The volatility in the stock market today may have you looking at investing in penny stocks. These stocks, typically priced below $5, are known for their massive price swings. They’re also known for their potential for high returns. However, this doesn’t come without considerable risks. This article will explore some of the basics of trading cheap stocks and deep dive into a handful moving in the stock market today.
Understanding Penny Stocks
Let’s begin by defining penny stocks. These stocks usually represent smaller companies that trade at relatively low share prices. Due to their price and limited liquidity, penny stocks often experience extreme fluctuations. Unfortunately, this also means they can be exploited by scammers, making them a high-risk investment option that requires thorough research and due diligence.
Penny Stocks: Pros and Cons
One of the main advantages of trading penny stocks is their potential for substantial returns. Since these stocks are lower-priced, even a small increase can result in significant gains. For instance, a stock priced at $0.50 per share could double in value with just a 50-cent increase. However, the opposite is also true; losses can be substantial if the stock price drops.
A major risk associated with penny stocks is their low liquidity, making it harder to exit trades at an optimal price. Another risk is that the companies are often small and may have limited resources. That makes them more susceptible to market downturns or regulatory changes. Additionally, since these companies are not as widely followed as larger ones, it can be more difficult to obtain reliable information about their financial health or growth potential.
Just look at some of the most active penny stocks today. Dermata Therapeutics (NASDAQ: DRMA) saw its share price skyrocket by a little over $1. A move like that wouldn’t mean much for a stock like AAPL. But for DRMA stock, it equated to a jump of more than 70%. Agrify Corporation (NASDAQ: AGFY) was another one of the big movers of the day. Its price climbed just 22 cents, but the associated percentage move was more than 65%.
Are Penny Stocks Worth Your Time?
Should you invest in penny stocks? Are penny stocks worth it? The answer depends on your personal investment goals and risk tolerance. If you’re seeking high-risk, high-reward investments and are willing to conduct research, penny stocks may be appropriate for you.
On the other hand, if you prefer more stable, low-risk investments, you might want to explore other alternatives. Regardless of your preference, we’re taking an in-depth look at several companies that have recently caught the attention of investors in the stock market today.
Penny Stocks To Watch
Baudax Bio Inc. (BXRX)
Baudax Bio has been one of the biotech penny stocks to watch recently. That’s been thanks to both industry momentum and the company hitting new milestones. The company focuses on hospital and related settings with regard to patients undergoing surgery.
Last month it reported positive results from a second interim analysis of a Phase 2 trial for its BX1000. The platform is designed for patients undergoing elective surgery using total intravenous anesthesia. “With data from 50% of the planned total enrollment for this trial, these results provide us with confidence that BX1000, combined with our reversal agent BX3000, may provide more precise control of neuromuscular paralysis for surgical patients and have the potential to improve on total time of blockade and reversal compared to available agents,” said CEO Gerri Henwood commenting on the milestone.
THe important thing to note right now is that there could be some important data on the horizon. In the March 27th update, Baudax reported that it’s expecting topline results in “late April/early May,” which puts a countdown timer on things especially right now.
BGC Partners Inc. (BGCP)
Shares of BGC Partners stock have been in recovery mode over the last week. The uptrend comes after BGCP imploded at the start of April thanks to headlines. The company announced its outlook for the first quarter of 2023, which it expects to be “slightly below” the midpoint of its previously reported range. Shedding more light on the statement, BGC management explained that the revenue would’ve been roughly $9 million higher if not for the US dollar’s strength.
Considering BGC is a global brokerage and fintech company, foreign exchange risk can present certain headwinds. Now that the expectations were released, traders are weighing the latest round of bigger bank earnings against the prospects of BGC. Helping spark some speculation in the stock market recently is its upcoming financial results for the first quarter. The company plans to release these prior to the market open on May 3rd. Like BXRX, BGCP stock has now put a countdown clock in front of investors as April winds down.
– The Future of Buying Penny Stocks: Trends for 2023
G Medical Innovations Holdings (GMVD)
Like BGCP, GMVD stock has been on the rebound lately. The move comes after shares slipped to 52-week lows of $0.52 shortly after the company announced a public offering. G Medical raised $9.6 million at a price that was a steep discount to the market at the time of the initial news. Needless to say, with fresh cash in-hand, the market is now looking to see how it will deploy the capital.
G Medical provides mobile health and digital health products including its Prizma medical device. It can effectively turn a smartphone into a medical monitoring device used by healthcare providers and individuals. Among the use of proceeds for that offering, G Medical highlighted potential mergers and acquisitions, which has prompted a bit more interest into its next steps.
This week the company gave an update on its recent patient enrollment growth for its home monitoring service. Enrollment in its home monitoring services grew by 194% from January to April, 2023. In particular, G Medical entered into an agreement with AdventHealth of Central Florida. It operates 20 hospitals and emergency rooms. The company also recently signed an agreement with MiCare Path to integrate MiCare Path’s software platform and visualization tools to its devices. On the heels of this update, GMVD stock turned heads on Monday.
List Of Penny Stocks
- Baudax Bio Inc. (NASDAQ: BXRX)
- BGC Partners Inc. (NASDAQ: BGCP)
- G Medical Innovations Holdings (NASDAQ: GMVD)