Penny Stocks To Buy For Under $5; Are They Worth The Risk?
There are so many traders in the stock market today searching for top penny stocks to buy. These high-risk assets have been a source for some of the biggest winning trades over the last few years. I’m not only talking about the one and 2-day moves that these cheap stocks can make.
I’m also referencing companies that go on to build sound businesses from the ground up. Just look at some of the original meme stocks or companies developing vaccines early on during the 2020 pandemic. Many of these former penny stocks have gone on to climb hundreds or even thousands of percentage points over time.
What are penny stocks? By definition, we’re talking about low-priced shares. Most define penny stocks as those trading below $5 per share. In many cases, the thought of OTC stocks has become more mainstream.
The fact is that there are plenty of Nasdaq and NYSE-listed penny stocks to watch as well. In this article, we’ll look at a few that can be purchased for under $5 right now. Will they be worth the risk, or should they be avoided entirely?
Top Penny Stocks To Buy For Under $5
ARCA Biopharma (NASDAQ: ABIO)
Shares of ARCA Biopharma shot higher during premarket trading on December 2. The company has worked on the development of therapies for cardiovascular disease. This has helped extend its work into other verticals, including potential treatments for SARS-CoV-2.
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This week, the company reported completing enrollment in its ASPEC-COVID-19, ARCA’s Phase 2 trial evaluating treatment in hospitalized patients. In total, 160 patients were enrolled in the US, Argentina, and Brazil. With topline data expected next quarter, ABIO stock could be one to watch.
Dr. Michael Bristow, ARCA’s President and Chief Executive Officer, commented, “Completing enrollment in ASPEN -COVID-19 is a significant milestone for the development of rNAPc2 as a potential treatment option for patients hospitalized with COVID-19 who have biomarker evidence of coagulopathy…We look forward to sharing the top-line trial results in the first quarter of next year and reviewing the findings with the FDA.”
As cases of the new Omicron variant continue rising, stocks with exposure to treating the virus could remain in the spotlight.
Spectrum Pharmaceuticals Inc. (NASDAQ: SPPI)
When looking for penny stocks to buy, some try to identify a few that have reached fresh lows. The basic strategy for making money with cheap stocks is to buy low and sell high. With that, you can imagine why traders might look for stocks near 52-week lows, for instance.
Spectrum Pharmaceuticals fits this mold and reached new lows of $1.49 on December 1. Following that drop, however, SPPI stock ended up mounting a solid rebound to highs of over $1.70. Looking at the stock’s chart, you should also see that trading volumes have been much…