Are These 10 Penny Stocks On Robinhood Worth The Risk?
The stock market has been trading near all-time highs all month. Despite the recent dip, it doesn’t negate that rampant buying from retail traders has pushed penny stocks and blue-chip stocks higher in 2021. With that, we’ve seen an interesting situation. It has to do with penny stocks on Robinhood, in particular. Since the mobile app doesn’t allow access to things like OTC penny stocks (with some exceptions), users are limited to NYSE and Nasdaq-listed names.
This is relatively well-known, so what’s the problem? The main issue arises when these Robinhood traders search for penny stocks under $1 to buy on the app. Since there have been so many massive breakouts, there’s a shortage of cheap stocks to buy, yes, really. If you search for Nasdaq & NYSE-listed names that are trading below $1, you’ll likely return a list of less than 15 right now. What’s more, when you look at the 100 most popular stocks on Robinhood right now, only 1 of them still trades below $1. So what should traders do?
One solution is to find another broker. This can be as easy as opening up an account with Schwab, TD Ameritrade, Interactive Brokers, or Etrade. Even penny stocks on Fidelity aren’t limited to listed names only. But if you insist on only buying penny stocks on Robinhood, here’s a quick list of names still trading for less than an item on the McDonald’s Dollar Menu:
Top 10 Penny Stocks Under $1 On Robinhood
- Northern Dynasty Minerals Ltd. (NYSE: NAK)
- China SXT Pharmaceuticals Inc. (NASDAQ: SXTC)
- Acasti Pharma Inc. (NASDAQ: ACST)
- Gran Tierra Energy Inc. (NYSE: GTE)
- Synthetic Biologics Inc. (NYSE: SYN)
- Gold Standard Ventures Corp. (NYSE: GSV)
- Tanzanian Gold Corporation (NYSE: TRX)
- Great Panther Mining Limited (NYSE: GPL)
- Palatin Technologies Inc. (NYSE: PTN)
- Golden Minerals Company (NYSE: AUMN)
Rounding out the list of penny stocks to buy under $1 on Robinhood this week is Almaden Minerals (NYSE: AAU) and Genesis Healthcare Inc. (NYSE: GEN). Aside from these names, the rest of the NYSE and Nasdaq listed names are trading above the $1 mark right now. Will that be the case next week? We’ll have to see, but from this list, you also can observe that many of these penny stocks are within striking distance of the one dollar mark.
Remember that when it comes to cheaper stocks, volatility can play a larger role. Aside from general market conditions, the price alone can become an influence on your position’s value. Where a stock like Apple needs to move at least a few dollars to see a meaningful change in value, penny stocks under $1 only need to shift a few pennies to do the same. With this in mind, it’s up to you to decide if cheaper stocks are worth the risk. Here’s a breakdown of the top 3 most active names on the list. Are their current trends a bullish or bearish sign?
Penny Stocks To Buy For Under $1: Northern Dynasty Minerals Ltd.
The most active name on this list of penny stocks today is Northern Dynasty. Unless you’ve just begun trading, you’re likely well-aware of what’s been going on with the company. If you’re not, let me quickly catch you up to speed. Northern Dynasty has been working to get its Pebble Project up and running. In order to do this, it needed certain approvals from the state of Alaska as well as the U.S. Army Corps of Engineers. Outside the fact that there were some questionable dealings going on with previous management, the USACE said that the proposed mine would case “significant degradation” to a local watershed.
Fast-forward to this month and Northern Dynasty has continued its pursuit in an appeal. The company said that the findings are inconsistent with the law and Clean Water Act regulations. Furthermore, Northern’s Request for Appeal also cites the decision was unsupported by the administrative record, including the Final Environmental Impact Statement for the Pebble Project. The company also explained that this move would be detrimental to the future of resource development in Alaska.
Considering that this request for appeal was made on January 19th, and the USACE has 30 days to notify whether the RFA is complete, right now could be an interesting time to watch NAK.
China SXT Pharmaceuticals Inc.
We touched on China SXT earlier this week. The Chinese medicine company has experienced a strong move in 2021 so far. However, as you’ll see on its chart, SXTC dropped hard on Friday. Though it didn’t erase all of its gains for the year, it did pull-back roughly 30% from Monday’s opening bell.
Why did SXTC stock drop? The company announced a 1 for 4 reverse stock split on Friday. This means that the company’s shares will end up trading 4 times higher than the current share price later this month on an adjusted basis. While this cuts the outstanding share count significantly, it won’t touch the authorized share count, which remains unlimited. Will this pose a risk for investors?
Acasti Pharma Inc.
Shares of ACST stock have pulled back for the better part of the last few weeks. Friday shares rebounded strongly without any aparant headlines to go with it. Needless to say, just because it’s under $1 and has been pulling back, doesn’t mean it had a bad year so far. In fact, since the start of 2021, ACST is still up over 170% so far.
The story behind Acasti is one of a potential turnaround story. After reporting Phase 3 data of its CaPre hypertriglyceridemia treatment last year, Acasti began searching for strategic alternatives. The company also engaged Oppenheimer & Co. Inc. to do so. Over the last few months, the company has been raising money to gain additional flexibility in its ongoing review process.
As far as this process goes, the company is exploring potential mergers, acquisitions, or other initiatives. These could involve the company and/or its current pipeline, including CaPre. No further details have been made but based on the company’s latest round of earnings, and it appears Acasti has focused on streamlining operations in light of this strategy process. EPS came in higher, year-over-year, along with lower R&D expenses for the quarter.
Penny Stocks Under $1
Profit is profit no matter how you slice it. If you’ve got a stock trading around $0.50 that moves only 2 cents, it isn’t any better or worse than the $5 stock that moves 20 cents. My point is, as a trader or investor, the goal is to make money, and you measure that in percentages. Just because a stock trades under $1, that doesn’t guarantee you will capture any more gains than higher-priced stocks. Being able to identify set-ups and find trends is more important. Though, you can’t argue when one of these cheap stocks rips higher. Just remember that lower-priced stocks can be volatile at the end of the day, so make sure you factor that into your trading strategy.