Penny stocks have given incredible returns to investors who know how to trade them. I’m talking about some of the cheapest stocks in the market. According to the standard definition of penny stocks, these are shares of companies that can be bought for under $5. But don’t let the low price fool you. Just because they’re cheap doesn’t mean they don’t come with plenty of risks.
Despite these risks, retail traders remain fixated on these high flyers. That’s thanks to their potential to produce significant gains in days or even hours. The meme stock trend started by AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME) has taught traders penny stocks aren’t just OTC companies. There are plenty of NASDAQ and NYSE penny stocks that can be traded daily. Today, we look at a handful of names among the cheapest on this major exchange.
Nasdaq & NYSE Penny Stocks To Watch
Best Penny Stocks To Buy In 2022
Are penny stocks worth the risk? That greatly depends on your trading strategy and ability to handle risk. When looking at stocks under $1, volatility plays a significant role. Much of the excitement is likely a result of heavy speculation. In many cases, the extensive breakouts you’ll see from cheaper stocks aren’t as long-lasting as some of the moves made by their higher-priced cohorts. If you like high-risk, higher volatility scenarios, penny stocks under $1 might have a place on your watch list. Here are a few gaining momentum in the stock market today.
1. Molecular Data Inc. (NASDAQ: MKD)
Supercomputing and cloud stocks have come into focus this week. This is after a surge in Bitcoin prices spiked interest in companies involved with blockchain technology solutions. This also made an impact on cryptocurrency penny stocks. Molecular Data is a China-based tech company that has gained some ground recently, in tandem with Bitcoin’s move.
One of the critical catalysts for MKD stock is what it announced late last year. Molecular Data inked a deal to form a joint venture for building supercomputing clusters in North America. In particular, this entailed the construction of 2 plants in the US, with Molecular expecting to add 13MW in the beginning phase. According to the company, this new business line is expected to bring in roughly $5 million in revenue with $4 million in gross profit.
Via blockchain technology development initiatives, Molecular Data previously began building infrastructure for its core chemical logistics business. Furthermore, in a push to extend its operations into the digital marketplace, it has even gone as far as designing plans for migrating into an “Industrial Metaverse.” In a December update, Dr. Dongliang Chang, Chairman of the Board of Directors of Molecular Data, said, “Based on its technical characteristics, blockchain elements are building blocks for application scenarios of the Industrial Metaverse. Therefore, we will continue to develop our blockchain capabilities to further enhance our competitiveness in the chemical platform and related businesses.”
With the recent focus on crypto and metaverse stocks, MKD has gained momentum in the stock market today.
2. Leju Holdings Limited (NYSE: LEJU)
Thanks to some profit-taking, a recently popular meme stock, Leju Holdings faced a two-day pullback at the end of last week. Prior to that, shares of LEJU stock were surging in tandem with the broader move in China-based company stocks. Leju specializes in eCommerce tech specific to the real estate and home furnishing industries. It also operates real estate & home furnishing sites and strategic partnerships with companies like SINA Corporation and Tencent Holdings Limited.
There haven’t been many headlines from Leju in recent weeks. But one thing that may have turned attention back to this NYSE penny stock is its plans to release earnings. This week, the company delivers its FY 2021 results on March 31 before the opening bell. With this backdrop, a little speculation has begun building as to what may get revealed in these results.
When the company reported its first-half results from 2021, Leju saw an increase in revenue by 8% year on year to $301.1 million. Its eCommerce services jumped by 13% to just over $231 million over the same period. “In the second half of the year, Leju will firmly seize the opportunities created by the digitalization of real estate marketing and deepen cooperation with developers as we strive to expand our advertising business and develop new e- commerce business models. At the same time, we will continue to focus on platform construction and content creation and make efforts to improve user growth, optimize user experience and stickiness and further consolidate Leju’s influence among industry media,” explained Geoffrey He, Leju’s Chief Executive Officer in a formal update. Now we wait to see if Leju could execute effectively to meet the expectations that were set.
3. SOS Limited (NYSE: SOS)
Thanks to excitement in the cryptocurrency industry, companies like SOS Limited are at the center of interest. SOS has focused on big data and blockchain-based solutions. One of the core initiatives of SOS over the last few months has been the construction of its North American super-computing and hosting center.
Late last year, SOS discussed actively expanding its footprint and how this center will help achieve that goal. Located in Wisconsin, the center was billed as an “important part of SOS’ efforts” to “create its own blockchain technology” ecosystem. Considering the launch of this business arm was slated for Q1 of this year, timing has come back into focus. Not many new updates related to this initiative have been released. However, SOS raised roughly $90 million at the end of 2021, earmarked for developing its business in North America, among other things.
As Bitcoin prices surge, SOS stock has become one of the names to know.
Penny Stocks, Risk, Reward, & Making Money
Making money with penny stocks seems easy. First, find some stocks that have irregularly high volumes. Second, place a trend and, third, sell for a profit. But there is a lot more to go into it than simple steps like these. Understanding why specific penny stocks are moving the way they are and identifying trends are two important things to factor in. For instance, it’s already a highly volatile market when it comes to things like cryptocurrency. With that backdrop, the volatility in related penny stocks can be amplified. Have that in the back of your mind, especially when putting together your list of penny stocks under $1.