Finding the Best Penny Stocks to Buy
Penny stocks, defined as stocks that trade for less than $5 per share, can be appealing to investors due to their low prices and potential for large percentage gains. However, penny stocks also carry more risk than regular stocks. Doing thorough research is key to finding the trading opportunities. Here are the main steps for finding penny stocks worth investing in:
Analyze trading volume. Look at the average daily trading volume over the past 3 months rather than just one day’s volume which could be an anomaly. Higher trading volume indicates more liquidity and investor interest. Be wary of thinly traded penny stocks that could be difficult to exit.
Screen for catalysts. Search for penny stocks that have upcoming catalysts like FDA approvals, clinical trial data releases, new product launches, or other news that could boost the stock. Timely trading around catalysts can lead to quick gains with penny stocks.
Best Penny Stocks To Buy Now? 3 To Watch Before 2024
Evaluate company financials. Dig into financial statements, earnings reports, and press releases to understand the company’s financial health and growth prospects. Many penny stocks lack sound fundamentals or profits, so focus on finds with a path to profitability.
Research management and insiders. Learn about the executives and board members running the company. Reputable leadership with skin in the game through insider stock ownership can give further confidence in a penny stock.
Finding Top Penny Stock Picks
Use screening tools. Screening tools and penny stock scanner software can streamline finding cheap stocks that meet specific criteria like price, volume, percentage gains and more. Scanners help surface opportunities out of the thousands of low priced stocks.
Start small. When investing in the inherently riskier penny stock space, position size is critical. Start with small amounts to limit the downside. As conviction in top penny stock picks grows over time, position sizes can increase accordingly.
Have patience. While some penny stocks deliver quick spikes, it’s also important to have patience for longer-term price appreciation in fundamentally sound penny stocks. Avoid panic selling on temporary dips.
Trading Risk vs Reward
Use limit orders. Market orders should always be avoided with penny stocks, only use limit orders. Limit orders guarantee the price at which buys and sells execute, preventing overpaying or underselling.
Making a Long Term Penny Stocks Portfolio, 3 Tips
Have a plan. Establish clear loss limits and selling targets for penny stock positions, rather than riding them indefinitely. Having a trading plan leads to less emotional decision making if a low-priced stock moves against you.
Penny stocks carry substantial risk, but also can provide tokenized opportunities not found in regular stocks. By thoroughly analyzing penny stocks using the checklist above, traders can mitigate some key risks and find the biggest potential winners. Staying disciplined and sticking to a smart trading plan then allows investors to capitalize on this volatile market segment while limiting their downside.
Penny Stocks To Watch Before 2024
Tellurian Inc. (NYSEAMERICAN: TELL)
The Houston-based company is engaged in natural gas business. They focus on LNG marketing, trading, and infrastructure development, including an LNG export facility and pipeline. The latest move in TELL stock comes on the heels of a management shakeup.
Tellurian announced leadership changes following Martin J. Houston’s appointment as Chairman. Daniel Belhumeur, former General Counsel, is now President. Meredith Mouer, former Deputy General Counsel, is the new General Counsel and Chief Compliance Officer. CEO Octávio Simões emphasized these changes align with strategic initiatives, including developing Driftwood LNG and improving the balance sheet.
Obviously, leadership changes can impact investor perceptions. The appointments may signal a strategic realignment, potentially attracting investor interest. However, any tangible impact on operations or financial performance remains to be seen. While they could positively impact the company’s direction, the actual effects on performance will depend on the new leaders’ effectiveness in executing strategic goals.
SenesTech, Inc. (NASDAQ: SNES)
SenesTech, specializes in animal pest population control through fertility management. Their notable products include ContraPest, a U.S. EPA-registered contraceptive for rats, and Evolve, another rat contraceptive.
Shares have slowly been moving higher after the penny stock swiftly dropped below $1 earlier this quarter. Several catalysts have been pushing optimism and could be a source of speculation. For instance, SenesTech announced an exclusive distribution agreement with Fruit Tree Limited, a Hong Kong-based pest control company. The deal includes an initial order and annual minimums for Evolve™ Soft Bait.
Fruit Tree Ltd. is recognized in the pest control industry, offering products and services regionally. This partnership aligns with Fruit Tree’s commitment to quality, innovation, and sustainability. Director Francisco Pazos Alvarino mentioned potential expansion to Mainland China and the alignment of Evolve with their environmental safety goals. He also noted discussions with regulatory bodies about testing Evolve in government venues, especially in wet markets with significant pest infestations.
The potential expansion into Mainland China opens a new market. However, risks include regulatory hurdles in new markets and the effectiveness of Evolve in diverse environments. So if SNES stock is on your watch list, keep that in mind.
Virax Biolabs Group Limited (NASDAQ: VRAX)
Virax Biolabs is an innovative biotechnology company. They focus on detecting immune responses and diagnosing viral diseases. Virax Biolabs distributes diagnostic test kits and develops T-cell based technologies for immune profiling, useful in diagnosing and treating conditions like Long COVID, chronic inflammation, and various post-viral syndromes.
News has been a focus after Virax reported a strategic collaboration with the University of Manchester and the Northern Care Alliance Foundation Trust. This partnership aims to utilize ViraxImmune IVD platform in the ImRESP study to enhance understanding of T-Cell immune responses in COVID patients.
The study evaluates memory T-cell driven immunity in respiratory disease patients, including those with Long COVID. The longitudinal assessment of samples will identify specific T-cell profiles associated with these conditions. This research collaboration is expected to generate data aiding in the development of Virax’s In Vitro Diagnostic (IVD) test for Long COVID, focusing on early detection and treatment management.
In a recent CEO update, James Foster explained, “Our current ongoing collaborations with key research institutions will allow us to complete the development and performance studies of our Fluorospot assays. These collaborations will allow us to study clinical samples within the areas of interest to help refine our technology and establish its clinical validity…In 2024 we also expect to present key findings at major global scientific conferences as well as interact with regulatory bodies later in the year to help define the regulatory pathway to IVD approval.”
This has also come into focus in recent sessions.
