Are you looking for the best penny stocks to buy now? There are plenty to choose from, and how you approach the stock market today will help determine your strategy. Are you looking for stocks to day trade? Maybe you are more of a swing trader looking to ride out a trade based on a more consistent trend. On the other hand, you might be looking to buy penny stocks to invest in for the long term.

While it may not be a popular strategy for mainstream investors, small companies have hit it big over the last few years. So how do you get started? Given specific strategies, are there ways to find the best penny stocks to buy? The short answer is yes, but it takes time, patience, and a keen eye for spotting potential.

What are Penny Stocks?

Penny stocks are shares of small companies that trade for less than $5 per share. While they might not seem like much on an individual basis, their potential for massive returns is what makes them attractive to many investors.

How to Buy Penny Stocks

Investing in penny stocks isn’t fundamentally different from investing in large-cap stocks. You’ll need a brokerage account, some startup capital, and a solid understanding of the market dynamics. Online brokerages are often the easiest way to buy penny stocks because they offer access to various exchanges and make it easy to buy and sell shares. Research each brokerage’s fees and services before deciding which to use.

Once your account is set up, the process is simple: search for the penny stock you want, select the number of shares to buy and place your order. It’s advisable to use limit orders instead of market orders when purchasing penny stocks to better control your price.

Creating a Penny Stocks Watchlist

Before diving headlong into penny stock investing, developing a watchlist—a list of potential investment targets that warrant further examination is crucial. Start by researching industries you’re familiar with or interested in. The more knowledge you have about an industry, the better you can understand and predict its trends.

Consider the company’s fundamentals. Are they making profits or at least showing a consistent trend toward profitability? Do they have a sustainable business model? Is the management team experienced and reliable?

Also, track the volume of shares traded. A higher trading volume suggests more liquidity, essential for entering and exiting positions without adversely impacting the stock price. This article looks at a handful of hot penny stocks today. We’ll dive into recent catalysts and discuss any upcoming events that may be worth noting. Then you can decide if they deserve a spot on your list of penny stocks to watch.

Penny Stocks To Watch

Opendoor Technologies (OPEN)

best penny stocks to buy penny stocks to watch Opendoor OPEN stock

Residential real estate eCommerce company Opendoor continued trading higher as the penny stock maintained its recent uptrend. The latest move began late last week after profit-taking from reaching new 2023 highs. One of the more recent catalysts came after it reported first-quarter earnings results. It also helped bring some optimism to the beaten-down stock.

Opendoor beat earnings per share and sales estimates during a topsy-turvy period in the real estate market. “Our Q1 results demonstrate our progress in navigating the housing market transition against an uncertain macro backdrop. We exceeded our sell-through expectations for our longest-held homes and continued to build a new book of inventory with strong margin performance. We also took further actions to right-size our cost structure,” explained CEO Carrie Wheeler.

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Opendoor also gave 2023 guidance. It expects revenue to come in between $1.75 and $1.85 billion. The 2023 Adjusted EBITDA is anticipated to be between $(180) million to $(200) million. There’s also attention being placed on OPEN stock’s short interest. According to the data from TD Ameritrade, the penny stock’s short float percentage sits at around 13.38%. Meanwhile, analysts at Morgan Stanley picked up coverage on Opendoor this week with an Equal-Weight rating and a $4.25 price target.

Dragonfly Energy Holdings Corp (DFLI)

Dragonfly Energy has been one of the hottest penny stocks to watch for a few weeks. The penny stock traded some of its highest single-day trading volumes of the year during this time. Its recent move came after Dragonfly announced an expanded partnership with nuCamp RV to fully integrate power systems supplied by Dragonfly’s Battle Born Batteries. With a float of under 10 million shares, DFLI stock has gained momentum with this micro-trend in low-float penny stocks.

Dragonfly has continued raising eyebrows with more news. The company announced that it would be granted a U.S. patent for a battery pack assembly design for custom installation. According to Dragonfly, the patent covers the look and design of the assembly case of its GC3 12V 270Ah LiFePO4 deep-cycle battery.

Last week the company received another patent for its deep-cycle battery design. It also said in an interview that it completed its US lithium battery cell pilot line and has begun using it to support large-scale production. This week, momentum from the news continues with headlines about the company joining the Nevada Battery Coalition as a founding member.

What do analysts think about DFLI stock? Chardan currently has a Buy rating on the penny stock. The firm also slapped on a $10 price target, which puts its forecast price 301% higher than where DFLI stock closed on Friday.

Heron Therapeutics Inc. (HRTX)

best biotech stocks to watch Heron Therapeutics HRTX stock

Ask traders about Heron Therapeutics in May; they likely told you some horror stories. That’s likely because HRTX stock imploded after reporting a mixed first quarter.

“We continued to make steady progress in the first quarter of 2023 at Heron, highlighted by the approval and launch of our fourth commercial product, APONVIE. We are pleased with the steady growth in the oncology care franchise and remain encouraged by the market potential for ZYNRELEF and APONVIE,” said Craig Collard, new Chief Executive Officer of Heron. “Looking ahead, we are focused on reducing our cash burn and advancing a streamlined organization that we believe will begin to show significant growth while also continuing to improve patient’s lives.”

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Fast-forward to July, and HRTX stock is trading significantly higher than where it was during the second half of May 2023. A management shake-up over the last few months and this week’s funding news have helped bring momentum back to the penny stock. After reviewing its operations and practices, Heron also announced a cost reduction and restructuring plan. In particular, management stated, “A portion of the expected cash savings will come from reduced external spend, including completed renegotiation and right-sizing of key vendor contracts, which is expected to result in over $31 million in cash savings through 2025.”

Against this backdrop, HRTX stock is on the list of penny stocks to watch for traders this week.

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