Penny stocks are typically defined as stocks that trade below $5 per share. They offer the chance for big rewards but also come with significant risks. As always, it’s important to carefully research any investment before putting your money into it.
These cheap stocks have an appeal because you can buy a large number of shares for a relatively small investment. For example, $500 could buy thousands of shares in a penny stock, whereas it would only buy a few of shares in a stock like Apple (NASDAQ: AAPL). The potential upside is theoretically unlimited if the stock increases dramatically in price. Some penny stocks have risen hundreds or thousands of percent in short periods.
Of course, penny stocks can also go down and become worthless. They tend to be higher-risk investments as the companies are often small, struggling, or in the early stages of development. Liquidity is also low, making buying or selling shares difficult without impacting the price. Plus, penny stocks are frequent targets of fraud and pump-and-dump schemes. So while the chance of hitting it big exists, more often, investors lose money trading penny stocks.
Finding Penny Stocks To Buy
When looking for penny stocks to invest in, focus on companies with solid management teams and healthy financials given their stage of growth. Look for those demonstrating accelerating revenue, improving margins and profits, or other signs they are executing well on their business plans. Also consider stock float, daily trading volume, debt levels, cash on hand, and other metrics indicating financial health.
Ideally, the company will operate in an industry with strong growth potential over the coming years. Having a unique product or service with sizable target markets can signal upside potential if the company performs. Of course, always take management promises with a grain of salt and pay more attention to financial results.
There are risks beyond the standard investment risks too. Thinly traded penny stocks are easier for scammers to manipulate through pump-and-dump schemes. This is where the promoters talk up and artificially increase the price before dumping their own shares on unsuspecting investors.
Also, as penny stocks have reporting requirements less stringent than major companies, transparency can be limited. Needless to say, this hasn’t stopped thousands of investors from trading cheap stocks every day. In this article we look at a handful of penny stocks to watch this week gaining attention for various reasons. Whether they’re the top names on your list is up to you but more information can’t hurt.
Penny Stocks To Watch This Week
Ginkgo Bioworks (DNA)
Ginkgo Bioworks, a biotechnology firm, specializes in cell programming and biosecurity. They leverage synthetic biology for diverse applications, including pharmaceuticals and agriculture. It recently received a grant from the Bill & Melinda Gates Foundation. This grant supports developing a live cell therapeutic for HIV and malaria treatment. The approach involves creating an engineered cell line that functions as a “cell factory.”
This line would continuously deliver protein therapeutics, potentially for over a year. Ginkgo plans to utilize its expertise in mammalian cell engineering, genomics, and systems biology. The aim is to engineer cell lines with high productivity and extended longevity, combined with an implantable device for continuous antibody delivery. This innovation could significantly enhance treatment accessibility, especially in low- and middle-income countries.
Ginkgo also secured a partnership with OneOne Biosciences, a French agricultural startup. The collaboration aims to enhance agricultural microbial solutions for farmers. OneOne is developing a novel device, the OneOne Multiplier, to amplify microbes for crop application. Their initial focus is nitrogen fixation, a significant market. Ginkgo will assist with in vitro and in planta assays and strain optimization. This partnership could revolutionize agricultural practices and reduce reliance on chemical solutions. Thanks to these latest milestones, DNA stock has been on the radar in December.
Tellurian Inc. (TELL)
Tellurian Inc. is a Houston-based company 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.
Connexa Sports Technologies (CNXA)
Connexa Sports Technologies focuses on connected sports solutions. They develop sports technology, emphasizing the sports consumer’s needs. This week, Connexa reported positive feedback for its Slinger App, an AI-driven tennis application. Over 500 beta testers globally are using the app, with another 500 soon to join.
The Slinger App, powered by Gameface, provides analytics from tennis practice or match videos. Its four key analytical pillars include Hitting Foundation, Shoulder Rotation, Weight Drift, and Hitting Contact. The app will launch in February 2024, initially as a freemium service, before transitioning to a subscription model.
Connexa’s Slinger App shows promise based on the company’s outlook, with its AI analysis. The app’s market performance post-launch will be key to assessing its impact on Connexa’s business, and the tone set by AI stocks in 2023 could be a bigger focus heading into next year, whether the outcome is bullish or bearish.