Are Penny Stocks Under $3 Worth Investing In?

Making money with penny stocks can be easy if you have the right tools at your disposal. A penny stock by definition is any stock under $5. Today, let’s focus on a few penny stocks that are trading under the $3 mark. Companies in this range tend to be more volatile than those that are over $5. This volatility is what attracts many to these cheap stocks.

The volatility of penny stocks can be good or bad. On one side, there is a higher chance for potential profit when investing in these assets. On the other side, investing in stocks in this price range can also result in significant losses. This is why it is important to craft an investment strategy that is in line at your goals and skill set.

The risk that comes with penny stocks is not for everyone. If you are not a fan of high volatility, certain companies may be better suited to your penny stock watchlist. The best way to identify this is by looking at price action in the short and long term. If you are okay with the risk associated with these assets, then stocks under $3 may be worthwhile.

Low-cost securities can be more risky when compared to higher-priced ones. So when investing in penny stocks it is important to look closely at the company you plan on investing in. This includes looking at its recent filings, notable events, financial reports, and other related information. Considering this info, let’s have a look at three penny stocks under $3 that are performing well right now.

Penny Stocks To Watch Before May

  1. Ashford Hospitality Trust Inc. (NYSE: AHT)
  2. Torchlight Energy Resources Inc. (NASDAQ: TRCH)
  3. Color Star Technology Co. Ltd. (NASDAQ: CSCW)

Ashford Hospitality Trust Inc.

Ashford Hospitality Trust is a real estate investment trust (REIT) that has a focus on upscale full-service hotels. It offers the Ashford App for consumers in the hospitality REIT investor community to connect with one another. The world is seeing a huge resurgence in real estate as reopening continues to stay strong. In January, home prices experienced one of the largest recorded increases in annual gain ever at 11.2%.

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The Dow Jones Equity All REIT Total Return Index reached a new 52-week high in the last month and a half. In this asset’s history, new 52-week highs have resulted in more gains throughout the year 90% of the time. Ashford is seeing momentum from the U.S. housing market as well, which is near a 15 year high at the moment. In the three months ending April 6th, REITs saw an overall increase of 9%. This means that real-estate investment trusts outperformed the S&P 500’s 5% gain in the same period.

Some of the biggest contributors to this increase include lodging owners and mall owners increasing in shares by 18% and 32% respectively. All of this real estate hype has seemingly lent momentum to Ashford. From April 23rd’s low to April 28th, AHT stock has increased by 34.97%. Ashford plans to release its first-quarter earnings release on Wednesday, May 5th which could provide some insight for investors.


Torchlight Energy Resources Inc.

Torchlight Energy Resources is a penny stock that we’ve been covering for months now. In that time, it has gone from well over $1 to over $2 per share. If you have not yet heard of the company, it is an oil and gas exploration company working in the Permian Basin. Its operations in this area include West and Central Texas which are both highly oil rich areas.

Torchlight has a couple of things in its pipeline at the moment. Last month the company updated investors on the proposed business combination with Metamaterial Inc. This merger of sorts is a way for Metamaterial to list on a large U.S. exchange, without having to go through the hassle of an IPO.

While the timeline has been pushed back many times at this point, investors are hoping for the deal to be completed in the coming months. Right now it is continuing to work towards the regulatory requirements necessary to complete the business combination.

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Oil prices inherently affect TRCH stock as it’s the primary asset of the company. On April 28th, oil prices increased by 2% after U.S. distillate inventories reported a large drawdown and an increase in refining activity. This has amplified hope that fuel demand may rise. Last week U.S. crude oil inventory went up by 90,000 barrels to 493.1 million. 

This was against analyst expectations of a 659,000 barrel upsurge. Goldman Sachs has estimated that the biggest jump in oil demand ever will happen in the next six months as vaccination numbers skyrocket. Amid this oil news, TRCH shares are up on April 28th.


Color Star Technology Co. Ltd.

Color Star Technology has had a great 6 months, and a lot of its success has occurred simultaneously with cryptocurrency and blockchain. The triumph of crypto over the last few years is undeniable. In 2021 the hype surrounding assets like Bitcoin and DogeCoin has caused a large jump in value for many notable coins. 

Amid all of this notoriety, non-fungible tokens or NFTs have also come on to the scene. NFTs are a way to offer digital ownership of a file that is connected directly to the blockchain. This can be used for everything from art ownership to concert tickets and more. In the last few months, we’ve seen NFTs sell for tens of millions of dollars, further bringing it into the public eye.

Color Star announced back in March that it would be developing a non-fungible token business. It plans to produce, release, and promote these assets through its wholly-owned subsidiary, Color China Entertainment Co., Ltd. The tokens could be used with its copyrights to concerts, artist videos, music, and much more.

On April 13th Color Star signed a cooperation agreement with Supre NFT to collaborate on future non-fungible tokens. Supre NFT is the owner of SuperTop, an integrated super-platform that allows for trading, auctions, and other blockchain-related features. 

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Its most recent update was its presentation at the H.C. Wainwright Cryptocurrency, Blockchain, & FinTech Conference. The CEO of Color Star, Mr. Luke Lu stated, “This event provided Color Star with a platform where we shared our Company’s story with potential investors who were interested in technology companies and their disruptive, exciting, and innovative products and services such as ours.”

In early March before these progressive updates, CSCW stock was valued at under $1. Now, CSCW stock has sits well above $1, including solid bullish movements in the past few days. Considering this, is Color Star worth watching?


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