Are These Penny Stocks Under $1 On Your Watch List?
What is your definition of penny stocks? It isn’t a rhetorical question, but many people have their own idea of what these stocks “are,” per se. According to the Securities & Exchange Commission, penny stocks are stocks trading for less than $5. But, if you’re looking at popular opinion right now, you’ll see a different definition. Many retail traders will tell you to look at stocks to buy for under $1, literally pennies.
For me, it doesn’t matter your definition but more the opportunity to take advantage of low-priced stocks and leverage that to achieve handsome returns. Case in point, the highest-priced penny stock by definition is $5. That means a 50 cent move at that price is a nice 10% gain. However, when you’re talking “actually” penny stocks, a 50 cent move is 50% or more. It’s obviously important to understand that the downside can be just as drastic. But if you know how to handle risk and manage your position, then penny stocks could be right for you.
Penny Stocks To Buy For Under $1
The vast majority of penny stocks under $1 are found on the OTC exchange. This doesn’t mean there aren’t NYSE or Nasdaq stocks trading for 99 cents or less. But due to the requirements of those exchanges, companies need to maintain a share price of at least $1. If they slip below that threshold, they risk being delisted to a lower exchange (i.e., the OTC).
Brokers like Robinhood and Webull typically restrict access to OTC penny stocks. But that doesn’t mean you need a bespoke platform to trade them. Most major brokerage houses, including Fidelity, TD Ameritrade, and Etrade, offer access to the Over-The-Counter Exchange. In this article, we’ll look at a few penny stocks under $1 gaining ground recently. Will they be on your buy or avoid list heading into September?
Nasdaq Penny Stocks To Buy [or avoid]: Histogen Inc. (NASDAQ:HSTO)
Histogen has been range-bound for the last few months. Whether it was reaching highs of around $1 or lows around $0.70, this spread was attractive for day traders. With this volatility, day traders have followed the company closer recently. Not only is that likely based on the steady price increase lately, but also for what’s to come for Histogen.
The company specializes in restorative therapeutics. Its platform uses cell-conditioned media produced by hypoxia-induced multipotent cells. It then uses this to provide targeted treatments across a range of therapeutic indications. They include joint cartilage regeneration, spinal disk, tendon, and other soft tissue repairs. Why this month could be important for the company may have to do with what happens on the 13th.
This is when Histogen is set to present at the H.C.Wainwright Global Investment Conference. Richard Pascoe, President & CEO, will discuss the company in a morning session at the Conference. Some things that the market may be looking for detail on include Histogen’s current pipeline. In particular, recent findings from a Phase 1 study with Amerimmune LLC showed that its emricasan treatment in mild symptomatic COVID-19 patients demonstrated safety and tolerability during a 14 day dosing period.
“These additional findings further reinforce that emricasan can potentially be developed as a therapeutic treatment for mild to moderate COVID-19,” said Richard W. Pascoe, Histogen’s President, and Chief Executive Officer. “We, along with Amerimmune, are currently developing a Phase 2 clinical strategy for emricasan as a new therapeutic option for the treatment of COVID-19 in parallel with exploring partnering opportunities for its future development and commercialization.”
Considering the attention on virus treatment stocks, HSTO could be one to watch.
Sonnet Biotherapeutics Holdings (NASDAQ:SONN)
Another one of the biotech penny stocks under $1 to watch is Sonnet Biotherapeutics. The last month has been a wild one for SONN, with prices flying all over the map. At the end of the day, SONN stock is back below $1 following news of a multi-million dollar fundraising round just a few days after reporting progress on its SON-1010 and SON-080 low-dose IL-6 programs. The company said that Investigational New Drug applications were on track to be filed with the FDA before the end of the year. According to Sonnet, there is also an additional IND for SON-1210 to be submitted during the first half of 2022. This is always a big risk, especially when it comes to penny stocks. The higher prices open doors to raise money for these companies.
Needless to say, SONN stock is where it is right now. The company just reported successfully completing the discovery phase for its next preclinical pipeline candidate, SON-1410, for melanoma and renal cancers.
“Following our recently completed $30 million financing, we are excited to have identified this latest bispecific candidate, which is scheduled to enter the next stages of its development during the fourth quarter of 2021, with the objective of filing an IND in the second half of 2022. Our Scientific Advisory Board is very encouraged by these latest data and by the opportunity to further expand our work with IL-18 and IL-12, as we continue the buildout of our immuno-oncology pipeline.”
Pankaj Mohan, Ph.D., Sonnet founder and CEO
Despite the recent financing debacle in the stock market, management clearly sees it as a tool to progress its pipeline. Given that and recent market momentum, SONN stock could be on the radar.
