Penny stocks are one of the most exciting investment vehicles in the stock market today. First, they offer a way for the market to gain exposure to start-ups without being angle investors or needing accreditation. You’ve got pre-IPO investment platforms that provide such opportunities. But it’s usually only to a select few who meet certain income and asset standards.

You can easily and quickly find an already publicly-traded company at its grassroots stages with penny stocks. They’re also fully accessible no matter how many assets you have or how much money you make. In addition to this, despite the higher risk, the rewards for buying penny stocks can be enormous. The chances of seeing a 50%, 100%, or even 500% move in a single day are much higher than blue-chip stocks.

If you’re brand new to this world of cheap stocks, you may not know what I’m talking about. Simply put, I’m talking about stocks trading for less than a value meal at a fast-food restaurant. These stocks under $5 can grow to become formidable competitors in any industry if they play their cards right.

Just look at AMC Entertainment (NYSE: AMC), which has become a leader in the Russell 2000 Small-Cap ETF (NYSE: IWM). Shares of the movie theatre company and meme stock were trading below $3 earlier this year. At one point they had reached highs of over $70 and still trade above $30. Today we look at a handful of names that have skyrocketed out of penny stock territory and turned heads this week.

Former Penny Stocks To Watch

Stran & Company (NASDAQ: STRN)

It wasn’t that long ago when Stran & Company was trading below $5. The company’s recent IPO saw shares debut at $3.10. Since then, shares have managed to jump more than 100% at times. Heading into the shortened week, STRN stock is planted above $6 as broader markets attempt to recalibrate following recent selling pressure.

Read more: Best Penny Stocks to Buy as 2021 Ends? 3 to Watch Right Now

Stran’s branding & marketing platform has earned some attention this quarter. The company services Fortune 500 companies offering loyalty & incentives to branded merchandise and sponsorships. Adding to the company’s current growth strategy, Stran not only managed to raise over $20 million in an offering but also brought on Steve Paradiso as Chief of Staff. Paradiso’s experience spans decades of industry involvement. This includes his most recent stint as President and CEO of ePromos, a Top 40 ranked name on the Advertising Specialty Institute’s 2021 Distributors list.

With cash in hand and an expanded & experienced leadership team, STRN stock continues to turn heads.

former penny stocks to buy or avoid Stran & Company STRN stock chart

Cassava Sciences Inc. (NASDAQ: SAVA)

Shares of Cassava Sciences were red hot during the premarket session on Tuesday. One of the main catalysts came as social media began buzzing. The point of interest was on a publication that stated, “Neuroscience found no evidence of manipulation of the Western blot data or other figures of this publication.”

Allegations were previously made citing data from a 2005 paper were manipulated. Remi Barbier, President & CEO, emphasized that “This clearance is from an independent third party who is neutral and expert in the field. This reinforces my conviction that false and misleading allegations of scientific misconduct being made against us are simply designed to enrich those making them. People who seek to profit from false allegations may not comprehend the harm they are causing the Alzheimer’s community, or perhaps they simply don’t care. Leaving a trail of destruction in their wake in the quest for profit, with little concern for patients or their caregivers, is a twisted form of money-making and the opposite of what people with dementia deserve.”

At the end of 2019, when we began following the progress of Cassava, its share price was below $4. The company had just released highly positive data regarding its Alzheimer’s medicine PTI-125, and SAVA stock was approaching new highs for the year. With the latest update sparked more attention in the stock market today, SAVA could be another one of the former penny stocks to watch.

former penny stocks to buy or avoid Cassava Sciences Inc. SAVA stock chart

Biofrontera Inc. (NASDAQ: BFRI)

Where SAVA stock was a penny stock over a year ago, Biofrontera is a more recent focus on our site following an initial pull-back from its IPO highs. BFRI stock was trading below $5 ahead of its first earnings update in late November. Speculation was also building because it was one of the low float penny stocks to watch.

Thanks to several substantial updates, the dermatologic treatment company has turned heads over the last few weeks. First, Biofrontera has begun enrolling subjects in its Phase 1 study of the safety and tolerability of photodynamic therapy in treating actinic keratosis using Ameluz with the company’s BF-RhodoLED XL lamp. The study will ultimately enroll 100 subjects with mild-to-severe actinic keratosis on their face and scalp. More recently, analysts have issued bullish ratings and price targets after beginning enrollment of subjects in a Phase 2b trial evaluating Ameluz + BF-RhodoLED® for the treatment of moderate-to-severe acne. Benchmark analysts were the latest to give a Buy on the stock along with an $11 price target.

Read more: Hot Penny Stocks To Buy For Under $5 Right Now

Not only has BFRI stock far exceeded that target, but shares also ripped higher during early trading on December 21. With retail momentum as a tailwind, this has become one of the hottest former penny stocks to watch this week. The big question is can it sustain these higher levels? BFRI stock is up over 500% since its November lows.

former penny stocks to buy or avoid Biofrontera Inc. BFRI stock chart

Are Any Penny Stocks On Your List Right Now?

You can see how even the cheapest stocks can become a formidable competition to their respective cohorts. This isn’t the case for all penny stocks. However, whenever you’re talking about smaller companies, the idea of “getting in early” can become a focus. With that, it’s always important to weigh risk and reward. Some companies you think are promising may or may not be the best stocks to buy. So make sure to do your research before diving straight into one of these high-volatility names.

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