Are Penny Stocks Under $1 Worth The Risk?
Penny stocks are well known for their high volatility and risk that comes with it. But does that mean you should avoid them entirely? Not necessarily as long as you know how to handle the risk factor.
What Are Penny Stocks?
The definition of penny stocks states that these are shares of companies that can be bought for less than $5.
But as I’m sure you’ve come to find, there are plenty of these cheap stocks that actually trade for “pennies” a share. Let’s take our title: Trading Penny Stocks? 3 You Can Buy Under $1 On Robinhood Right Now. Why point out Robinhood in the first place? The trouble with finding stocks under $1 on the app and other apps like Webull is that most of the stocks offered are on listed exchanges. This means that users are limited to buying penny stocks trading on the NYSE and Nasdaq.
Since most of these exchanges require companies to maintain a minimum price of $1, your choices are slim. However, this doesn’t mean you’re completely out of luck. Whenever these penny stocks under $1 stay below that mark for too long, the exchanges will send a warning. Then it’s up to the companies to do what they must to regain compliance. In many cases, this can become a catalyst on its own, and we’ve seen plenty of penny stocks on Robinhood under $1 surge to regain good favor with the NYSE and Nasdaq.
Penny Stocks On Robinhood Under $1
Here’s where the rubber meets the road. Are you looking to trade these stocks in April? If you can handle the risks involved and said “Yes,” then we’ve got a quick list of penny stocks to watch right now. All of these can be bought for less than a Dollar Menu Shake.
- Castor Maritime (NASDAQ: CTRM)
- Biolase Inc. (NASDAQ: BIOL)
- Acasti Pharma Inc. (NASDAQ: ACST)
- Onconova Therapeutics Inc. (NASDAQ: ONTX)
- Assertio Holdings Inc. (NASDAQ: ASRT)
Robinhood Penny Stocks To Buy [or avoid]
Remember, just because they’re “cheap,” will they be the best penny stocks to buy right now? I’ll leave that up to you. Let’s have a closer look and check under the hood.
#1: Castor Maritime (NASDAQ: CTRM)
Castor is a shipping company we’ve discussed plenty of times in the past. It focuses on bulk shipping and has been tightly connected with oil and gas. It’s also one of the most heavily traded stocks in the entire stock market today by total share volume.
This month the company launched a $125 million offering at a price per share of $0.65. Obviously, based on today’s prices, this is at a premium. However, when the news was announced, it triggered a slide in CTRM stock and sparked fears of dilution in the market. When you’re talking about hundreds of millions of extra shares being registered, the larger the float becomes and the slower stocks tend to move. However, there’s a positive side to fundraising, which is obviously additional capital to put to use.
Considering the recent trend with Castor’s business, there could be much more to consider after the financing closed. I say this because the company has been actively acquiring new ships to add to its fleet. Just last month, Castor announced the acquisition of a new vessel and the official delivery of another: M/T Wonder Polaris.
“We are pleased to announce our eighth vessel acquisition in 2021 with the addition of another Kamsarmax dry bulk vessel, our fifth, to Castor’s fleet. Upon completion of all our recently announced acquisitions, our fleet will consist of fourteen vessels.”
Following the official closing of this latest financing round, CTRM could be one of the penny stocks to watch in April.
#2: Biolase Inc. (NASDAQ: BIOL)
Another one of the cheap penny stocks to watch this month is Biolase. The company has been one we’ve followed throughout the duration of the pandemic and into 2021. It specializes in dental laser devices. Thanks to the global lockdowns last year, the company faced a bit of adversity. However, late last year, Biolase saw a return of procedures to 70% of their pre-covid levels.
As a medical device company, relationship management is key. Signing on with medical organizations and dental clubs can present big opportunities for companies like Biolase. To this end, it’s important to note that the company recently inked a collaboration deal with Einstein Healthcare network’s residency in endodontics, training residents to use its Waterlase dental lasers. The company also has other deals in place with the likes of DSO Dental Care Alliance to expand laser adoption in dental offices across the U.S.
This could help add a bit more heft to the company’s current growth path. At the end of 2020, Biolase reported sequential revenue growth of more than 30%, with 78% of sales coming from new users in the fourth quarter.
On the heels of this momentum, analysts have also given their vote of confidence. Maxim Group along with analysts from Colliers Securities are bullish on BIOL. Both have Buy ratings and price targets ranging from $1.15 to $2.
#3: Acasti Pharma Inc. (NASDAQ: ACST)
Acasti Pharma is another one of the penny stocks trading below $1 right now. It has been for quite some time as well. This hasn’t negated the fact that year-to-date, ACST stock is up considerably higher. On January 4th, the penny stock began the year at $0.3389. Thursday’s high of $0.59 puts this YTD move at more than 70%.
One of the interesting parts about Acasti is that it’s a company searching for a home right now. Some bad trial results on its CaPre treatment for hypertriglyceridemia last year sent the penny stock diving lower. However, it ended up engaging Oppenheimer to find strategic alternatives, including the sale of some of its IP. Not much has been said since then.
However, the company has been able to secure some funding. The goal is to beef up its balance sheet and provide additional flexibility in its ongoing review process. Needless to say, it has created a lot of speculation among traders. What will the outcome of this strategic review process be? Will Acasti come out on top and in a better position? These are just a few questions being asked right now.
#4: Onconova Therapeutics Inc. (NASDAQ: ONTX)
The theme of this article so far has been biotech penny stocks to buy under $1 from the look of it. Onconova continues this trend. The accompany is in clinical stages for its treatment candidates and focuses on cancer in particular. ON 123300 is the main point of focus for the company right now. It’s being studied in patients with advanced solid tumors who have failed on prior therapies. An expansion cohort of breast and lung cancer patients will be enrolled at the recommended Phase II dose.
This month the company announced that its partner in China, HanX Biopharmaceuticals, has enrolled 3 patients in the second dosing cohort of a Phase 1 study with ON 123300 in HR+ HER2- metastatic breast cancer and other advanced relapsed/refractory cancers in China. A total of 6 patients have been enrolled, to date, in 2 cohorts.
The beauty of this is the company also revealed that it’s preparing to start a U.S. study this quarter. The trial will assess the safety, tolerability, and pharmacokinetics of ON 123300 administered orally as monotherapy at increasing doses for a continuous 28-day cycle. So as the market looks for further details on the U.S. trial, ONTX could certainly be one of the penny stocks to watch.
#5: Assertio Holdings Inc. (NASDAQ: ASRT)
Finally, Assertio has mirrored a similar trend as Onconova this year in that shares jumped early on, dropped during March, but remain positive, year-to-date. Since January 4, ASRT stock is still up roughly 60%, and April 8th saw a nice surge in the stock market. The penny stock rallied 7% during the session without any apparent catalyst. In fact, the last news that came from the company was back in March when it released its Q4 and full 2020 results.
President and CEO Dan Peisert said, “As we close the chapter on 2020, we reflect on several strategic shifts, including a move toward digital marketing, enhanced patient services, an increasing shift to our hub model, and a leaner operational profile with increased cash.”
In general, the company has been actively raising capital to sustain operations during the pandemic. It has also requested its shareholders to increase the amount of authorized stock with the likely hope of further fundraising efforts. The commercial pharmaceutical company has built a portfolio of branded prescription medications targeting patients with neurological, inflammatory, and pain issues growing through acquisitions, licensing, and mergers.
With the world beginning to reopen, it will be interesting to see if Assertio can start turning things around.