Penny stocks are something that retail traders have flocked to over the last few years. Since the pandemic, people find it isn’t as hard to make money in the stock market as they initially thought. That’s thanks, in part, to these newbies taking time to learn about other ways to make money during lock-down.
Fast-forward to 2021, and explosive moves from the likes of AMC Entertainment and GameStop captivate a new generation of “investors” looking for quicker ways to profit. This risk-on environment has led to the rising interest in buying cheap stocks. Today we look at a handful of names that can be purchased for under $5 right now. But whether or not they’re worth the risk is up to you to decide.
Penny Stocks TL;DR 30-Second Summary
- Penny stocks aren’t for the timid but the profit potentil that can come from them is hard to inore.
- By definition, these cheap stocks can be bought for under $5 a share, which is a big attraction to those looking for volatility.
- Today we look at a few penny stocks to buy for under $5
The name of the game is leveraging small moves in share price to capitalize on a significant percentage gain. It’s simple math, really. Let’s assume you’ve got a $4 stock in your portfolio. Instead of needing it to move several dollars for a big windfall, it only needs to jump pennies. In this case, a move of less than $1 equates to a jump of 20% or greater.
Trading penny stocks doesn’t come without risk, and a small move in the opposite direction can cut your portfolio value just a quick. Regardless, today we look at a few penny stocks that can be bought for less than $5. You decide if the risk is too high or not.
Short Squeeze Penny Stocks To Buy Under $5
- Leap Therapeutics, Inc. (NASDAQ: LPTX)
- Nuverra Environmental Solutions Inc. (NYSE: NES)
- Tellurian Inc. (NYSE: TELL)
1. Leap Therapeutics, Inc. (NASDAQ: LPTX)
Leap Therapeutics has been one of the biotech penny stocks to watch for weeks. Since the more significant move in September, LPTX stock has managed to experience considerable momentum. Much of this was initially due to the release of positive data related to its DKN-01 treatment candidate in gastric or gastroesophageal junction cancer. Results from a DisTinGuish study, where DKN-01 was combined with BeiGene’s tislelizumab and chemotherapy, demonstrated noticeable tolerability.
Jumping ahead to this year and the company has continued impressing Wall Street. Mizuho Securities and Raymond James have boosted price targets and maintained Buy ratings or equivalent. Furthermore, Leap could have several potential catalysts coming from two industry-related conference presentations this week. Earlier this week, CEO Douglas E. Onsi was at the HC Wainwright BioConnect Conference and, during the second half, will also present at the JP Morgan Healthcare Conference.
With a favorable analyst outlook, robust data from current studies, and upcoming presentations this week, LPTX could be one of the sub-$4 penny stocks to watch right now. It also doesn’t hurt mentioning that stocks with higher short interest are a favorite among retail traders. According to Fintel.IO, LPTX has a short float percentage of just over 18% right now.
2. Nuverra Environmental Solutions Inc. (NYSE: NES)
Nuverra is another one of the penny stocks we’ve followed lately. Like LPTX, NES stock has also fallen into the short squeeze penny stocks category. As of this article, the short float percentage sits around 26.75%, according to the latest data from TD Ameritrade.
The energy services logistics company has benefited from the recent excitement in industry-related names. As oil prices have risen, so has an interest in companies like Nuverra. Its suite of services offers energy companies the means to reach safety and environmental compliance standards, and a new acquisition has brought some added interest heading into the new year.
Nuverra entered into an acquisition agreement with Select Energy Services Inc. (NYSE: WTTR). This deal adds to Select’s growing list of M&A targets, and with the transaction expected to close this quarter, the countdown has begun. With this backdrop, NES stock has become one of the ancillary energy stocks to watch in January.
3. Tellurian Inc. (NYSE: TELL)
Similar to Nuverra, Tellurian has benefited from growing bullishness pushing energy stocks. In this case, the company manages and owns a portfolio of natural gas and liquified natural gas (LNG) assets. Everything from production to marketing and infrastructure falls under Tellurian’s umbrella. With reopening trends focusing on alternative fuel sources, LNG is one of the famous “bridge fuels” growing in popularity.
Some speculative trading might also have stemmed from Tellurian’s $50 million financing round last November. No new updates have come from the company since. However, the money was earmarked for “potential acquisition of upstream assets,” among other things. Meanwhile, President and CEO Octávio Simões said in Tellurian’s last quarterly update:
“By year-end 2021, we plan to produce approximately 70 million cubic feet equivalent per day (mmcfed). In addition, we have authorized a new drilling program and plan to drill 12 – 14 wells to produce approximately 220 mmcfed by year-end 2022. We have turned our focus to financing Driftwood LNG and plan to give Bechtel notice to proceed with construction in early 2022.”
In line with this list of penny stocks, TELL stock has also been in the spotlight for its higher short interest too. According to Fintel and TD Ameritrade data, the short float percentage sits around 14%.
7 Short Squeeze Penny Stocks
This is a continuation of our list of short squeeze penny stocks earlier in the week, “Short Squeeze Penny Stocks To Buy Now? 4 To Watch Under $5,” which included the first four names below:
- Lixte Biotechnology Holdings Inc. (NASDAQ: LIXT)
- SeaChange International Inc. (NASDAQ: SEAC)
- G Medical Innovations Holdings Ltd. (NASDAQ: GMVD)
- Creative Medical Technology Holdings Inc. (NASDAQ: CELZ)
In addition, the following penny stocks under $5 have also seen increased momentum thanks to curiosity about these highly volatility names:
- Leap Therapeutics, Inc.
- Nuverra Environmental Solutions Inc.
- Tellurian Inc.
If you’re interested in stocks like these, it’s vital to have a well-oil trading strategy in place before deciding to buy or avoid certain stocks. Knowing why something is moving and understanding the potential downside can also help.
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