As the saying goes with penny stocks: just because they’re low-priced doesn’t mean they’re “cheap”. This is a distinction new traders won’t understand until they find penny stocks to buy under $1 and wonder why “they won’t go up” quickly. There’s a lot more going on with these companies than just a lower share price.
Share structure and fundamental strength also play big roles with the overall value of penny stocks. You’ve also got to weigh time value when it comes to trading. What I mean by that is what is your timeframe? The bottom line is fundamentals tend to mean less if you’re looking to take advantage of a short-term move in price. Are you trading or investing in penny stocks?
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No matter the case, it comes down to percentage points. If you’ve got stocks under $2 that move $0.20 to $0.40 quickly, it’s a better situation than a $0.15 stock that moves less than $0.005 per day. Everything’s relative but by no means does price depict overall value or profit potential.Penny Stocks: Investing Or Trading?
Now, given this, is there a higher chance of larger percentage moves with lower-price stocks? Overall, I would say yes. It isn’t unlikely for a 20 cent stock to move 2-4 pennies, equating to a 10-20% move. If you are looking at investing in penny stocks or holding them for more than a few days, fundamentals tend to play a bigger role.
Part of that might have to do with analyst opinions. Are they bullish or bearish and why? If anything, analyst reports can give you some of the hot button items to pay attention to and dive deeper into.
Are they the final say on whether to avoid or buy penny stocks? In my opinion, no but again it will give you a starting point to understand what some analysts are looking at. Here’s a list of stocks that can be bought for under $3 right now. Just because they’re “cheap,” are they penny stocks to buy right now? You decide.Penny Stocks To Buy Under $3: BIO-key International Inc.
BIO-key International Inc. (BKYI Stock Report) has been waiting for a month like this. Has it been one of the “long-term holds”? Probably not but look at the BKYI stock chart from this year. You’ll see it’s had its share of big moves daily or over a few days before pulling back.
July saw the penny stock jump to highs of $1.71, then abruptly pull back to lows of around $0.60 just a few days later. However, since the beginning of August, BKYI stock has steadily made its way back. The period between July 21 and August 10th, shares climbed by around 43% and Monday saw its biggest one-day spike in weeks.
BKYI stock jumped over 10% during the session. This came just a few days after the company announced that Clearent, LLC selected BIO-key’s PortalGuard IAM solution to secure customer self-enrollment, account recovery and online access to its banking applications.
Clearent is a credit card processing company, processing $14 billion in annual transaction volume according to the company. It also has 45,000 plus merchants nationwide. What’s more, BIO-key also reports earnings this week. August 14th is the date and the company set up a time for a corporate call during market hours as well.
Right now the average consensus among analysts has BIO-key as a “Hold“. Maxim is the most recent firm to issue a rating on the penny stock. In light of the upcoming earnings, do you think BKYI is one of the penny stocks to buy or avoid for now? Comment belowPenny Stocks To Buy Under $3: Aeterna Zentaris Inc.
Aeterna Zentaris Inc. (AEZS Stock Report) has been on our list of penny stocks since the early days of Q2 2020. Back at the end of June, the company had just gotten slammed in the stock market. Shares dropped from over $1.20 to under $0.40. Over the weekend we talked about this as one of the penny stocks to watch this week. Specifically, we noted what the company discussed in last week’s earnings update.
During the quarter, the company reported positive results from its AEZS-130-P01. This confirmed a dosing regimen of macimorelin as a potential diagnostic for childhood-onset growth hormone deficiency. The company also entered into an exclusive distribution and related quality agreement with Israel-based Megapharm Ltd. for the commercialization of macimorelin in Israel and the Palestinian Authority.
Another thing I feel like we discuss is looking for potential upcoming catalysts. Biotech companies are well-known for pre-announcing milestone dates. In this case, Aeterna’s abstract on study results of its first pediatric study on macimorelin was selected for presentation at the 22nd European Congress of Endocrinology. It’s being held from September 5-9. Where do analysts sit with AEZS? The general consensus is a “Strong Buy” with the most recent rating coming from H.C. Wainwright.Penny Stocks To Buy Under $3: HTG Molecular Diagnostics Inc.
