Why Trade Penny Stocks?
Penny stocks are shares of small companies that trade for less than $5 per share. They are seen as an attractive investment option for smaller investors or those with limited capital. That’s due to their affordability and the potential for high returns. Here are some of the reasons why someone might consider trading penny stocks:
Affordability, Potential for High Returns, & Diversification
We’re talking about low-cost stocks. This makes it possible for individual investors to purchase large numbers of shares. This can result in substantial profits if the stock price increases. The low share price also means that even small increases in stock value can result in significant gains.
For example, if a penny stock’s price doubles, an investment of $500 would result in a 100% return. Investing in penny stocks can offer an opportunity to diversify a portfolio and reduce the overall risk. Investors may also see these stocks as a chance to identify undervalued companies. They look to reap the benefits of their potential growth.
High-risk, High-reward
Penny stocks come with a high level of risk but also offer the potential for high rewards. While they can provide attractive investment opportunities, it’s important to be aware of the associated risks. They are often traded on less regulated exchanges, making it difficult to buy and sell shares. This lack of liquidity can result in significant price fluctuations and make it difficult to exit a position if needed.
Cheap stocks are often subject to high levels of volatility. Their stock price can fluctuate significantly in a short period. That’s why it’s important to thoroughly research any investment opportunity, especially when it comes to low-priced stocks. In this article, we look at a few of the high-volume stocks under $5 to watch in the stock market today. Once you see a brief overview of catalysts at play, you can decide if they deserve a place on your list of penny stocks to watch.
Hot Penny Stocks To Watch
Agora Inc. (API)
Tech stocks haven’t gotten as much attention this week as they have in the last 30 days. Agora Inc., however, seems to have quietly mounted a rally since early November, thanks to the execution of several initiatives. These initiatives include shedding some of its assets, like its engagement cloud platform, Easemob. The company sold it to TI Cloud for over $14 million in December. Since the deal is expected to close this quarter, some are beginning to speculate on API stock.
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CEO of TI Cloud, Wu Qiang, also mentioned that the company sees “tremendous strategic synergies between TI Cloud’s and Easemob’s customer engagement cloud businesses, both in optimizing our joint product offering and in better serving our combined customer base…Easemob’s customer engagement cloud business perfectly complements our customer contact solutions and will further augment our market share in verticals such as technology, insurance, and automobile. We believe this transaction will also help accelerate the realization of TI Cloud’s vision in making customer contact a better Experience, with improved Efficiency.”
With the deal still pending, API stock could be one of the names to watch heading into the rest of Q1.
Surrozen Inc. (SRZN)
Targeted therapeutics company Surrozen has seen its share price recover more than 100% since mid-December. The company raised some $200 million to put to work. Surrozen has been reevaluating its Phase 1 SZN-1326 treatment candidate for ulcerative colitis.
Last year it voluntarily paused enrollment due to treatment-related adverse events. ALtho there were no other clinically significant abnormalities, Surrozen said it intends to analyze the clinical data available to undertake pre-clinical experiments to identify the source of the adverse results.
As the market awaits the outcome and Surrozen adds to its cash position, some have begun speculating as shares of SRZN stock continue reclaiming some of what was lost last quarter. Recent 13G filings show institutions, including BML Investment Partners and Regents of the University of California, holding positions between 5%-6% in the company. With this backdrop, SRZN stock could be one to watch as traders await more information on the Phase 1 trial.
SOBRsafe Inc. (SOBR)
Like Surrozen, SOBRsafe has been bouncing back after slumping late last year. Since the start of 2023, shares of SOBR stock have jumped back by more than 200% as the company focuses on expansion. The company provides alcohol screening solutions and recently brought on a Director of Commercial Development, Chris Burton, who the company hopes to tap into for gaining a foothold in the U.S. telematics market.
SOBRsafe Chief Revenue Officer Michael Watson explained that “Chris intends to connect us with major telematics companies and OEMs while establishing SOBRsafe in key markets like oil & gas and student transportation. He will also help us execute our strategy to integrate our technology into vehicles, as per the National Highway Traffic Safety Administration requirement outlined in the H.R. 3684 Infrastructure bill, that carmakers detect alcohol in-vehicle as early as 2026.”
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This news follows several events, including the first two SOBRcheck installations in the oil and gas industry last month. SOBRsafe made these installations as part of a plan that would drive expansion across all US locations for TerraTech Services. TerraTecha manages oilfield services and logistics.
With the commercial launch of its new SOBRsure wearable alcohol monitoring platform in the works, attention has grown around SOBR stock this year.
Spruce Biosciences Inc. (SPRB)
Spruce Biosciences has surged in the stock market this year. One of the most significant events impacting SPRB stock came in January after the company announced a strategic partnership with Kraken Pharmaceutical for exclusive licensing to develop and commercialize the tildacerfont platform in congenital adrenal hyperplasia in Japan. Spruce is set to receive $15 million upfront plus development and commercial milestone payments in addition to tiered double-digit royalties on net sales in Japan.
The company also provided clinical program updates and outlined its 2023 milestones in January. CEO Javier Szwarcberg, M.D., MPH explained, “2022 was a year of clinical execution across the board, which puts us in a strong position to report topline data for a number of our clinical programs this year, particularly our CAHmelia-203 study for adult classic CAH in the second half of 2023. We also continue to make progress in our Phase 2 P.O.W.E.R. study for the treatment of PCOS and anticipate reporting topline proof-of-concept data in the first half of 2023.”
This week Spruce Biosciences announced a $53.6 million financing round. Funds were earmarked to support the late-stage development of tildacerfont, which can potentially transform the treatment of CAH and other endocrine disorders.
CEO Szwarcberg, M.D., M.P.H. said, “This financing is expected to allow us to fund operating and capital expenditures into the first half of 2025, including the completion of CAHmelia-203, with topline results anticipated in the second half of 2023, and topline results for CAHmelia-204 anticipated in the second half of 2024.”
Next week SPRB stock could be on the radar as the company takes the stage at the SVB Securities Global Biopharma conference on the 15th.
List Of Penny Stocks To Watch
- Agora Inc. (NASDAQ: API)
- Surrozen Inc. (NASDAQ: SRZN)
- SOBRsafe Inc. (NASDAQ: SOBR)
- Spruce Biosciences Inc. (NASDAQ: SPRB)
