3 Penny Stocks To Buy Under $3; Are They Worth The Risk?
When it comes to penny stocks, does price matter? Of course, if you’re looking at these types of stocks, it does matter somewhat. But once you find yourself in this wonderful world of stocks under $5, what’s next? Instead of looking at certain sector trends like electric vehicle stocks, for example, some traders will continue looking at the price.
For this reason, we see plenty of searches for penny stocks below certain price points. Obviously, the lower the price, the less the price needs to move in order to return big gains. Stocks under 10 cents only need to move a penny to return 10% or more, for example.
Herein also lies the risk-side of the coin. Just a big as these gains can be on small price action, so too can the losses. So if you’re trading cheap stocks like these, keep this simple item in mind. Penny stocks carry plenty of fundamental risks as it is.
Penny Stocks To Buy Based On Market Trends
Aside from looking at a grouping of penny stocks under $3 for example, it’s also important to monitor trends. There’s an old saying that goes, “A rising tide lifts all ships.” We saw an example of this in November with electric vehicle stocks. Even if a penny stock already has momentum, the rising EV tide helped compound that further. So when you’re looking for penny stocks to buy, market trends can play a role.
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While some profit-taking may be part of the equation to start the week, vaccine hopes have buoyed most of the negative sentiment in the stock market, in general. Positive data from Moderna (MRNA Stock Report) and Pfizer (PFE Stock Report) helped boost the outlook heading into 2021.
“Following encouraging early vaccine efficacy data, we remain confident that vaccines will be widely available by the second quarter of 2021,” UBS said in a report for clients titled “A Year of Renewal.”
With this in mind, it’s key to watch for niche trends as we saw with EV. What will become the next sector that traders look at? Right now it would seem that healthcare and tech stocks are in focus. But does that mean these are the best penny stocks to buy right now?
Penny Stocks To Buy For Under $3: Tonix Pharmaceuticals Holding Corp.
Tonix Pharmaceuticals Holdings Corp. (TNXP Stock Report) is right in the middle of the COVID-19 vaccine discussion this month. A few weeks ago, the company announced preliminary results following vaccination of non-human primates with TNX-1800. This is a live attenuated COVID-19 vaccine candidate engineered to express the SARS-CoV-2 spike protein after vaccination.
This research is part of an ongoing collaboration between Southern Research Institute, the University of Alberta and Tonix. In the second phase of the study, TNX-1800 vaccinated and control animals will be challenged with CoV-2 with results expected in the first quarter of 2021.
While the stock has been in a sideways pattern for the last month or so, TNXP has been climbing during the past 2 sessions. Since last Wednesday, shares have climbed from lows of $0.542 to highs of $0.625 so far this week. Again, when referencing stocks under $5 – in this case stocks under $1 – even this 8 cent move is worth about 15% so far.
Penny Stocks To Buy For Under $3: Adial Pharmaceuticals Inc.
Another one of the biotech penny stocks under $3 trending this week is Adial Pharmaceuticals Inc. (ADIL Stock Report). Shares have now extended higher for a 6th consecutive day on Monday. Since the 20th, ADIL stock has climbed from $1.70 to highs of $2.30 so far this week. That small, 60 cent move actually equated to a jump of 35% so far.
Last week the company entered into a stock purchase agreement with Keystone Capital Partners to support strategic opportunities of the company. As we saw earlier today with companies like Sunesis, which took some time but ultimately found a strategic alternative via its recent merger agreement. While there’s still an outcome yet to be seen for Adil, it isn’t unusual to find companies in search of alternatives raising money to do so.
Fred Zaino, Managing Partner and Chief Investment Officer of Keystone said, “After evaluating Adial, its clinical pipeline, and its management team, and after thorough due diligence, we believe Adial represents a promising investment opportunity.”
While the company had $7 million in cash on hand at the end of its most recent quarter, the agreement gives Adial access to up to $15 million via stock sales to Keystone. Aside from this, Adial’s lead drug candidate, AD04 continues to progress in its ONWARD Phase 3 trial. AD04 is a therapeutic agent targeting the treatment of Alcohol Use Disorder in certain patients. Adial has said that the enrollment rate has increased for four consecutive months and the Trial is projected to be fully enrolled during Q2 2021.
Penny Stocks To Buy Under $3: Jaguar Health Inc.
When you talk about penny stocks under $1, Jaguar Health Inc. (JAGX Stock Report) continues to be part of the discussion. Most of November has seen the penny stock trade in a range between $0.18 and $0.22. Again, it’s only 4 cents but it’s worth a swing of over 20% in either direction. This has caught the attention of day traders, naturally.
Last week, the company and its wholly owned subsidiary, Napo Pharmaceuticals announced plans to study an potentially commercialize the crofelemer treatment. This is a proprietary drug for an indication of inflammatory diarrhea. Specifically, Jaguar’s focusing the emergence of the “long-hauler COVID-19-recovery patients.”
This week, Jaguar announced further details to the plan. Specifically, “the company is engaged in preliminary discussions with Swiss Growth Forum, a sponsor of a European special purpose acquisition company.” As SPACs continue gaining interest, a potential merger with an operational subsidiary of Jaguar would be to be established in Europe with an exclusive license to crofelemer and Mytesi®. These would be for the originally discussed indications of inflammatory diarrhea and HIV-related diarrhea.
WIth JAGX stock now testing its 50-day moving average it will be interesting to see if momentum can carry it through this potential resistance point. Since August, this technical level has remained the upper level of resistance for JAGX stock. Keep that in mind if it’s on your list of penny stocks right now.