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Best Penny Stocks To Buy Now? 4 Under $5 To Watch

Are these the best penny stocks to buy now?

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If you’re trying to find the best penny stocks to buy now, you’re not alone. There are plenty of reasons that support trading in these cheap stocks. They move quickly; the moves can be small yet equate to significant percentage changes; they also present opportunities to see early-stage companies before they hit it big.

Another attribute is that they tend to move on their own accord, disconnected from broader market trends. In cases like yesterday, where the stock market was down, there were plenty of penny stocks trading near 2023 highs. A mix of sentiment-fueled trading and speculation mixed with a few fundamentals can equate to high-volatility trading opportunities.

What Are Penny Stocks?

Penny stocks are shares of companies trading for less than $5 per share. While some may argue the point, for the purposes of this article, we’ll stick with that basic definition. Furthermore, there’s a general misconception that all penny stocks are only traded over The Counter or on the “OTC” market. That’s simply untrue.

There are plenty of penny stocks traded on the major exchanges, including the NASDAQ and NYSE. This makes it possible for anyone using popular mobile trading platforms like Robinhood to access cheap stocks to buy.

Finding The Best Penny Stocks To Buy Now

So how do traders find the best penny stocks to buy now? Assuming you understand the basics of trading, the best place to begin is with a list of penny stocks to watch. This entails identifying a trend you feel comfortable with and putting together a watch list of penny stocks that fit the trend. It could be something as simple as unusually high trading volumes or companies releasing news.

It could also be something a bit more specific, like penny stocks with insider trading or high marks from analysts. No matter the case, understand the potential and know the risks involved. These cheap penny stocks may be able to rise significantly higher in short periods, but they can also fall just as quickly.

In this article, we look at some of the most active penny stocks today, see what’s moving them, and try to find any upcoming or additional milestones that could be notable. Then you can decide if they’re worth adding to your penny stocks watch list this week.

Penny Stocks To Watch

  1. Ardelyx Inc. (NASDAQ: ARDX)
  2. Opendoor Technologies Inc. (NASDAQ: OPEN)
  3. Vroom Inc. (NASDAQ: VRM)
  4. Virgin Galactic Holdings Inc. (NYSE: SPCE)

Ardelyx Inc. (ARDX)

Ardelyx was discussed this week in the article “Penny Stocks To Buy Now? 3 With Ratings Up To 1,742%,” along with a few other popular penny stocks with bullish outlooks from analysts. Today ARDX stock continued grabbing attention.

Last month, Ardelyx reported that its Tenapanor new drug application to treat hyperphosphatemia was accepted for review in China. “The NDA acceptance for tenapanor for hyperphosphatemia in China marks a significant step forward in Ardelyx’s commitment to bringing our novel therapies to patients with unmet medical needs and our desire to expand internationally alongside best-in-class partners who complement our capabilities and share our mission,” said CEO Mike Raab.

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This month Ardelyx reported its latest financial results and provided net sales revenue guidance for its IBSRELA product. The company beat earnings and sales estimates for the quarter and expects full-year 2023 net product revenue for IBSRELA to be between $72.0 and $77.0 million.

Despite the pullback from highs in April, analysts at Ladenburg Thalmann gave an update to their outlook this week. The firm maintains a Buy rating on the penny stock. It also raised its $7.50 price target to $8.50.

Opendoor Technologies (OPEN)

Residential real estate eCommerce company Opendoor continued trading higher as the penny stock maintained its recent uptrend. The latest move began at the beginning of the week after profit-taking from reaching new 2023 highs in addition to earnings results.

Opendoor outpaced its 2022 Q2 earnings per share and topped sales estimates during a topsy-turvy period in the real estate market. However, some downtrodden Q3 revenue guidance weighed heavier on the penny stock.

“We expect the third quarter to mark our return to positive contribution margin levels. As of quarter end, 99% of the homes we made offers on between March and June of last year were sold or under resale contract, and our new book of inventory is generating positive unit economics in what continues to be an uncertain time in the U.S. housing market,” said Carrie Wheeler, CEO of Opendoor.

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 12.11%. Meanwhile, analysts at Credit Suisse updated their coverage on Opendoor this week with an Outperform rating and a $7 price target.

Vroom Inc. (VRM)

Thanks to a surge in price in Carvana (NYSE: CVNA), the sympathy sentiment in online car retail stocks has picked up in the stock market today. Vroom offers an eCommerce platform for buying an selling used vehicles. In its latest quarterly update, the company posted another miss on sales by a wider margin.

Tom Shortt, CEO of Vroom, said, “In the second quarter of 2023, consistent with our Long-Term Roadmap, we continued to make progress on our three key objectives and four strategic initiatives, improving Adjusted EBITDA by $8.5 million sequentially. Ecommerce GPPU increased from $2,552 in Q1 2023 to $2,954 in Q2 2023, benefiting from GPPU on unaged units, which exceeded $5,000, as well as vehicle inventory reserves taken in prior periods. During the second quarter of 2023, 80% of our units sold were aged units, or units held greater than 180 days…Looking forward to Q3 2023, we expect <40% of our mix to be aged units. We expect to deliver sequential Adjusted EBITDA improvements through the balance of the year.”

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This brought a significant level of selling pressure into VRM stock. But now that it seems the dust may have settled and the bleeding has ceased, VRM stock managed to bounce more than 10% on Thursday.

Virgin Galactic Holdings (SPCE)

One of the more active names on the list of penny stocks to watch over the last few months has been Virgin Galactic. Last quarter the company announced the commencement of commercial spaceflight service, Galactic 01.

There will be a second spaceflight, Galactic 02, that will take to the skies this month. This first mission is designed as a research mission hosting members of the Italian Air Force as well as the National Research Council of Italy. They will conduct microgravity research while on spaceflight.

Virgin Galactic also gave an update on that second planned flight. The new flight window for the ‘Galactic 02’ mission will open on August 10th. This mission will be Virgin Galactic’s seventh spaceflight, second commercial spaceflight, and third spaceflight this year.

It will include 3 passengers who will travel to space. But don’t forget; earnings season is in full swing. So if SPCE stock is on your penny stocks to watch list, August 1st is the date to keep in mind.

The company reported second-quarter results on Aug. 1st. Sales came in at about $2 million and expects sales of roughly $1 million in both Q3 and Q4. With this backdrop, SPCE stock has found itself on a few watch lists this week.

By J. Samuel

As a trader and expert finance writer, I enjoy finding new and emerging trends that may have been overlooked by the average masses. If there's one thing that a trader or investor wants to know, it's how to use valuable data to their advantage. My expertise is in uncovering this data and compiling it into actionable information. As a professional finance writer, I've contributed to many of the top finance platforms and pride myself on researching factual, publicly available information and using that in all of my articles.

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