Penny stocks are low-priced shares of companies that are generally smaller organizations. Though there can be exceptions to the rule, retail traders tend to lean toward these types of companies because of a history of significant potential. There aren’t many places you can go in the stock market today and find triple-digit moves within a matter of days or even hours.
Where these stocks were once considered scams, the last few years of market action have deemed them something else. Thanks to the historical rise of meme stocks like AMC Entertainment (NYSE: AMC) as well as GameStop (NYSE: GME) and many other household names, the term “penny stocks” is being seen as more than just an association with no-name companies.
The rise of retail traders has brought plenty of volatility to the market and stocks in general. It has also popularized taking on higher risk. There are even Reddit boards dedicated to traders who took on too much risk, and while you might think this would push people to shy away, it seems to have done the opposite. With 2023 off to a choppy start, penny stocks have become somewhat of a go-to for an asset class with predictability related to constant volatility.
In this article, we look at some of the most volatile stocks of the group: stocks under $3. All other things held constant and only focused on price, a move of just 30 cents from a stock priced below $3 can equate to a significant percentage change in value compared to higher-priced stocks like Tesla (NASDAQ: TSLA) or Apple (NASDAQ: AAPL). The question you need to answer is: does the risk outweigh the potential reward or not?
Penny Stocks To Watch
D-Wave Quantum Inc. (QBTS)
Talking about cheap stocks also includes a conversation about penny stocks under $1. Volatility is at its peak in this range, and a 10-cent move can equate to a significant percentage change. D-Wave Quantum continued climbing higher after it hit 52-week lows last month.
One of the more recent catalysts that have helped boost the QBTS stock price is speculation on Q4 and 2022 earnings results. The company already announced it would move its earnings date to the week of April 10th. Considering it is this week, there’s an even more heightened sense of conjecture.
The quantum computing company has been in and out of the spotlight as the conversation around artificial intelligence and machine learning heats up. The so-called “ChatGPT stocks” have gained plenty of attention thanks to the breakthrough tech revealed earlier this year. D-Wave launched its hybrid solver plug-in feature selection as part of its focus on aiding companies to leverage quantum technology to streamline machine learning application development.
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With upcoming earnings expected this week, QBTS stock could be in focus. But if it is on the list, it’s important to note that a lot rests on the results of those earnings and the potential for a high-risk situation.
Cocrystal Pharma (COCP)
Another health-focused company, Cocrystal Pharma, also turned heads after its latest update. The company specializes in antiviral therapeutic development targeting influenza viruses, coronaviruses, noroviruses, and hepatitis C.
The news of a completed funding round that brought in some $4 million to the company has prompted a move in the stock market today. Major investors in the round include notable biotech investor and Cocrystal co-founder Phillip Frost, M.D.
“This investment by two highly accomplished, active industry leaders is a vote of confidence in our approach to developing novel drug candidates that address a global need for effective treatment of acute and pandemic viral diseases with safe antiviral therapeutics. Through this private placement Dr. Frost has increased his holdings and we welcome Mr. Hassan as a new shareholder,” said James Martin, co-CEO and CFO.
Notably, with “multiple near-term clinical milestones,” according to James Martin, COCP stock has grabbed some attention this week. Some of these milestones include the pending regulatory clearance of its CC-42344 platform in influenza A. Patient enrollment is expected to start in the second half of 2023. Cocrystal also plans to file with the Australian regulatory agency to start a first-in-human trial in its oral COVID-19 program with its CDI-988 platform. The trial is expected to begin in the first half of 2023.
EOS Energy Enterprises (EOSE)
In light of the latest macroeconomic events, energy stocks have been heating up recently. EOS Energy’s latest round of earnings came out at the end of February, which showed this strength echoed in its results. The company reported a 2022 revenue of $17.9 million, which was 4x the revenue of its previous year. It also increased the opportunity pipeline by 83% year-over-year to $7.5 billion.
Despite its growth, the Street was looking for more from EOS as the company missed sales expectations by a tight margin. The worse-than-expected results triggered a sell-off in the penny stock, returning it to the sub-$2 range.
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However, since then, EOSE stock has pushed higher, albeit choppy. The penny stock experiences frequent bouts of big daily moves in either direction. It’s not uncommon to see it jump 15% one day and drop just as much the next day or days to follow. This week started with a jump to new 2023 highs for EOS Energy stock.
Healthcare Triangle Inc. (HCTI)
Shares of healthcare industry cloud tech provider Healthcare Triangle has recently made waves in the stock market. The end of March saw it close on a $3 million agreement for cloud DevOps managed services. Healthcare Triangle’s services will allow customers to adopt and deploy cloud solutions that will be secure, compliant, and scalable.
Roy Sookhoo, COO of Healthcare Triangle, explained that “superior industry knowledge, unique value proposition of combining deep domain expertise – including cloud technology, data analytics capabilities, and managed services – with world-class delivery capabilities is resonating with customers who are looking for transformational solutions.”
This week the company closed on a half-a-million-dollar financing round that was priced above the market at $0.65 per share. The company expects the funding to support the development of tools for digital adoption within the healthcare arena.
List Of Penny Stocks Under $4
- D-Wave Quantum Inc. (NYSE: QBTS)
- Cocrystal Pharma (NASDAQ: COCP)
- EOS Energy Enterprises (NASDAQ: EOSE)
- Healthcare Triangle Inc. (NASDAQ: HCTI)
