Looking For Cheap Penny Stocks? How Do These Stack up?
Penny stocks come in all shapes and sizes. Whether you’re simply looking for stocks under $5 or maybe you’re more specific to penny stocks under 10 cents, there’s something for everyone. In fact, there are even stocks under $0.01 to buy in the stock market. However, it’s important to understand that the lower the price, the higher the volatility.
The reason behind that is simple: lower prices equal less price movement for realizing significant percentage changes. Case in point, let’s say you’ve got some stocks under $5 that trade around $4.75. If the price moves 4 cents, you’re talking a very nominal change in percentage value, right?
Well, when it comes to stocks under $0.10, that 4 cent moves is now a change of 40% or more. So you really need to weigh your risk and reward before jumping right into a trade. analyze the market, research potential catalysts, and see what the average volume looks like. Everyone likes to make money quickly, especially when you’re talking about stocks under 10 cents. But with that low price, comes even higher volatility. If you aren’t one for handling big changes in portfolio value, you might want to consider some higher-priced penny stocks.
Another factor that can play a role with cheap penny stocks is the exchanges they trade on. The NASDAQ and NYSE, for instance, have penny stocks that more institutions can trade. Many are restricted from buying OTC penny stocks, for example. Similarly, there are also penny stock brokerages that restrict access to certain exchanges; namely the OTC.
So you’re going to run into the high probability of inconsistent liquidity. This isn’t to say all penny stocks on the OTC are bad. But it does suggest that research is key in spotting the best setups. With this in mind, let’s take a look at a few penny stocks under 55 cents that finished last week strong. Will that continue into the week ahead?
Top Penny Stocks Under $0.55: Avinger Inc.
We’ve been covering Avinger Inc. (AVGR Stock Report) for most of August. Shares have jumped from around $0.47 to highs of $0.7685. While this was a strong move, the last few weeks saw AVGR stock reset, essentially. By last Friday afternoon, the penny stock closed at $0.51. What was behind the huge drop? It initially started after an announcement that Avinger priced a $5.2 million offering at $0.47 per share. This came just as the stock saw those $0.70+ highs. But, last week, the company announced that the offering was officially closed, which sparked a bit of optimism in the market.
Even with that being the case, shares traded relatively sideways for the remainder of the week. Whenever companies raise money, it’s worth it to see what the use of proceeds are. In this case, Avinger said net proceeds will be used for working capital and general corporate purposes.
This would include R&D of preclinical and clinical trials and studies. This could be an important factor considering that in May Avinger submitted a 510(k) application for U.S. pre-marketing clearance. This was for its Ocelaris image-guided CTO crossing catheter. Completion of the company’s INSIGHT IDE study “remains a priority” according to management and clinical trials obviously take money to conduct.
CEO, Jeff Soinski said on the earnings call that, “We’re excited about the potential for Ocellaris to drive growth of our image-guided CTO crossing business and continue to anticipate U.S. premarketing clearance for this advanced device in the second half of this year.”
So will this play a role heading into September?
Top Penny Stocks Under $0.55: Aeterna Zentaris Inc.
It isn’t the cheapest one on this list of penny stocks but it did close below $0.50 on Friday. Aeterna Zentaris Inc. (AEZS Stock Report) has traded relatively sideways for most of the third quarter so far. After dropping at the end of June, the consolidation pulled AEZS stock to lows of $0.3697 at the start of July.
What was the culprit? Something similar to AVGR, Aeterna announced a discounted offering. The company priced a $12 million raise at $0.45. Just prior to this being revealed, AEZS stock was trading around $0.80. So you could imagine the market reaction at the time. You can also clearly see the response on the penny stock’s chart below.
Since then, as I said this has been more of a channel trade during the 3rd quarter. The AEZS stock price has fluctuated between $0.40 and $0.57. While 17 cents might not seem like a lot, in light of the low price, that’s a swing of over 40%. Aside from reporting lackluster earnings at the beginning of August, there haven’t been many headlines to speak of.
However, in its business update, following earnings, the company revealed some important dates to keep in mind for the upcoming month. The most near-term is that its abstract on study results of Aeterna’s first pediatric study on macimorelin has been selected for presentation at the 22nd European Congress of Endocrinology being held September 5-9, 2020. Mavimorelin is designed to diagnose childhood-onset growth hormone deficiency. Considering that’s this week, will that put AEZS stock on the watch list again for September?
Top Penny Stocks Under $0.55: Titan Pharmaceuticals Inc.
Titan Pharmaceuticals Inc. (TTNP Stock Report) is another one of the penny stocks that’ve been relatively flat this year. There were a few sporadic breakouts here and there. But if you look at TTNP stock from the beginning of the year to now, shares have barely moved. Most recently, the penny stock was trading around $0.30 but ended up cascading lower over the last few weeks. Unlike the other two companies, Titan didn’t report a discounted offering. However, it did come out with some rough earnings results.
“Following a substantial decline in the number of patient enrollments for Probuphine treatment during the first two months of the quarter, clinics in certain regions began to see an increase in enrollments in June, which has continued. We believe this is an early indication that the efforts of our commercial team are working and we look forward to continued progress in the coming months.”Titan’s President and CEO, Sunil Bhonsle
Probuphine is indicated for the maintenance treatment of opioid dependence. But why could TTNP stock be on the radar this week? Well, sifting through the filings, you will come across and 8-K dated August 20th. The 8-K showed that August 31st will be the date when Titan scheduled a special meeting of stockholders. It’s for the sole purpose of seeking approval of a proposal to amend Titan’s certificate of incorporation increasing the number of authorized shares of common stock. The reason is to enable Titan to raise capital for sales and marketing of Probuphine® implant and product development efforts, as well as to regain compliance with Nasdaq’s minimum stockholders’ equity requirement.
Top Penny Stocks Under $0.55: Castor Maritime Inc.
Castor Maritime Inc. (CTRM Stock Report) saw a heavy volume day on Friday. The penny stock traded more than 17.8 million shares. This was the 3rd consecutive day that CTRM stock traded more than 14.9 million shares. On average, the penny stock was trading less than 10 million shares over the last few weeks. If you look at the stock chart, you’ll see that CTRM has also been steadily climbing back from its 52-week low of $0.14.
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The stock has been under pressure this quarter following late-June reports that Castor conducted an upsized, multi-million dollar offering at $0.35 per share. The company also announced an additional offering for $17.3 million in July. Obviously, large dilution risk becomes a factor in cases such as these. But at the end of the day, companies go public to raise money.
In light of these raises, Castor has also moved forward with a few vessel acquisitions too. The company acquired a 2007 Chinese-built Panamax dry bulk carrier for $7.9 million. The company took delivery of the vessel earlier this month through one of its subsidiaries. It also inked a deal for a 2010 Japan-built Panamax dry bulk carrier for about $12.8 million. Considering the attention the oil and gas industry is receiving right now, could the latest volume trend have resulted from continued speculation on the future of sector stocks?