Penny stocks are one of the most volatile asset classes in the stock market today and for a good reason. Day-in and day-out, we write about these small companies as traders hunt for the next big breakout stock.

Swift moves higher thanks to a mix of catalysts and speculation have triggered some of the most significant market moves. Companies like AMC Entertainment (NYSE:AMC) and GameStop (NYSE:GME), both former penny stocks, are two major contributors to the emergence in popularity of these types of stocks.

What Are Penny Stocks Anyway?

But what are penny stocks anyway? The basic definition includes stocks under $5. Some platforms may have different criteria to define these types of cheap stocks. However, the broad agreement among financial outlets concludes that the $5 threshold is the upper limit.

Regardless of other definitions, the goal is to make money with cheap stocks. Today, we look at a few that can be bought for under $5 and have gained some attention from traders.

Penny Stocks To Buy For Under $5

Biofrontera Inc. (NASDAQ:BFRI)

best penny stocks to buy Biofrontera BFRI stock

One of the most active penny stocks today is Biofrontera Inc. This not only comes after months of selling pressure but also after one of the most significant updates of 2022 so far. The biotech company updated its patient recruitment for a Phase 3 study. Biofrontera’s Ameluz® photodynamic therapy (Ameluz®-PDT) is being studied in combination with the BF-RhodoLED® lamp in the U.S. for treating superficial basal cell carcinoma.

The update included the status that 70% of the planned 186 patients are enrolled with expected completion of the enrollment by year-end. Erica Monaco, CEO of Biofrontera, explained, “Following successful FDA approval, Ameluz® would be the only drug in the United States approved for the treatment of superficial BCC with PDT, which we expect to further increase the growth potential of our flagship product Ameluz® in the medium term.”

What Do Analysts Think About BFRI Stock?

Biofrontera has experienced a wild ride since its IPO. Shares have skyrocketed to more than $14 per share at times. Meanwhile, the latest downtrend took BFRI below $5. In light of the recent update from the company, it may not be a bad idea to see where analysts stand on the company. The most recent rating from Benchmark Capital placed a Buy on the penny stock. The firm also issued an $11 price target, more than 100% higher than current levels.

Spectrum Pharmaceuticals Inc. (NASDAQ:SPPI)

biotech penny stocks to watch october Spectrum Pharmaceuticals Inc. (SPPI stock)

Another hot penny stock today is Spectrum Pharmaceuticals. As one of the lowest-priced names on this list, SPPI shares haven’t needed to move too much to record a significant percentage change this week. Since Monday’s low of $0.67, the penny stock has bounced more than 10% so far. There weren’t any significant headlines to pare with the move; however, a strategic investment made into the company earlier in January may have come back into focus.

At the beginning of 2022, Hanmi Pharmaceutical entered into a $20 million equity purchase agreement priced at $1.60 per share. The price was a premium to the trading levels at the time of the announcement and is still an even higher premium as of this week. The investment also came as Spectrum announced revisions to licensing agreements for its ROLONTIS and poziotinib platforms. These are the company’s lead candidates in treating neutropenia in cancer patients and targeting specific gene mutations found in breast and non-small cell lung cancers.

After the news broke, the CEO of Hanmi Pharmaceutical Se-Chang Kwon, Ph.D., explained, “Following a recent meeting in Korea with Spectrum management, we wanted to make this investment as a symbol of our confidence in their strategic direction moving forward.”

As the company continues seeking FDA approvals for its pipeline, this new investment may have become a source for upbeat speculation in SPPI stock.

Outlook Therapeutics Inc. (NASDAQ:OTLK)

penny stocks to buy Outlook Therapeutics OTLK stock

Another one of the biotech stocks on this list is Outlook Therapeutics. Thanks to new developments, the company’s shares have steadily climbed higher over the last few weeks. Outlook is developing treatments, including its bevacizumab for targeting wet age-related macular degeneration and other retinal conditions. There’s currently a pre-commercialization strategy for its ONS-5010 / LYTENAVA™ that has sparked some interest among traders.

There’s already been positive clinical data reported from last year in multiple clinical trials. Recent financing deals have placed the company in a position to fund progress through an expected biologics license application approval by Q1 2023. What may have also helped boost sentiment for traders is a string of industry presentations made over the last few weeks.

Outlook participated in HC Wainwright’s BioConnect conference and the Virtual Investor 2022 Top Picks Conference.

What Do Analysts Think About OTLK Stock?

The most recent rating from Ascendiant Capital slapped a Buy rating on the company. Ascendiant also increased its $7 target to $7.25 before the end of 2021.

What Are The Best Penny Stocks To Buy Now That The Market Has Bounced?

There’s no shortage of volatility in the stock market. Each day we observe different sector and industry trends with related stocks responding in-kind. Whether you’re searching for a quick flip or an opportunity to “get in early,” penny stocks have a lot to offer. The first step to start making money with them is learning how to trade. If you’re brand new to trading and looking for the best penny stocks to buy now, start by reading up on some of the trading basics. Here are a few helpful links to get you started:

If you enjoyed this article and you’re interested in learning how to trade so you can have the best chance to profit consistently then you need to checkout this YouTube channel. CLICK HERE RIGHT NOW!

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