Are These Cheap Penny Stocks On Your List Right Now?
Penny stocks are well-known for their volatility. Few other asset classes swing hundreds of percentage points in a single session like these cheap stocks. Furthermore, certain sectors have compounded this volatility due to their own inherent nature. Take, for instance, the biotech sector.
Companies usually deal with novel treatments or brand new devices that otherwise haven’t been commercialized. Many biotech industry companies are deeply rooted in the development of compounds to address unmet medical needs. This year, major benchmark ETFs like the Nasdaq Biotech ETF (NASDAQ: IBB) and the S&P Biotech ETF (NYSE: XBI) reached all-time highs early this year.
It was one of the better-performing sectors in the stock market over the last year as well. One of the obvious drivers of this was the coronavirus, namely vaccine stocks, testing stocks, and other biotech stocks with exposure to addressing the impact of COVID-19.
Robinhood Traders Flock To Biotech Penny Stocks
With this increase in volatility came attraction from day traders. One of the fastest-growing platforms in 2020 was Robinhood. It became so popular, in fact, that retail traders were relabelled “Robinhood traders” even if they had accounts at other brokerages. Now, the app’s appeal has changed in 2021, thanks to certain circumstances involving a few Reddit penny stocks and brokers. You may have heard about this when shares of GameStop began breaking out in January (See: Robinhood, Webull, Others Block Access To Penny Stocks Today).
Honestly, no matter how you feel about it, countless members on social media, including Reddit make plenty of posts showing positions held on the app. With this in mind, here’s a quick list of penny stocks to buy for under $3 on Robinhood & other platforms. Just because they’re “cheap,” will they be worth the risk?
- Zosano Pharma Corporation (NASDAQ: ZSAN)
- Rockwell Medical Inc. (NASDAQ: RMTI)
- Onconova Therapeutics Inc. (NASDAQ: ONTX)
Robinhood Penny Stocks To Buy [or avoid] #1: Zosano Pharma Corporation
Shares of Zosano Pharma have been on a tare in 2021. Since the start of the year, ZSAN stock has rallied from $0.55 to highs of $3.06 and currently trades around $1.33 as of Tuesday’s closing bell.
One of the main catalysts for this move was progress with the company’s Qtrypta™ New Drug Application. Specifically, the company requested a Type A meeting with the FDA in December and ultimately resubmitted plans following this meeting. According to Zosano, the FDA gave feedback sufficient to allow for this resubmission.
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Qtrypta™ is the company’s transdermal microneedle system with the potential to treat patients with debilitating migraines. Fast-forward to this week, and the company just reported strong earnings data in its Q4 and full-year 2020 results. Zosano’s loss per share was only 8 cents compared to an earnings per share loss of 46 cents the year prior.
“Our clear priority is to resubmit our NDA as soon as possible so that patients suffering from debilitating migraines have access to Qtrypta, if approved. Separately, last year we also executed feasibility study agreements with Mitsubishi Tanabe Pharma Corporation and two other partners to explore additional potential therapeutic applications of our transdermal microneedle system technology.”
Steven Lo, president and chief executive officer of Zosano
A few analyst upgrades have also come with all of this progress. Maxim Group maintains a Buy along with a price target of $2.50. H.C. Wainwright also has a Buy plus a $2.50 target.
#2: Rockwell Medical Inc.
Another one of the biotech penny stocks to watch is Rockwell Medical. That’s after the strong day it had on Tuesday. Shares opened at $1.36 and surged well into the aftermarket session to highs of $1.64. The company is focused on designing treatments for those with iron deficiency and anemia management. Its Triferic AVNU, and IV form of its Triferic platform, was approved by the FDA last March. Earlier this quarter, Rockwell announced that this would be available for patients in the US. Metro Medical™, a Cardinal Health company, is the exclusive distributor of the treatment.
“With Triferic AVNU, more patients will have access to the benefits of Triferic as providers will have added flexibility to administer the IV formulation to their patients who may benefit from physiologic iron maintenance therapy to manage their anemia.”
Russell Ellison, M.D., M.Sc ., President and Chief Executive Officer of Rockwell Medical
This month the company presented at the H.C. Wainwright Life Sciences Conference. Aside from that, there haven’t been many new updates. We can see that its partner in South Korea, Jeil Pharmaceutical Co., Ltd., filed New Drug Applications with the Ministry of Food and Drug Safety of the Republic of Korea for Triferic AVNU & Triferic Dialysate last month. The outcome of this is up in the air.
#3: Onconova Therapeutics Inc.
Another one of the aftermarket movers on Tuesday was Onconova Therapeutics. The company didn’t report news or filings to correlate with the move. However, during the aftermarket session, ONTX stock jumped from $1.07 to highs of $1.25. So what do we know that we can actually point to?
If you remember from earlier this month when we discussed ONTX, the company was set to present at several industry conferences this month. These included H.C. Wainwright’s Conference from the 9th-10th, Roth’s Conference from the 15th-17th, and Maxim’s Growth Conference from the 17th-18th. This week is the thick of this series of conference appearances. So it could be something to keep in mind if ONTX is on your list of penny stocks right now.
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What’s more, Onconova’s ON 123300 is planned to begin a dose-escalation and expansion Phase 1 trial in the U.S. in the first half of this year. What’s more, a dose-escalation and expansion Phase 1 trial is currently underway in China. Its product candidate oral rigosertib is in a dose-escalation and expansion Phase 1 investigator-initiated study. This is targeting patients with KRAS+ lung adenocarcinoma in combination with nivolumab. Also, Onconova has begun preclinical work investigating rigosertib in COVID-19.
Biotech Penny Stocks Can Be Volatile
One thing to keep in mind is that penny stocks + biotech can equal a very volatile situation. If you’ve followed these types of stocks before, you know what I mean. This year alone, we’ve seen countless biotechs break out hundreds of percentage points while others broke down dramatically as well. One small miss or one glimmer of hope can trigger associated momentum in specific stocks. Furthermore, as we’ve seen with some of these, even without news, speculation can play a big role as far as “what could come next.” So if you have biotech penny stocks on your watch list right now, make sure to keep this in the back of your head when weighing risk and reward.
2 comments
ONTX was also given a price target of 7.5 by HC wainwright
Hope to see you review some biotech stocks for under a dollar.