The simple definition of penny stocks refers to those which trade below $5. But there’s an entire subset of companies far below that threshold, “true penny stocks,” as many call them. These are shares of companies trading below $1 and are some of the most volatile in the stock market today. So why “waste time” if they’re so volatile?
One of the biggest reasons for trading penny stocks under $1 is capitalizing on small moves in price. Even a 10-cent move can mean 10% or more from these cheap stocks. Risk and reward is the name of the game, and more times than not, traders look at the ticker symbol before the company. Does that mean all penny stocks under $1 aren’t worth investing in for more than a day?
Not necessarily, and Camber Energy (NYSE:CEI), a company we’ve discussed since mid-August, is a prime example of that. Back on August 20th, shares of CEI stock were trading around $0.33. Within a few days, the stock moved up to $0.55. Now, fast-forward a few more weeks, and it’s trading six times higher thanks to progress made by the company. The technical trade ended up turning into a more fundamental-based one as more investors began looking deeper into the company and not just focusing on its 3-letter stock symbol.
Today we’re looking at 4 penny stocks to watch under $1 right now. Heading into October, will they be on your list of top names?
Penny Stocks Under $1 To Watch
- Alpha Esports Tech (OTC:APETF)(CSE:ALPA)
- Farmmi Inc. (NASDAQ:FAMI)
- Sundial Growers Inc. (NASDAQ:SNDL)
- Borr Drilling (NYSE:BORR)
1. Alpha Esports Tech (OTC:APETF)(CSE:ALPA)
Esports has become a hot area in the stock market and within the tech arena. Thanks to the pandemic, at-home “events” like playing video games brought even more attention to an already rapidly advancing industry. There has been a flood of new interest in the industry since 2015. Just slightly more than 800,000 people had heard about it at that time. These numbers soon changed, right now, Newzoo finds that nearly 2 billion people are well aware of the industry itself, with over 660 million making up the active live streaming audience. While the likes of Activision and Electronic Arts are scrambling for market share, pure-play esports companies have already staked a claim in this emerging sector.
Alpha Esports tech is one of these companies. It went public earlier this year and since then Alpha has focused on strategic deals to expand its access to players and build upon its active userbase. Where the real opportunity comes to light is the way Alpha Esports Tech Inc. is monetizing its user base. Its GamerzArena+ product is a subscription-based service allowing members access to higher-paying tournaments along with the ability to access unique and special events.
What To Watch With APETF/ALPA Stock
Alpha has already reported partnerships and & working relationships with top names in sports, entertainment, and education. These include The New Jersey Devils, The Vancouver Whitecaps, Barstool Sports, ESPN Radio, Devil Child, Oxygen Esports, Notre Dame, Syracuse University, and Penn State, to name a few.
This quarter, Alpha also became the Official Online Gaming Portal of Nets Gaming Crew, the NBA 2K League affiliate of the Brooklyn Nets. Spanning the global scale, including India, Brazil, and North America, Alpha is quickly building a solid footing in the market. Led by experienced names from Red Bull, Reel One Entertainment, The Golden State Warriors, Mount Sinai, Victory Square Technologies, Activision, and Atari, Alpha is emerging as one of the esports stocks to watch in 2021.
On top of that, this week began with Alpha’s news that it was now DTC eligible in the US. What does this mean? US shares are eligible to be electronically cleared. This essentially allows the stock to be traded over a much wider selection of brokerage firms. With this increased market access, will it be one of the names on your list of penny stocks to watch in October?
2. Farmmi Inc. (NASDAQ:FAMI)
Another one of the cheapest penny stocks on this list is Farmmi Inc. Unlike Alpha Esports, the company focuses on retail product sales, particularly mushrooms. We’re not talking about the popular niche involving psychedelics. Farmmi sells consumer-grade mushrooms, supplying its agricultural products to China.
The last few weeks haven’t been great for FAMI stock in the market. That was mainly due to a recent financing deal that saw the company raise $81 million in a public offering. While fresh capital is always significant for growth initiatives or paying down debt, the price it’s done at is what traders focus on. When the funding news came out, FAMI stock traded north of $0.50. However, once details emerged on the specifics of this deal, the market saw Farmmi raised these funds at $0.22, a steep discount to the market.
