny stock news. Here is a look at 3 penny stocks that investors should watch closely:
Top Penny Stocks To Buy [or Avoid]: Protalix BioTherapeutics Inc. (PLX)
To start things off, I introduce Protalix BioTherapeutics Inc. (PLX Stock Report). This is a biotechnology company that develops recombinant therapeutic proteins to mainly treat inflammatory diseases. The company currently has 1 treatment undergoing Phase 3 trials and 2 other treatments in Phase 2. In addition to this pipeline, the company has already received FDA approval for its Elelyso product.
Early on October 17th, the company announced some big news that has sent its stock flying. Prolatix announced positive data from the Phase 3 switch-over study of Pegunigalsidase alfa to treat Fabry disease.
All of the progressing patients and 66.6% of the fast-progressing patients achieved the therapeutic goals. Thanks to this announcement, the company’s stock is up over 60% thus far. Are shares setting up for a slide back or continue higher before next week?
Top Penny Stocks To Buy [or Avoid]: Hepion Pharmaceuticals Inc. (HEPA)
Continuing with another biotechnology penny stock, we have Hepion Pharmaceuticals Inc. (HEPA Stock Report). This company develops targeted therapeutics for liver disease from non-alcoholic steatohepatitis. Hepion’s lead drug candidate, CRV431, reduces liver fibrosis and hepatocellular carcinoma tumor burdens.
Recently, Hepion revealed some pretty big penny stock news as well. The Journal of Pharmacology and Experimental Therapeutics published its research article regarding the treatment of chronic liver diseases.
This article highlighted how CRV431 could be a potential drug candidate for chronic liver diseases. This prompted Hepion’s share price to fly 48% on strong premarket volume. Is HEPA stock set to exit penny stock territory or has it set up for a big drop before next week?
Top Penny Stocks To Buy [or Avoid]: Can-Fite BioPharma Ltd. (CANF)
The final biotechnology company on this list focuses on quite a few things. Can-Fite BioPharma Ltd. (CANF Stock Report) aims to create treatments for cancer, inflammatory diseases, and sexual dysfunction. As of now, the company has 5 ongoing clinical trials. The lead candidate is Piclidenoson for arthritis which has a $35 billion market potential.
Can-Fite had 2 news bombs reach investors resulting in the penny stock gapping up 66% early on October 17th. Two days ago, Can-Fite completed its patient enrollment for its phase 2 NASH study of Namodenoson.
Furthermore, the company is holding a European conference on phase 3 drug candidate Piclidenoson with Gebro Pharma. Despite these big, early gains, shares rapidly consolidated. Will the trend persist or can CANF stock recover?
What Are Penny Stocks?
In this article, you’ve seen 3 penny stocks that may be good to watch depending on your strategy. But if you read the line, “ready to leave penny stock territory,” and are confused, that’s ok. What are penny stocks?
The standard definition of a penny stock is a stock that trades below $5 a share. This is according to the overseeing body of the stock market, the Securities & Exchange Commission. However, if you ask most people who look for penny stocks to trade, they’ll tell you the upper limit is $1.
No matter where you stand on the topic, it’s important to understand the basics. Terminology is one of these basics. Since there’s more that goes into buying penny stocks compared to blue-chip stocks, having a good understanding of the market can set you up for success. Then again, it’s also important to know if penny stocks are right for you. That has a lot to do with the amount of risk you’re able to handle.
Should I Paper Trade First?
Simply put, if 20% swings (up or down) in price are too much to handle, you might want to take a seat on the sideline and paper trade for a little bit. If you get shaken out of a trade that ends up being a winner, at least you’ll lose paper money. What’s paper trading? This is a process of signing up for a faux trading account.
You can use fake money to buy and sell stocks. The upside is that if you make the wrong choice or exit a winning trade on an intermittent dip, you won’t lose real money.
The downside is that if you make a winning trade, you don’t get to keep the fake money. Many new or less experienced traders will paper trade for months before using real money. It also allows experienced traders to test out new strategies without risking real money.
What About Free Penny Stock Trading Platforms?
Choosing the right penny stock trading platform is the next in line of importance. Back in the day, traders needed to pick up a phone and call in their orders to sell or buy penny stocks.
You can see the obvious disadvantage someone would have versus being on the floor of the Exchange. Today, however, we’ve got virtual brokers like ETrade, TDAmeritrade, and others that can give users access to immediate trade execution.
Robinhood was the breakthrough platform as it gave investors access to trades without enormous trading fees. Fast-forward to this year and many of the top-tier online brokers are mirroring the model. The downside for some of these platforms is that penny stocks are treated differently.
For example, Robinhood restricts penny stocks to ones only listed on major exchanges. If you want to buy OTC penny stocks, you’re going to have to go to a different broker. But now that there are so many options for low or no-fee trading, there are other places to go.
[READ MORE] How To Buy Penny Stocks On Robinhood
Just be fully aware of how these brokers treat penny stocks, specifically. It may be worth a phone call to speak with a platform representative to break everything down so you don’t have to sift through pages of privacy policies and contract jargon.
Now that you know what penny stocks are, it’s time to get some more advanced education. We won’t go too much into deep education in this article but we do have some articles for you to read that do: