The definition of penny stocks includes stocks under $5, but for some, that’s too expensive. True penny stocks trading for less than $1 seem to have gained much more attention in the stock market today. Thanks partly to the overall stock market crash this year, many new stocks are gracing the sub $5 area. Many have slipped even lower, and now, investors & traders are looking to take advantage.
Why Buy Penny Stocks Under $1?
Typically sought after by day traders and swing traders, cheaper stocks offer up the potential for substantial gains quickly. The bullish case is that if you’ve got a $5 stock and a $0.50 stock, a price spike of 50 cents is very different in each case. For the stock trading at $5, 50 cents is a nice 10% gain. However, when we’re talking about stocks under $1, like the 50-cent example, this price change means a huge windfall and double the investment.
The opposite holds during periods where bearish trading trends ensue. The higher-priced counterpart only loses a small percentage compared to the cheaper of the two stocks. For this reason, penny stocks under $1 are typically sought out by short-term traders as compared to long-term investors. Today we ran a poll on Twitter asking what information traders are most interested in. The one leading so far is “stocks under $1,” so in response, we look at a handful of these cheap stocks and see what’s driving momentum.
Penny Stocks To Buy For Under $1
- Dermata Therapeutics (NASDAQ: DRMA)
- Quotient Ltd. (NASDAQ: QTNT)
- ComSovereign Holding (NASDAQ: COMS)
Dermata Therapeutics (NASDAQ: DRMA)
Shares of Dermata Therapeutics have been on the radar since the end of June. While there haven’t been any recent headlines, traders continue to monitor progress in the company’s pipeline. Dermata is developing treatments for medical and aesthetic skin conditions. Its lead candidate, DMT310, is currently targeting acne, psoriasis, and rosacea.
What To Watch With DRMA Stock
So what’s going on with DRMA stock? There aren’t any headlines to pair with the recent momentum in the stock market. Today, more than 10 million shares were traded by the early afternoon session. This is much higher than the last few sessions when DRMA stock didn’t trade more than 2 million shares per day. However, some attention has refocused on Dermata’s mid-June update discussing its Phase 2 DMT310 trial in moderate-to-severe rosacea.
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Dermata completed enrollment in the trial with high hopes based on prior its acne trial. Gerry Proehl, Dermata’s Chairman, President, and Chief Executive Officer, explained, “We believe that the similarities between rosacea and acne may lead to a similar reduction of inflammatory lesions in rosacea as we saw in our DMT310 Phase 2 acne trial, where acne patients treated with DMT310 experienced a 62% reduction in inflammatory lesions at week 12.”
Considering topline results are expected during the year’s second half, speculation has begun building.
Quotient Ltd. (NASDAQ: QTNT)
Shares of Quotient Ltd. have also seen their fair share of unusual trading activity over the last few days. The penny stock typically trades fewer than 3 million shares per day. However, over the last few weeks, volumes have been as high as 22.9 million. What’s behind the latest bout of volatility?
Fourth-quarter earnings and a multi-million dollar financing round have contributed to the latest market action. Quotient recorded $38.5 million for fiscal 2022 with over $83 million in cash and investments as of March 31st. The diagnostic company delivers solutions capable of fully automating specific diagnostic tests across different modalities. Its MosaiQ was built to increase efficiencies and improve clinical practice, creating operational savings for laboratories.
What To Watch With QTNT Stock
Despite the selling pressure following a $20 million offering, QTNT stock has rebounded. Helping with the bullish sentiment, insiders have contributed with purchases of the penny stock. Numerous directors picked up shares at average prices ranging from $0.24 to $0.30. In particular, Quotient Director Zubeen Shroff snagged 4,666,666 shares at an average price of $0.30.
ComSovereign Holding (NASDAQ: COMS)
Technology stocks have been somewhat of a mixed back over the last few weeks. However, that hasn’t meant they are entirely out of the question for watch lists. ComSovereign, for instance, has seen trading activity pick up since the end of June.
ComSovereign was awarded a 5G ORAN order from the National Institute of Standards and Technology Shares Spectrum Metrology Group. The initial award value was just below $200,000. In a June update, Dr. Dustin McIntire, Chief Technology Officer of COMSovereign, further explained that “This award is further validation of our technology capabilities and the performance of our 5G ORAN system, which continues to be recognized by organizations in government, academic research, and commercial markets.”
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What To Watch With COMS Stock
This leads us to July 7th. There haven’t been any new headlines or filings. However, above-average trading volume puts this on the list of penny stocks to watch under $1. Over the last few months, ComSovereign has made a point to focus on selling non-core business operations. The most recent sale was of its Sovereign Plastics unit. The company let the business unit go for $2 million.
“This transaction, along with others expected to be completed in the near future, significantly reduces our operating expenses, and repositions the business to capitalize on the global opportunities of 5G and beyond technology,” said John E. Howell, President of COMSovereign Holding Corp in a June 21st update.
Penny Stocks Under $1 To Watch
Whether you’re learning how to day trade penny stocks, swing trade, or figure out an investing style, a plan is a good place to begin. Of course, when it comes to stocks under $1, momentum and volume are critical aspects to consider before deciding to buy or avoid. Today we looked at a handful of penny stocks that can be purchased for less than a dollar menu item. Are they worth the risk, or should you avoid them entirely?
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