What To Watch With FAMI Stock
This week the market got a glimpse of that in the company’s latest update. Farmmi won another multi-product sales deal to export to Isreal. This was for its dried whole and sliced Shiitake mushrooms and dried black fungus. The deal came shortly after the company won an order earlier in the month for export to Southwest Asia.
Yefang Zhang, Farmmi’s Chairwoman and CEO, commented, “We continue to execute on our business and drive growth at existing and new customers. We are benefitting from robust demand in traditional geographies, including China, while developing new markets, including Israel. At the same time, we are leveraging our strengthened competitive and financial position to lay the groundwork for our future success, as we prioritize building increased value for shareholders.”
FAMI could be one of the penny stocks to watch with new cash and new deals heading into October.
3. Sundial Growers Inc. (NASDAQ:SNDL)
Marijuana stocks are back in the spotlight this month. After multiple quarters of decline, pot stocks have gotten a spark thanks to proposed legislation. In this case, the SAFE Act is in focus, and it could be the key to getting cannabis a step closer to federal legalization. The Secure and Fair Enforcement (SAFE) Banking Act would allow state-licensed marijuana businesses to engage freely in relationships with banks and other financial institutions.
The hook to this latest iteration of the SAFE Act is that it was stuffed into the National Defense Authorization Act. Since the NDAA generally passes and gains approval, hopes are high that SAFE banking will become a reality. With that has come a “green wave” in the stock market, boosting marijuana stocks higher.
As one of the cheapest cannabis stocks on platforms like Robinhood and Webull, Sundial Growers has gained popularity. Despite a massive share structure and constant financings, interest remains attentive in SNDL stock.
What To Watch With SNDL Stock
Aside from the legislative events to track, Sundial has been focused on product expansion. Earlier this month, the company launched the first Canadian “Caviar Cone” under its Top Leaf brand. Andrew Stordeur, President and Chief Operating Officer at Sundial. “In order to compete in this preferred segment of the cannabis industry, product quality is absolutely vital. Top Leaf’s Caviar Cones is the first of many high quality, high THC and flavourful products developed to satisfy even the most experienced cannabis user.”
With attention on marijuana stocks thanks to SAFE Banking’s potential, companies like Sundial have come back into focus. The biggest question is should SNDL stock be one of the names on your watch list in October?
4. Borr Drilling (NYSE:BORR)
Energy stocks are charging up the stock market this week. Borr Drilling is one of the names we’ve discussed plenty of times over the last few weeks. With daily trading volumes also picking up, BORR stock has been hard to ignore for traders looking for cheap energy stocks to watch.
Where does Borr fall into the mix of energy stocks right now? The company provides drilling services to the oil and gas exploration and production industry. It operates and owns jack-up rigs used by its customers.
What To Watch With BORR Stock
Growth has been a big focus for the company. For example, its recently reported second-quarter results showed that Borr increased its revenues by 13% over the first quarter. It also realized a boost in its adjusted EBITDA. Dealmaking activity has also been pushed forward. This came initially with selling one of its JV’s and entering into multiple LOA/LOIs for two rigs in West Africa. As of the end of August, Borr was awarded 28 new contracts, extensions, exercised options, and LOA/LOIs. According to the company, this represents over 6,300 days of potential backlog and $542 million in revenues, excluding unexercised optional periods.
With added attention on energy stocks right now, BORR has become one of the lower-priced companies to watch.
Best Penny Stocks To Watch Right Now
Are the cheapest stocks the best penny stocks to watch right now? That’s a question for you to answer on your own. What we can see, however, is that of the names mentioned in this article, many have seen more significant moves in the market lately. A mix of industry momentum and company news have factored into the equation. On top of that, retail traders looking for cheap stocks to add to their watch lists may have also found some exciting things to follow with some of these companies. Heading into October, will any of these be on your list of penny stocks to watch?
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