Penny stocks are shares of companies that trade for less than $5. That’s the standard definition of the term, but most traders who’re familiar with the idea generally focus on cheaper stocks. In this article, we look at some of the lowest-priced stocks in the market right now, some under $1.
Are Penny Stocks Worth It?
This is the first question most traders ask if they’re new to this niche. Are penny stocks worth it? That answer greatly depends on the traders themselves. One of the critical factors is knowing how to trade volatile stocks. If you understand how to weather the wild world of fast-moving stocks, they can be well worth the time it takes to learn. If you aren’t well-versed in such a strategy, then “trying your hand” can cost more than it’s worth.
Penny Stocks: The Risk & Reward
Like all things, penny stocks have risks and some immense risks involved at that. Since the prices are so low, tiny moves can equate to significant percentage changes. However, that also lends itself to favoring the risk side of the equation. For example, a stock that trades for $0.50 a share only needs to move up 10 cents to record a 20% change in portfolio value.
Certain companies also have lesser requirements, such as those trading “Over The Counter” or on the OTC. This can lead to a lack of specific disclosures that other, larger companies that trade on major exchanges are required to have.
That doesn’t mean all penny stocks only trade on the OTC. Plenty can be found on the Nasdaq and New York Stock Exchange. In this article, we look at a handful of cheap stocks to watch, all trading on major exchanges, that traders are focused on in the stock market this week.
We dive into recent developments, find any of the latest milestones, and search for upcoming events that could act as catalysts. Then you can decide if they’re penny stocks to watch or avoid entirely.
Penny Stocks To Watch
Red Cat Holdings Inc. (RCAT)
Shares of Red Cat Holdings exploded in the stock market today, with the RCAT stock price jumping above the $1.40 market for the second time in the last month. The military technology company has now entered the fold of Artificial Intelligence stocks.
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The latest headlines highlighted Red Cat’s new announcement that it completed the second phase of an AI and computer-vision partnership with Athena AI. The tie-up was first announced in March. George Matus, founder and CEO of Red Cat subsidiary Teal Drones explained, “The images and insights that Athena’s technology deliver are outstanding. Athena’s battle-tracking capabilities and artificial intelligence, combined with Teal’s best-in-class drone, give warfighters the unfair advantage.”
Red Cat will exhibit the Teal 2 at the June 27th-29th Modern Day Marine expo. Those with RCAT stock on their watch list may want to remember these dates.
BigBear AI Holdings (BBAI)
Another one of the AI stocks to watch on Tuesday was BigBear AI. The company designs ai-powered decision intelligence solutions focusing on logistics, cyber security, and autonomous systems. Its customers include the US Intelligence Community, the Department of Defense, and the US Federal Government, among others.
This month the company received an $8.5 million extension on the second phase of the U.S. Army as a prime contractor for its work on the Global Force Information Management system or GFIM. The solution is designed to help the Army address the objective of becoming more data-centric.
Company CEO Mandy Long was also featured in an interview on CNBC discussing how the Department of Defense and other national security programs are throwing money at AI technology and the role that it could play in a possible future conflict with China. This added exposure seems to have drawn more attention around the company as AI stocks remain hot.
TeraWulf Inc. (WULF)
Thanks to heightened interest in cryptocurrency and rising Bitcoin prices, sector stocks have gotten a boost. Thanks to Terawulf’s involvement within the space, that sentiment has carried over to WULF stock. It is a Bitcoin mining facility operator leveraging low-carbon energy production platforms. It aims to capitalize on the new “green” mining opportunity created thanks to a growing interest in environmentally friendly digital mining operations.
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Despite missing earnings estimates, the company’s stock has maintained higher levels this quarter than in Q1. Further, TeraWulf reported a sequential rise in Bitcoin production for May this month. “The increase in our hash rate this month, coupled with a temporary spike in transaction fees due to the emergence of Ordinals on the blockchain, more than offset May’s increase in network difficulty, enabling the Company to deliver a 35% month-over-month increase in bitcoin produced,” stated Kerri Langlais, Chief Strategy Officer of TeraWulf.
As BTC prices have acted as a boon to crypto stocks, it has also done the opposite in times of downturn. Keep this in mind if WULF stock and other Bitcoin/crypto-related penny stocks are on your watch list.
LumiraDx Limited (LMDX)
The point-of-care diagnostic company, LumiraDx, is making headlines this week. That has translated favorably to the LMDX stock price. Following the close of the regular market session, LumiraDx released its latest update.
The company received UK CTDA approval for a COVID Ultra and COVID & RSV tests. “With planning for the respiratory season already underway in some regions, we are delighted to have these tests commercially available for the NHS and other customers,” explains David Walton, LumiraDx’s Chief Commercial Officer. “By providing rapid, high sensitivity point of care tests for COVID, Flu, and RSV, we hope to reduce the burden of respiratory illness, facilitate optimized clinical workflows and improve patient outcomes.”
The company launched its platforms in the EU and other markets last May. Now LumiraDx expects to commence commercializing the platforms in the UK and begin commercial shipments.
List Of Penny Stocks
- Red Cat Holdings Inc. (NYSE: RCAT)
- BigBear AI Holdings (NYSE: BBAI)
- TeraWulf Inc. (NASDAQ: WULF)
- LumiraDx Limited (NASDAQ: LMDX)