Another one of the penny stocks we’ve followed recently is HTG Molecular Diagnostics Inc. (HTGM Stock Report). Since late-March HTG Molecular has been on the watch list. The company was gaining attention in sympathy with coronavirus stocks earlier this year. HTG investigated the host immune response to SARS-CoV-2 and found it could facilitate the treatment of COVID-19.
The company specifically conducts molecular profiling. Its proprietary HTG EdgeSeq technology automates complex, highly multiplexed molecular profiling from solid and liquid samples. Customers use the technology to identify biomarkers important for precision medicine, to understand the clinical relevance of these discoveries, and ultimately to identify treatment options.
This week, the company released more news, unrelated to COVID. HTG signed a 10-year Commercialization and Distribution Agreement with QIAGEN Manchester Limited. It’s a wholly-owned subsidiary of QIAGEN N.V. (QGEN Stock Report).
John Lubniewski, President and Chief Executive Officer, added, “This new agreement preserves the original value we saw when we initially collaborated with QIAGEN in 2016; HTG EdgeSeq technology, leveraging either an Illumina or Thermo Fisher Scientific sequencer, with global commercialization and distribution options offered by QIAGEN, one of the largest molecular diagnostic companies in the industry.”
Right now analysts the analyst consensus on this penny stock is a “Strong Buy“. Similar to AEZS, H.C. Wainwright issued the most recent rating.Penny Stocks To Buy Under $3: Oxbridge Re Holdings
The market for Oxbridge Re Holdings (OXBR Stock Report) is similar to BKYI. Over the last year, the general trend is relatively flat. However, OXBR stock has experienced a few big days and week-long rallies. Its 200-Day and 50-Day Moving Averages is where the reinsurance company stock tends to gravitate back to. This year, however, there may be a more evident “long-term” trend to look at. Since late-March, the penny stock saw a slow and steady increase in price. Taking out the few big, one-day spikes in June, the trend is still relatively clear. OXBR stock has climbed from around $0.80 to recent levels around $1.10.
This week started off on a rough note with a sell-off on Monday. However, it was one of the highest trading volume days that stock had seen this quarter. The speculation behind its upcoming earnings had traders very active on August 10th. As we know, earnings dates present a high-risk, high-reward situation. Bad earnings equate to high likelihood that stocks sell off. Good earnings generally equate to the opposite. Is it always that way, no.
In the case of Oxbridge, the sell-off during market hours wasn’t indicative of the company’s upcoming results. After the market closed on August 10th, the company reported increased results over last year. Net income came in at a “modest” $165k but compared to a loss of $205k last year, it’s notable.
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This boiled down to an EPS gain of $0.03 compared to an EPS loss of $0.04 last year. Furthermore, sales came in at $482k compared to just $109k last year. While there aren’t recent analyst ratings on OXBR, shares have certainly surged during aftermarket trading on Monday. Will this continue throughout the month?Penny Stocks To Buy Under $3: Clearside Biomedical
Clearside Biomedical Inc. (CLSD Stock Report) reported two key updates this week. One of them was its earnings results, which we’ll get into a bit more. The other was announcing that the U.S. FDA has accepted its Investigational New Drug application for CLS-AX. It enables the initiation of a Phase 1/2a clinical trial of CLS-AX in neovascular age-related macular degeneration patients by the end of 2020.
When it comes to operating results, Clearside realized better figures for both EPS and Sales compared to last year. In Q2, EPS came in at ($0.13) up from ($0.15). Sales reached $354K up considerably from last year. Commenting on today’s developments, George Lasezkay, Pharm.D., J.D., President and Chief Executive Officer, seemed optimistic.
“Our IND application for CLS-AX was accepted and we are preparing to initiate a Phase 1/2a trial in wet AMD later this year to assess the safety and tolerability of our proprietary suspension of axitinib delivered via our SCS Microinjector. We also continue to expand our internal suprachoroidal pipeline with two new preclinical programs: a ‘therapeutic biofactory’ program which is our second, non-viral vector, suprachoroidal gene therapy preclinical program; and a small molecule preclinical program utilizing a suprachoroidal integrin inhibitor suspension.”
When it comes to analysts, the general consensus is “Moderate Buy”. Ratings vary between “Buy, Hold, and Market Perform“. The most recent rating came from Wedbush in June, which also issued a $6 price target on that stock.