These Stocks Under $1 Might Be Inexpensive But Are These Cheap?
We talk about penny stocks a lot on this site. Obviously, the name justifies that. But I also think that it’s important to note that we write these articles as a means to make you think. It’s not just a random list of penny stocks with a copy and paste “about” section for each stock. We take time to look into what’s trending and why. As they say, knowing is half the battle and we do our best to give quick bites of info for you to use in your research process.
Why mention this? One of the questions that constantly comes up deals with the price of penny stocks. Typically speaking, some traders simply buy certain stocks “because they’re cheap.” But as we’ve all come to know, the price of penny stocks doesn’t dictate the value. Sometimes the “cheapest” stocks can end up costing you a lot. Herein lies the reason for doing more research before jumping in.
General mathematics tells us that the lower the price, the smaller the movements need to be in order to realize large gains. What I mean by that is for stocks under $5 – say a $4.50 stock – a move of $0.45 would equate to a 10% shift in price. Now, that same $0.45 move for stocks under $1 equates to a far larger percentage change. I’m also not talking about “gains” as I’m sure you’ve noticed.
I’m talking specifically about percentage change. In light of that, you need to consider the higher likelihood of more volatility with lower-priced stocks. With this in mind, let’s take a look at a few that can be bought for under $1 right now. Will they be on your list of penny stocks to buy or avoid next week?
Penny Stocks To Buy Under $1 [or avoid]: Color Star Technology Co. Ltd.
Color Star Technology Co. Ltd. (HHT Stock Report) had a great run during the early part of Q3. we followed along as shares ramped up from around $1 to highs of $2.06 within the matter of a few weeks. The company offers online and offline education services. Last week, Color Star announced a Framework Agreement with Moremoon Cartoon Cultural Diffusion (Shenzhen) Co., Ltd. Among several initiatives, the company looks to offer multiple varieties of products on its “Color World” Platform.
Virtual learning/entertainment stocks have grown in interest among investors this year. Considering that schools aren’t likely to go back to full, in-person classes to start, speculation has triggered big momentum. However, it hasn’t been as persistent as some of the other stock market trends have been this year. In light of that, it’s no surprise that HHT stock slid. What might be a surprise to many is how far that slide took the penny stock. This week HHT reached a low of $0.57, its lowest price since June. Contributing to the slide was a $4.2 million financing that was announced around July 20.
So why is HHT back on a list of penny stocks? This week the company announced a long-term strategic agreement with Thailand’s ” Sing Sian Yer Pao Daily News”. In the future, the two parties will leverage each other’s strengths to develop in-depth cooperation on cultural education, brand promotion, and online star education. The company’s also been working on a mobile app to connect fans and entertainers. There will be a press conference on this next month.
Penny Stocks To Buy Under $1 [or avoid]: Abraxas Petroleum Corp.
Abraxas Petroleum Corp. (AXAS Stock Report) has been beaten down for months. There were a few days, here and there, that AXAS stock jumped big. Look at the chart, however, and I think the general trend is clear. Earlier this week Abraxas said after the close on Monday it renewed its strategic alternatives review that was announced last October led by Petrie Partners.
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“Now that we have successfully amended our agreements with Angelo Gordon and our banks, we look forward to working with Petrie to examine ways to optimize value,” CEO Bob Watson said. “Our strong, concentrated asset bases in the Delaware and Williston Basins, as well as our excellent hedge book, position Abraxas for success on a standalone basis and also make us an attractive transaction partner.”
While that acted as a catalyst earlier in the week, it went back to business as usual by Friday. That is, until a filing was submitted showing something “interesting” that traders seemed to have gotten behind. AG Energy Funding, LLC and its related reporting persons hold a stake in the company. Since this development came after the closing bell, we’ll have to see how the market responds next week. Based on this latest update, however, are you rating this one of the penny stocks to buy or avoid next week? Comment below.
Penny Stocks To Buy Under $1 [or avoid]: Ra Medical Systems Inc.
Similar to AXAS, Ra Medical Systems Inc. (RMED Stock Report) hasn’t been a top performer for most of the year either. However, at the start of August, RMED stock began catching some attention. On July 31, the penny stock dropped to new 52-week lows of $0.276. Since then, it has been on a slow, yet steady climb back. RMED briefly test the $0.40 level on the 11th but again pulled back following an earnings miss.
Regardless of that, I think there may have been a few takeaways from the business update given alongside earnings results. First, Will McGuire, Ra Medical Systems CEO, said, “I’m encouraged by our progress during the second quarter and recent weeks, particularly with our engineering efforts on the various DABRA catheter initiatives. We have added substantial engineering resources this year through hiring skilled personnel and engaging experienced consultants. I am confident we have the right team in place to achieve our engineering milestones.”
Next, something that the company has worked on this year is advancing its atherectomy indication trial and engineering efforts. Ra Medical commercializes excimer lasers as tools for the treatment of vascular and dermatological diseases. On its earnings call, McGuire also said he expects to complete the necessary engineering work on its catheter in the first half of 2021. He also said Ra would subsequently pursue FDA clearance for this improved catheter. With this potential milestone still months away and in light of recent momentum, will RMED be on the list of penny stocks to buy now or avoid?