What is a penny stock? Well, when it comes to the world of cheap stocks, penny stocks are simply those that are trading below $5 per share. While some traders have their own definitions of what a penny stock is, we’ll use the standard SEC definition. Regardless of price, it’s important to understand what you’re getting into when looking for penny stocks to buy. The main thing I’m talking about is your ability to handle risk.
One of the biggest things new traders forget about is penny stocks are more than just cheap stocks. In fact, a $4 penny stock can be less “expensive” than a $0.40 penny stock based on a few fundamental factors. First, and foremost, what is the overall share structure of the stock you’re looking at? Is the outstanding share count below 20 million shares? If so, you could be looking at a $4, low-float penny stock.Penny Stocks To Watch This Month
Why would you want to have this “low float penny stock” on your list instead of the $0.40 one with over 500 million shares outstanding? Simply put, lower float penny stocks tend to move quickly. If short-term breakouts are a focus of yours, then this route may be an attractive one. You’ve also got to consider that lower floats mean higher volatility and quicker swings in both directions; up and down. In that case, you’ll want to have a strategy in place to address this volatility.
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What else could make a lower-priced penny stock “expensive” compared to a higher-price one? Take a look at the filings and see how the company has raised money. Are they doing it at a steep discount to market? If so, then the institutions backing the company have already placed a “value” on that company. This isn’t to say that all penny stocks with this type of financing are expensive.
It also isn’t saying that all penny stocks with low floats are “cheap”. But what I am saying is just because the price of a penny stock is lower, that doesn’t mean you should ignore other penny stocks with higher prices. At the end of the day, percentage gains are what you’re after. With this in mind, these penny stocks can be bought for under $4 but are they worth it?Penny Stocks To Buy Under $4: Tonix Pharmaceuticals Holding Corp.
Tonix Pharmaceuticals Holding Corp. (TNXP Stock Report) was one of the good penny stocks to have on your radar back in July. That was when shares rallied from around $0.53 to highs of $2.46. That 364% move didn’t just come out of nowhere; the company entered a deal with Columbia University. It focused on studying the immune responses to COVID-19 in healthy volunteers who have recovered from COVID-19 or were asymptomatic. However, since then, you can see that TNXP stock hasn’t lived up to the July hype. The penny stock dropped to around $0.80 by the end of August and hasn’t really done much since then.
Coming up this month, however, TNXP stock could be back on the radar. The company is coming off of a key development last week. Tonix announced that the first participant was enrolled in the Phase 3 RALLY study (TNX-CY-F306) of TNX-102 SL 5.6 mg for the management of fibromyalgia.
“This is an important milestone for Tonix and potentially for the nation’s roughly 8 million adult fibromyalgia sufferers,” said Seth Lederman, M.D., President and Chief Executive Officer. “Our team is dedicated to advancing TNX-102 SL, which is being developed as a novel, non-opioid, non-addictive, centrally-acting analgesic.”
An interim analysis of the first of the current fibromyalgia trials, RELIEF, is expected by the end of September. Then topline results expected by year-end. Considering the timing of this first round of interim data, September could be an important month for Tonix. Keep this in mind if TNXP stock is on your watch list right now.Penny Stocks To Buy Under $4: Marinus Pharmaceuticals Inc.
Marinus Pharmaceuticals Inc. (MRNS Stock Report) was one of the good penny stocks to have on your list earlier this year. Between mid-March and mid-June, shares of MRNS stock ran from lows of $1.04 to highs of $3.50. Similar to Tonix, Marinus wasn’t able to maintain that same fervor from earlier in the year and shares began sliding. Since hitting a low of $1.51 in July, however, MRNS stock seems to have made a few attempts at a rebound. Since then, shares have traded in a channel between $1.60 and $2 with a few days MRNS spiked above the upper threshold.
Late last week, you might remember us discussing MRNS stock a bit. This came as MRNS stock started to rebound strongly following a week-long downtrend. Heading into the month of September, there is still something hovering over traders’ heads. Looking back at the company’s August 6th press release, Marinus reported a few things. One of the important ones in my opinion had to do with its Phase 3 clinical trial in CDKL5 deficiency disorder or “CDD”. The company is evaluating the use of its oral ganaxolone in children and young adults with CDD.
On July 30th, the company announced the FDA has granted Rare Pediatric Disease Designation for ganaxolone for the treatment of CDD. What’s more is that Marinus said preparations have begun for an expanded access program in CDD that would allow the company, on positive data, to offer ganaxolone to patients who were unable to participate in the Phase 3 trial. The company said it’s on track to deliver top-line data this quarter. Considering this is the final month of the quarter, the countdown has begun.Penny Stocks To Buy Under $4: Cassava Sciences Inc.
Cassava Sciences Inc. (SAVA Stock Report) was a huge winner at the end of 2019. Shares rallied from $1.05 to highs of $10.95 by the start of 2020. There was an interim drop to lows of $3.10 in March, followed by another breakout move to $10.18. But that was the last SAVA stock would see levels of over $10.
In May, Cassava stock dropped to a low of $1.63, seemingly overnight. Like we have said in the past, biotech penny stocks can present some of the biggest opportunities for gains but also present some of the highest risk situations for losses too. In this case, SAVA stock dropped after headlines that the company missed its endpoint in its Alzheimer’s disease study.
Since plummetting back in May, SAVA stock has made a slow but steady move higher. In fact, since those May 15th lows, as of Friday’s closing bell, SAVA is up 85%. So why is September an important month for Cassava Sciences? The company is conducting a comprehensive analysis of the clinical results of its Phase 2b study. This includes evaluating the effects of PTI-125 on cognition.
In its August business update, Remi Barbier, President & CEO, said, “Our Phase 2b study was well-conducted, but we believe the analysis of results is a re-do. This effort is on-going. I believe the outcome of our Phase 2b study will be better understood after final clinical results are announced in September 2020.”
Will Cassava manage to meet its mark this time around?Penny Stocks To Buy Under $4: BioCryst Pharmaceuticals Inc.
BioCryst Pharmaceuticals Inc. (BCRX Stock Report) saw a wild day of trading last Friday. The penny stock hit lows of $3.31 almost right after the market opened, then rallied back to a high of $3.74 before the closing bell. This move came just a day after the company announced that the U.S. Department of Health and Human Services exercised its option to purchase an additional 10,000 doses of BioCryst’s approved antiviral influenza therapy, RAPIVAB® (peramivir injection).
The purchase price was approximately $7 million. It’s part of a $34.7 million contract the Centers for Disease Control and Prevention awarded in 2018. The initial contract was for the procurement of “up to 50,000 doses” of RAPIVAB (peramivir injection) over a five-year period.
With this development, you might think that is the reason to have BCRX on your list of penny stocks this month. However, September could have much more in store. The company previously reported that key data is expected by the end of Q3. In its business update in August, BioCryst announced details of data readouts from two treatments.
First, data from its 200 mg/400mg BCX9930 treatment in paroxysmal nocturnal hemoglobinuria patients is expected by the end of the quarter. Specifically, the company expects to report data from treatment-naïve PNH patients receiving 200 mg / 400 mg of BCX9930 twice daily. Additionally, information from Part 1 of galidesivir trial in COVID-19 patients expected by end of Q3 2020. This is the company conducting a clinical trial in Brazil to assess the safety, clinical impact and antiviral effects of galidesivir in COVID-19 patients.
The galidesivir program is being partly funded by the National Institute of Allergy and Infectious Diseases. The goal of the galidesivir clinical program is to evaluate clinical activity that would support additional government investment and advanced development of galidesivir.