Are Penny Stocks Worth It?
This might be a question you ask yourself whenever you see stocks trading for pennies on the dollar. Are they worth the risk? A change in price of just a few cents can destroy your account. But, simultaneously, a similar move in the opposite direction can present an opportunity for exponential gains. According to the standard definition of penny stocks, we’re usually talking about companies with share prices below $5.
In the stock market today, there are hundreds of these types of stocks, and many are from companies that are household names. Thanks to the sell-off in 2022, you can find some of the most recognizable companies with publicly traded stock prices in this niche. Whether or not they’re “worth it” in the long term is to be seen. But short-term trends reign supreme now as many of these notable stocks have experienced significant breakouts (and breakdowns).
This volatility has led traders to hunt for the next multibagger penny stocks to buy. Some of that focus is on the cheapest names in the stock market right now. This article looks at some of the cheapest stocks trading right now. These can be bought for pennies on the dollar. When you talk about volatility, all other things aside, these are some of the most volatile you can find.
A move of 10 cents or less equates to a meaningful move in share price (in either direction). We look at some of the things happening with the companies and any upcoming events to consider, and then you can decide if they’re worth adding to your penny stock watch list or not. This continues the list of penny stocks in our article “3 Hot Penny Stocks Under $1 To Watch For February 2023.” The complete list is provided at the end of this update.
Hot Penny Stocks Under $1 To Watch
IronNet Inc. (IRNT)
Cybersecurity stocks have begun gaining attention in the stock market recently. With a slew of tech breaches, some of the leading companies in the sector have seen an uptick in momentum. IronNet has seen its share price steadily increase throughout the first few weeks of the year. Last month it beefed up its Network Detection and Response solution to offer a broader visibility of cyber threats to its users. Its IronDefense solution allows for advanced and early visibility of cyber threats that may have slipped through endpoints.
Fast forward a few weeks, and now it’s working with the U.S. Navy’s Naval Sea Systems Command. IronNet announced the new development this week following a successful pilot program. General (Ret.) Keith Alexander, CEO and founder of IronNet, explained, “This partnership comes at a critical moment when global cyber threats are at an all-time high…This initial contract, which has an annual recurring revenue (ARR) value of $1.2 million to IronNet, includes 17 DIB customers and should help us to establish a base with a branch of the U.S. military upon which we are working to expand.”
These headlines helped give shares of IRNT stock a boost to new 2023 highs this week.
Virax Biolabs Group Ltd. (VRAX)
Virax Biolabs is one of the penny stocks under $1 that has gained more ground during the first few weeks of 2023. The company’s news of a human papillomavirus test kit at the start of the year helped bring some optimism to the beaten-down stock.
The ViraxClear line of tests has been one of the core points of focus for the company. This HPV kit aims to lower the cost of currently available tests in Europe with the capability to supply roughly 200,000 tests per week.
This week Virax announced a purchase order to launch a COVID-19 and influenza A+B antigen combo rapid test with Cosmos Health (NASDAQ: COSM). This deal gives Cosmos exclusive distribution rights for Greece and Cyprus. There’s also an opportunity for them to distribute the ViraxClear branded test kits across Europe on a non-exclusive basis.
Grove Collaborative Holdings Inc. (GROV)
Shares of Grove Collaborative have been clawing back gains after hitting 52-week lows of $0.1815 late last year. The consumer products company has focused on building a sustainable model for eco-friendly brands ranging from household cleaning and personal care to baby and pet care.
Grove secured a $72 million term loan in December to help it weather the economic storm for many small companies. The company said it would help fund ongoing operations and refinance existing debt. But, with earnings season in full swing, the latest performance results could be a more significant focus right now.
In its last quarterly update, Grove reported sales of $77.73 million. The company is also guiding for $313 million to $320 million for the full year’s revenue in 2022. Management has already set a tone of cautious optimism heading into the new year. Following the results, analysts at Canaccord Genuity started coverage on Grove with a Buy rating and set a $2 price target.
GeneDx Holdings Corp. (WGS)
GeneDx is one of the penny stocks discussed earlier this month after releasing a significant update. Formerly known as Sema4, the company changed its name earlier this year to better convey its focus on genomic and clinical insights. Its exome and genome testing are further enhanced by its health information platform, Centrellis.
In addition, one of the recent catalysts placed a focus on insider activity. The latest filings revealed a significant purchase from the Icahn School Of Medicine At Mount Sinai. The organization purchased over 28.5 million shares at the offering price of $0.35. Furthermore, a new SCHEDULE 13D showed the Icahn School’s stake sitting at 15.6%.
GeneDx has centered its focus on delivering actionable and personalized health data to provide better diagnosis and improve drug discovery. Using genomic and clinical information allows for the use of exome and genome testing coupled with rare disease data sets in developing effective treatment plans. The latest big-money bets from not only the Icahn School but companies like Opko Health (NASDAQ: OPK) have brought some speculatively bullish attention to the company this quarter.