Looking For Cheap Stocks To Buy For Under $1? Check Out Penny Stocks
It might seem evident that penny stocks include shares of companies trading for prices below $0.99. But according to the broader definition, the term includes other stocks that trade for less than $5. Whichever definition you subscribe to, ultimately, we’re talking about some of the cheapest stocks in the market today. They come with plenty of risks and, in some cases, huge rewards if you know how to pick them.
Something that novice traders tend to forget is the lower the price, the higher the volatility. All other things held constant, a stock that sits at 50 cents will require far less price appreciation to return significant gains. That is compared to another cheap stock that may be trading at $5 per share. In both cases, we’re technically talking about penny stocks. But the former would only need to move 5 cents to see a 10% return.
A similar move for the stock at $5 would be relatively menial at the end of the day. It’s that type of action day traders love to see. Certain circumstances can present unfounded opportunities to leverage small sums in exchange for upsized gains if that tiny company becomes something much larger.
Are Penny Stocks Worth It?
Yes, penny stocks are worth it if you know what you’re doing. Whether your strategy is investing or trading, how you approach risk and manage your positions is vital. There have been plenty of companies that began or were trading as penny stocks. Some then went on to become significant market leaders within their respective industries.
A few prominent examples include Enphase Energy (NASDAQ: ENPH), Novavax (NASDAQ: NVAX), GameStop (NYSE: GME), and even Nio Inc. (NYSE: NIO). Not all penny stocks go on to become captains of industry. Many ultimately implode on themselves due to capital constraints or failed business models.
Despite these cases, neither has stopped traders from capitalizing on the volatility and potential opportunity that many have presented, especially in 2022. Today we look at a handful of penny stocks under $1. We look at what might have acted as a recent catalyst and focus on anything upcoming that could be notable to watch if any of these names are on your list right now.
Penny Stocks Under $1 To Watch
ThermoGenesis Holdings (THMO)
Cell therapy company ThermoGenesis has seen its stock price slowly walk up after plummeting to fresh lows of $0.088 earlier this month. The company reportedly filed a public offering for over 11 million shares at the end of October. Since then, the focus has been on the strategy to deploy that capital.
ThermoGenesis outlined its use of proceeds from the offering, which will be used to acquire various equipment, hire personnel, and fund other expenses, all under its planned Contract Development and Manufacturing Organization for cell and cell-based gene therapies business.
CEO Chris Xu, Ph.D., recently commented on the company’s outlook in a Q3 earnings update this month. He said, “We plan to leverage our proprietary high-efficiency, semi-automated CAR-TXpress™ platform, which we believe is capable of meaningfully reducing processing time, improving cell recovery, and potentially cutting the manufacturing costs associated with CAR-T and other cell and gene therapies. We recently raised approximately $2.0 million in a public offering and continue to work on this exciting transformation.”
With capital in hand and a blueprint to deploy it, THMO stock seems to have returned to favor over the last few weeks. Shares have rebounded over 40% since they hit 52-week lows earlier in November.
ContraFect Corp. (CFRX)
Another biotechnology penny stock on this list is ContraFect. Like ThermoGenesis, CFRX stock took a big hit earlier this year after headlines came out during the summer. The company announced that a Data Safety Monitoring Board suggested stopping its Phase 3 DISRUPT study after an interim analysis.
Fast-forward to this week, and though CFRX stock is a fraction of the price it was earlier this year, momentum has begun building after an update on Monday. ContraFect announced that the French National Agency for the Safety of Medicines and Health Products authorized the company’s Clinical Trial Application for studying exebacase in prosthetic joint infections.
“This is a significant milestone for our company as it represents the next opportunity for exebacase to recapitulate the positive and durable results we have observed clinically in the compassionate use setting, after dosing 16 patients. Exebacase presents the potential for a truly revolutionary change to the current treatment paradigm for patients with prosthetic joint infections,” said CEO Roger J. Pomerantz, MD, in this week’s press release.
Against this backdrop, shares of CFRX stock climbed to fresh November highs.
Eargo Inc. (EAR)
Medical device company, Eargo found itself in a nice uptrend this week after hitting 52-week lows of $0.48 last Friday. Much of the latest uptick comes as Eargo closed a rights offering, welcoming Patient Square Capital as its new majority owner. However, what wasn’t announced by the company (so far) may have become a more robust topic of discussion.
Regarding biotechnology and medical-related stocks, “news” can come at a moment’s notice from other sources, including regulatory bodies. They are not restricted or required to report new developments like approvals when a company would prefer. In this light, it’s essential to watch oversight bodies like the FDA and USPTO, among other global organizations.
This week, Eargo was granted US Patent #11516601. The patent is titled Hearing assistance device with an accelerometer. Considering Eargo’s product portfolio is all about its hearing aids, the Patent comes with an upbeat sentiment on its potential benefits in protecting Eargo’s suite of hearing aids.