Penny stocks are shares of companies that trade for less than $5. While some people may have their own definitions, this is generally considered the standard. Whatever the case, the goals are the same: make money and repeat the process.
One of the most exciting things about finding cheap stocks to buy is leveraging their inherent volatility to turn small sums into significant gains. For example, a 50-cent move in a stock trading for $5 is a quick 10%. Today, however, we look at some of the cheapest penny stocks. These are ones that a 50-cent move could equate to a jump (or drop) of 50% or more.
Now that you know what penny stocks are (according to the definition) trading them is the next step. We’ll provide a few resources at the end of the article for anyone new to trading or new to low-priced stocks. Let’s look at a handful of some of the cheapest stocks to watch right now, and you can decide if the risk is worth the potential reward.
Penny Stocks To Watch
- Catalyst Biosciences Inc. (NASDAQ: CBIO)
- Jaguar Health Inc. (NASDAQ: JAGX)
- Kala Pharmaceuticals Inc. (NASDAQ: KALA)
- Cybin Inc. (NYSE: CYBN)
How To Find The Best Penny Stocks To Buy
Today, price is the focus. But that isn’t the only way to find penny stocks to buy. Late last week, we saw a surge of interest in several biotech stocks that had companies developing treatments for monkeypox. Whether or not this topic captivates headlines in the coming weeks is secondary to the speculation that it has sparked.
We’re seeing topics like “monkeypox stocks to watch” as a trend. The critical thing to remember is that whatever the catalyst might be, your trading strategy and game plan are crucial to your success. Without knowing how, why, or when you’re going to buy or sell, it can become challenging to make money trading. Again, we’ll discuss some strategies at the end of the article. Let’s take a closer look at a few stocks under $1 to watch this week.
1. Catalyst Biosciences Inc. (NASDAQ: CBIO)
Shares of Catalyst Biosciences jumped early on Monday morning. This was thanks to news that came out during premarket hours. The biopharma company announced that it sold its portfolio of protease medicines, including its CB 2782-PEG platform, to Vertex Pharmaceuticals (NASDAQ: VRTX). The news of a sale is great, but the price tag has traders reacting. Catalyst’s deal was for $60 million in cash.
“We have been exploring strategic alternatives to monetize our assets and maximize value for our shareholders. This sale is part of the ongoing strategic process that we announced in February to explore alternatives and create value for shareholders. We have significantly reduced our cash burn and continue to work with our advisors to evaluate additional strategic alternatives for Catalyst.”
Nassim Usman, Ph.D., Chief Executive Officer of Catalyst Biosciences
Armed with fresh cash and continuing efforts to seek strategic alternatives, traders have rallied behind CBIO stock early in the week.
2. Jaguar Health Inc. (NASDAQ: JAGX)
Another one of the biotech penny stocks to watch early this week is Jaguar Health. While shares have been muted in price performance over the last week, Monday kicked off a more bullish ton in the stock market. Jaguar specializes in treatment development for gastrointestinal diseases in humans and animals.
This week, the company announced the launch of its Canine Cancer registry and index. The goal, according to Jaguar, is to help the veterinary community and dog owners and provide them with data for canine cancer diagnosis. The program has been labeled Take C.H.A.R.G.E. (Canine Health And ReGistry Exchange).
“The information from Take C.H.A.R.G.E. will provide the first ever national representation of the incidence and prevalence of canine cancer and will help inform decisions that advance the quality of life of both dogs with cancer and their owners. The data may also provide insights to help better understand cancer in humans.”
Lisa Conte, Jaguar Health Founder, President and CEO
It will be interesting to see how the market reacts after this news. Immediately following the update, shares of JAGX stock jumped during premarket hours on Monday.
3. Kala Pharmaceuticals Inc. (NASDAQ: KALA)
This seems to be a running trend in the stock market today: cheap biotech stocks under $1. Kala Pharmaceuticals continues that trend as shares surged during Monda’s premarket session. A few days after H.C. Wainwright reiterated its Buy on KALA stock, the company reported a new sale agreement with Alcon Inc.
Specifically, Kala will sell its EYSUVIS and INVELTYS platforms. There’s an upfront payment of $60 million with commercial-based sales milestone payments potentially in the pipeline. While this transaction was announced this week, the anticipated closing isn’t expected until next quarter. Due to this, KALA stock could also be on the radar later this year.
Kala now plans on focusing its efforts on developing its KPI-012 platform. This is the company’s rare and severe ocular disease treatment candidate. Kala expects to begin a Phase 2/3 clinical trial for persistent corneal epithelial defect later this year.
4. Cybin Inc. (NYSE: CYBN)
Psychedelic stocks might not be the “flavor of the month” right now. But they are something that investors are beginning to look into. The potential of treatments that can address neurological disorders is starting to be realized. Cybin works with a network of partners to create medicines to address mental health issues.
Earlier this month, along with Kernal, a neuroimaging company, Cybin announced pilot results from a feasibility study of Kernel’s quantitative neuroimaging technology. Doug Drysdale, Chief Executive Officer of Cybin, commented that “Measuring where and how psychedelics work in the brain unlocks new frontiers of discovery in this space. Most importantly, Kernel Flow will enable us to measure the duration of effect during a psychedelic experience, which will be pivotal in developing the most accurate and effective treatment regimens for patients.”
This week could be one in that some traders have CYBN stock on their watch list. The company will present at H.C. Wainwright’s Global Investment Conference on Wednesday. Doug Drysdale will participate in a fireside chat. It will be interesting to see if or how the market reacts following the event.
New To Penny Stocks
If you’re new to trading penny stocks, we’ve got a few articles for you to check out below:
- What Are Penny Stocks and How to Trade Them in 2022
- Penny Stocks & Frequently Asked Questions From New Traders
- Penny Stocks To Buy: 5 Tips For Trading Stocks Under $5
- Are Penny Stocks Good For Beginners? [Answered]
- 4 Reasons You’re Not Making Money With Penny Stocks
- How To Make Money In A Recession When There’s An Inverted Yield Curve