Can Penny Stocks Outperform The Market This Month?
What are penny stocks? The basic definition is simply any stock trading below $5 per share. Some traders assume that penny stocks are only ones trading on the OTC or “Over The Counter”. But the fact of the matter is that these stocks aren’t limited to exchange. We’re just focusing on the price. With this in mind, let’s go over some of the groundwork here.
Just because something is “lower in price” it doesn’t mean it’s worth it to buy. Sure you can buy 1 share of Apple for around $385. But you can also buy 385 shares of a penny stock trading at $1. If that share of Apple jumped by $1, your percentage gain wouldn’t reflect anything meaningful. But if your position in that $1 stock jumped by $1, you just doubled your money.
Anyone in this scenario would be happy with this win. But also consider this, if Apple went down by a buck, it isn’t noticeable. Then again if that $1 stock simply dropped by $0.50, you just lost half of your position value. So it’s important to keep all of the risk and reward scenarios in mind.
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Of course, the goal is making money, but it’s obviously much easier to gain and lose more money in shorter periods of time with penny stocks than blue-chips. Given this case, here’s a list of stocks trading under $4 right now. But just because they appear “cheap” are they the best penny stocks to buy right now?
Penny Stocks To Buy Under $4: Tonix Pharmaceuticals Holding
We talked about Tonix Pharmaceuticals Holding (TNXP Stock Report) over the weekend. This came after TNXP had one of its most active days of the year. The only other day to outpace July 17th was earlier in the year in February. That’s when the penny stock saw a move to highs of $1.23 and traded more than 167 million shares. That was when the company announced a strategic collaboration with Southern Research to support the development of a vaccine, TNX-1800 to protect against COVID-19.
This month Tonix announced that it met its target enrollment of approximately 470 participants in a Phase 3 RELIEF trial of TNX-102 SL 5.6 mg. The treatment is in development as a non-opioid, centrally acting analgesic, taken daily at bedtime for the management of fibromyalgia. On the heels of that update, Tonix also announced a collaboration with Columbia University to study immune responses against COVID-19.
“This work may also guide the selection of appropriate individuals for COVID-19 vaccine trials, such as for Tonix’s TNX-1800, based on a live replicating vector platform, which is designed to confer durable T cell immunity. It is also possible that new COVID-19 vaccines can be designed which will be tailored to individuals by precision medicine,” said Seth Lederman, M.D., President and Chief Executive Officer of Tonix. Keep in mind that the penny stock closed the week last week around $0.80 and has already started turning higher during premarket trading on Monday. Will this trend continue or is a pullback in store?
Penny Stocks To Buy Under $4: Digital Ally Inc.
Digital Ally Inc. (DGLY Stock Report) has been one of the penny stocks to watch for a few months now. Initially, a speculative idea when riots started, DGLY stock has rallied after big corporate developments. States are beginning to put legislation in place, some of which include the use of body cams on a large scale. For a company like Digital Ally, that might be “kind of important”. For instance, the company’s body cams were spotted in a news story coming out of Kansas City. Specifically, this was a report citing Kansas City securing over $2 million for bodycams for its police.
But even before all of that, DGLY stock was trending amid COVID-related information. Back in April when we started following DGLY more closely, the company partnered with Trust Think Products, LLC, the exclusive distributor of the Danolyte® disinfectant. It was a bit of an odd move considering the company’s main business model. However, it was a move to diversify at a time where there was much more uncertainty for many businesses. Needless to say, the refocus on its imaging technology is in the spotlight more prominently this month.
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On Monday, the company announced another key update. Digital Ally revealed an order of 500 units of its non-contact temperature-screening instrument ThermoVu™ from Trust Think Products. The order is expected to be shipped in the third quarter 2020. Obviously this order comes in response to the ongoing pandemic and the recommendations put forth by the CDC and other health organization. The focus is on increasing COVID-19 safety efforts in schools, offices, and other public venues if and when things reopen for good. On Friday, DGLY stock closed the week at $3.39 and on Monday, shares have already started to climb during premarket trading.
Penny Stocks To Buy Under $4: Bionano Genomics Inc.
Bionano Genomics Inc. (BNGO Stock Report) was another one of the more active penny stocks on Friday. In fact, it saw its highest single-day trading volume this year. More than 160 million shares traded by the close of the week. BNGO stock tested its 200 Day Moving average for the first time since last October as well. But similar to back then, the 200DMA acted as a resistance level with shares failing to stay above it be the end of the day.
This week, BNGO stock continues to gain attention in the market. This comes after its latest update. Bionano announced on Monday that a European consortium published their first paper on the use of Bionano’s Saphyr genome imaging instrument to investigate the performance of Bionano data in comparison to cytogenetic standard of care in constitutional or inherited genetic disorders. The consortium is led by Laila El Khattabi from the Cochin Hospital in Paris, France and Alexander Hoischen from the Radboud University Medical Center in the Netherlands.
Bionano said that consistent with preliminary reports on this study, the authors reported 100% concordance between optical mapping results from the Saphyr genome imaging instrument and gold standard cytogenetic methods in a cohort of patients with a variety of constitutional or inherited genetic disorders.
Bionano’s Saphyr system is a platform for ultra-sensitive and ultra-specific structural variation detection. It enables researchers and clinicians to accelerate the search for new diagnostics and therapeutic targets. Will this latest update spark additional momentum heading into the new week?