NYSE Penny Stocks To Buy [or avoid]: Camber Energy Inc. (NYSE:CEI)
Camber is one of the low-priced energy penny stocks we’ve followed over the last month. It took a tumble in July as energy prices pulled back. But in tandem with the underlying commodity prices, CEI stock has reversed course in August and September.
The Houston-based company has built a strong foothold in the industry through its majority-owned subsidiary, Viking Energy Group. It has interests in oil and natural gas assets across Texas, Louisiana, and Mississippi. Camber has over 145 active conventional oil & gas wells, along with several development prospects.
Aside from bullish retail sentiment, something else helping drive momentum in CEI stock is the recent performance figures reported last month. Camber’s Viking subsidiary reported Q2 results demonstrating consistent growth compared to prior years’ Q2 results. The company also secured exclusive IP with ESG Clean Energy that will help it enhance its commitment to carbon neutrality. In particular, this deal gives Camber access to ESG’s patent rights and know-how concerning stationary electric power generation.
Basically, ESG’s platform is designed to generate clean energy from the heat generated from combustion engines and use the “waste heat” to capture all of the carbon dioxides that come from the engines. The deal also came just a few weeks after Camber acquired a majority interest in Simson Maxwell, a company that manufactures industrial engines and power generation supplies. Based on this, CEI stock could be one to watch in September.
OTC Penny Stocks To Buy [or avoid]: Sears Holdings Corporation (OTC:SHLDQ)
The beaten-down department store Sears Holdings is in bankruptcy. As such, there are other fundamental factors to consider that may or may not play a role in its stock. We’ve seen companies like Hertz come out of bankruptcy, albeit after a tumultuous period of trading in the market. Needless to say, SHLDQ stock has broken out during the first week of September. Speculation arose thanks to chatter about Sears, GameStop, an Amazon conspiracy, a proposed buyout from 2019, and a whole slew of theories on the stock that I’ll let you dive deeper into for the sake of time in this market brief.
The long and short of this is Sears hasn’t put out a formal filing since 2020. Fast-forward to this year, and Sears is still in bankruptcy, nor has the company released any new updates. Whether or not it amounts to a fundamental “phoenix rising from the ashes” like GameStop is to be seen. It wouldn’t be the first time a beaten-down stock, counted out by Wall Street, completely pulls a 180. But a lot of that will come down to what the company does next.
Outside of the speculative side of things, keep in mind some new things coming down the pipe from the SEC. The Commission updated Exchange Act Rule 15c2-11, which becomes effective on September 28, 2021. These regulatory changes prohibit certain broker-dealers from displaying quotes for securities whose issuer has not met public reporting requirements. In particular, on the SEC’s site, a passage from August states:
“We expect that broker-dealers will no longer be able to publish proprietary quotations for the securities of any issuer for which there is no current and publicly available information, unless an existing exception to Rule 15c2-11 applies,” but also expresses, “The Commission has neither approved nor disapproved its content. This statement, like all staff statements, has no legal force or effect: it does not alter or amend applicable law, and it creates no new or additional obligations for any person.”
Humbl Inc. (OTC:HMBL)
While Humbl isn’t in the same situation as SHLDQ, it has been relatively quiet for the last few months. Trading in a tight range, HMBL stock has one thing going for it, which is that it’s an OTC penny stock. So, in essence, remaining under $1 for this long doesn’t necessarily have the same repercussions as if it were a Nasdaq or NYSE stock.
As we know, financial technology or FinTech stocks have grown in popularity. Humbl falls into this niche with its numerous platforms that include mobile payments, ticketing, digital assets, and even NFTs, all on a blockchain.
With the “reopening trade” becoming prevalent, events are becoming to gain attention. Humbl’s recent update on corporate ticket solutions has sparked some interest in the market. In particular, this deal sees Humbl enter an agreement with Ticket Evolution and provide fans with lower-cost premium seating. Whether it’s pro sports, college, concerts, theatres, or festivals, the HUMBL Tickets platform aims to deliver.
“We appreciate the opportunity to work with a proven B2B market leader like Ticket Evolution, their customized programs integrate perfectly with HUMBL Tickets and our desire to provide authenticated ticket inventory, lower costs, and high-quality customer service in a secondary ticketing market that needs technological disruption,” said Brian Foote, CEO of HUMBL. So with reopening as a focus, HMBL stock could be one some traders have on their watch list right now.
Are Penny Stocks Worth It?
This is an answer only you can come up with for yourself. Penny stocks are very high risk. But if you know how to handle volatility and know your risk tolerance, the reward can surpass all other negatives. The important thing is to understand what’s behind a stock’s move and know how to handle that in the market properly.