Picture this: you’re holding a golden ticket that could multiply your modest investment into a colossal windfall—almost overnight. It sounds like a fairytale, right? Well, this is the dream that traders assume that penny stocks promise, making us ask ourselves, “Are penny stocks worth it?”
Let’s break this down. Penny stocks, typically those stocks that trade for less than $5, come with a prospect of massive returns. They’re like the “budget bin finds” that might not seem like much at first glance but can sometimes yield surprisingly valuable opportunities.
You’ve probably heard stories of investors who, with a lucky break, stumbled upon penny stocks that skyrocketed beyond all expectations. Like finding a diamond in the rough, these success stories of cheap stocks can feel like hitting the jackpot. When you hear stories like these, it’s hard not to ask yourself: “Are penny stocks worth it?”
Penny Stocks: Don’t Forget The Risks Involved
But let’s not forget the flip side. For every rags-to-riches tale, there’s a heartbreaking story of a hopeful investor who lost their investment just as quickly. These low-priced stocks can be unpredictable, testing the nerves of even the most seasoned investors.
So, how does one navigate this wild ride? Are there any reliable tactics to uncover those elusive “penny stocks to buy” that could soar? Or are we better off steering clear from penny stocks altogether, labeling them as a risky bet?
Whether you’re on a treasure hunt for the next breakout stock, or a more cautious investor trying to decode these low-priced stocks, you’ve got options. Cracking the stock market can feel like trying to solve a Rubik’s Cube. Cheap stocks are usually not listed on major exchanges, which means less regulation in some circumstances. Of course, this doesn’t mean there aren’t penny stocks trading on major exchanges like the NYSE and NASDAQ.
As we dive deeper into this, we’ll highlight how industry trends can give us important clues. Sometimes, the secret to finding promising “penny stocks to buy” is all about keeping an eye on broader industry trends and identifying which sectors are ready to take off.
Penny Stocks To Watch
You’re not alone if you’ve found yourself scratching your head, wondering, “Are penny stocks worth it?” or tirelessly sifting through countless financial analyses for penny stocks to buy. It’s a question that has puzzled many an investor, from the greenest rookies to the seasoned pros.
This article will dissect several catalysts moving some of the most active penny stocks today. We’ll delve into what has made these stocks tick. Armed with timely analysis, the proper knowledge, and a sprinkle of caution, you can decide if they’re ones to add to your list of penny stocks to watch this week.
Ginkgo Bioworks (DNA)
Last month Ginkgo reported earnings, missing on earnings per share but beating sales expectations. “In the 15 years since my co-founders and I launched Ginkgo, I have never been more optimistic than I am today,” said Jason Kelly, co-founder and CEO of Ginkgo. “There is no doubt that we are going to be living in a challenging market environment for a while, but Ginkgo was built for these moments – we have worked hard to give ourselves a margin of safety so that we can relentlessly focus on our mission to make biology easier to engineer.”
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This sparked the initial uptrend in DNA stock that has lasted the past month or so. However, some profit-taking since the middle of June put a damper on the move. Things have returned to their bullishness this week after Ginkgo and Voodoo Scientific announced a collaboration to advance the production of “Smooth” spirits. According to the company, this will enable distillers to produce ultra-premium spirit products.
“Engineering this class of enzyme to operate under the unique conditions required for distilled alcoholic beverages is a great application for Ginkgo Enzyme Services,” said Jennifer Wipf, SVP, Head of Commercial Cell Engineering at Ginkgo. “Improving the functionality of enzymes underpinning critical production processes – making enzymes work better – is an area we’re passionate about because it opens up real business opportunities for our customers, especially as they push into new product development.”
Nextdoor Holdings Inc. (KIND)
Nextdoor stock has climbed from lows below $2 to fresh 2023 highs of more than $3.20 as of this week. The company is a social network technology provider of sorts. Nextdoor offers communities and neighborhoods a way to connect and share information.
Earlier in June, Nextdoor announced that it would be pushing ahead with the growth of its local advertising platform. Nexdoor’s Ad Manager is designed as a self-service option for advertisers. Simultaneously, the company also announced a global partnership with digital out-of-home business, DIVE Billboards, to launch “Nextdoor Outdoor.”
In a June PR, Heidi Andersen, Chief Revenue Officer at Nextdoor, explained, “We recognize the unique needs of mid-market and SMBs in reaching their local customer base. With Nextdoor Ads Manager, we’re able to provide an accessible and efficient advertising platform that allows businesses to connect with their communities on a personal and meaningful level. In addition, our partnerships with industry heavy-weights like IAS and Oracle Advertising help ensure high-value, optimal ad experiences on the platform.”
Wells Fargo analysts soon followed with initiating coverage of the company. The firm set an Equal-Weight rating and a price target of $3.50. With KIND stock nearing this level, will the penny stock “top out,” or will it surpass analysts’ expectations?
Lilium (LILM)
Have you ever heard of sympathy trading? This involves trading stocks with companies that have similarities with other companies that have already made a significant move in the stock market. Shares of Lilim climbed on Wednesday, which continued a multi-weeactivityve following a drop to fresh 52-week lows at the start of May. The electric vertical take-off and landing (eVTOL) jet maker announced a financing round for up to $250 million it plans to deploy toward its Lilium Jet development.
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Company CEO Klaus Roewe explained, “The capital raise announced today marks an important development in our ongoing mission to revolutionize the aviation industry. With this financing, we are excited to continue our development program at full pace. We remain in multiple constructive discussions with existing and potential new investors. We hope to announce further updates soon.”
Over the last few weeks, Lilium has reported on multiple milestones. These included a flight simulator and training agreement with FlightSafety International. Lilium also entered a powered test campaign at Europe’s largest wind tunnel facility to begin testing. Something else that may have also caught investors’ attention is upcoming earnings. In addition, the FAA issued a G-1 Certification Basis, which was necessary for the type certificate validation of Lilium’s Jet. But it wasn’t the only catalyst at play this week.
Shares of a former EVTOL penny stock we’ve discussed, Joby Aviation (NYSE: JOBY), exploded. The company announced its production launch and receipt of a permit to fly its first aircraft built on its production line. This gave hope to the market and investors hunting for stocks within this sector. LILM stock has been one of the beneficiaries.
List Of Penny Stocks
- Ginkgo Bioworks (NYSE: DNA)
- Nextdoor Holdings Inc. (NYSE: KIND)
- Lilium (NASDAQ: LILM)
