Penny stocks, particularly those that trade below the $1 mark is notorious for being risky bets. This is because of their nature of being able to swing either way. Given the uncertainty they come with, such stocks hold a poor reputation amongst the more seasoned investors. Despite this, best under $1 stocks continue to be highly popular investment options throughout the market.
There are various reasons why one would choose to include penny stocks in their stock portfolios. For one, stocks that are trading so low could possibly be undervalued. This is especially the case where stocks have fallen far from their peaks, down to below the $1 mark.
Secondly, every high-value stock, be it Amazon or Google, started off with humble beginnings. They held extremely low prices before further growth was eventually realized. Where there is the promise that a particular stock could achieve such a soaring appreciation over time, investors rush to take early positions.
In this article, we attempt to shine a spotlight on some of the most promising penny stocks. In particular, we focus on those that currently trade below the $1 mark.
Evofem Biosciences Inc.
Up first is the women’s reproductive healthcare bio-stock, Evofem Biosciences Inc (EVFM). The stock is one that holds significant promise. It caters to a substantial market, and already has commercialized products that it profits off of. In fact, its on-demand birth control product, Phexxi, had just been approved for a four-year shelf-life extension by the US FDA. This seriously adds a boost to the market sustainability prospects of the company. Such metrics are a significant green flag that penny stockholders consider for investment.
Moreover, the company is optimistic about its topline phase 3 results for its candidate, EVO100, later this year. The treatment is a highly promising preventative drug that will ensure protection for women against chlamydia and gonorrhea.
In order to gauge the growth potential of the stock, we take a more objective analytical approach. Trading at only 36 cents a share, analysts expect EVFM to rise up to a mean price of $22.10. This reflects a whopping growth rise of over 6000%. A rise of such epic proportions is far from unrealistic, especially when considering that EVFM was trading at almost $20 just a year ago.
This stock very much could be a goldmine for investors willing to undertake the risks and uncertainties associated with best under $1 stocks.
iClick Interactive Asia Group Limited
The second penny stock on our list of best under $1 stocks is the stock for the Hong Kong-based digital marketing player iClick Interactive Asia Group Limited (ICLK). Analysts have set a target price on the stock at an impressive $8.54, with its sales continuously rising in the last five years, without interruption. Given the sales the company delivers, its PS ratio of 0.23 is currently the lowest in the advertising industry, which hints at the serious undervaluation of the stock.
E-commerce marketing in China remains at the forefront of the growth drivers since the digital dynamic shifts that had come about since the outbreak of the Covid-19 pandemic. iClick Interactive’s management had reported triple-digit enterprise growth in its recent most annual results, a trend which it expects to continue at least for the next three years.
The price of ICLK had plummetted in the prior year, falling 96% from its peak of over $17 in February 2021. This in large part had been due to the declining quarterly EPS results, which continuously missed its analyst expectations, given the Chinese macroeconomic slowdown. These conditions which had actualized in the latter half of 2021 had directly resulted in a contraction of the digital advertising sector in the Chinese market. However, the management remains highly optimistic as to the potential of the country’s digital market. With the growth of services such as WeChat, Weibo, RED, and TikTok, analysts expect sustained growth into the future. In 2020 alone, McKinsey had reported a 30% e-commerce sales growth in 2020, reaching the $1.7 trillion figure.
The current conditions understandably have led to panic amongst market participants. However, they have also led to a serious undervaluation of the stock, in light of its wider growth potential.
Up next, we present fintech penny stock, The OLB Group (OLB). The company offers online, in-store, and mobile payments to small and mid-sized American merchants. Its most recent offerings include cryptocurrency payments and mining.
In the company’s recent first-quarter earnings of 2022, it reported a revenue of nearly $9 million, out of which 97% reflects merchant sales, and 3% comes from crypto-mining. This is promising given that the lion’s share of its revenue comes through the merchant segment which is an organic growth area. Moreover, the company claims to be gaining up to 150 new merchants on average, which have a mean customer lifecycle period of about 7 years.
These growth prospects do appear promising, which explains the target price of $10 set for the stock by analysts. According to this outlook, we can expect OLB shareholders to see their capital appreciate by 900%.
We here at Stocks Telegraph remain optimistic about OLB because of the prime industry it finds itself in. Its sustainable business model also inspires much confidence. This may very well turn out to be a heavy stock many years down the line, making the present opportunity ideal for hoarding this best under $1 stock.
Landos Biopharma Inc
The fourth penny stock we put forward is Landos Biopharma Inc (LABP). This is a stock with immense promise, presently trading below 90 cents. Despite such a low price, it holds a mean target price of an impressive $20.46. This translates into potential gains that are close to the 2200% growth mark. This is not a figure any investor would simply brush aside if he aims to invest in the best under $1 stocks.
The company has a number of candidates in the pipeline, each of which address various specific autoimmune conditions amongst patients. At present, the company is not generating revenue. Instead, it strategically focuses on seeing its various treatment candidates progress towards maturity and eventual commercialization. Each of these candidates remains in their early lifecycle phases, with 2b trials for Omilancor expected to be announced later in 2022.
Autoimmune disease is a growing area in research, with frequent developments making the news. If a single candidate from the LABP portfolio is pushed onward in its development lifecycle, the stock could experience stellar gains. We believe that LABP is presently trading at a discount, and is dirt cheap, in comparison to where it is likely to be in a few years down the line.
Orbital Energy Group Inc
The final penny stock on our list, but certainly not the least, is that of the US energy and telecommunications solutions provider, Orbital Energy Group Inc (OEG). The stock presently stands above 90 cents and has seen quite a fall since last year. After hitting an almost 7-year peak of $9 in February 2021, the stock has persisted on a rapid bearish trajectory. Due to this, it had lost 80% in the last year alone, owing to its poor financial performance.
2022, however, promises to be a turning point for Orbital Energy Group, which many say is positioned to attain aggressive growth, given its strategic mergers and acquisitions undertaken in each of its core sectors. For instance, in the electric utility front, OEG acquired Front Line Power Construction LLC for over $200 million. Similarly, in the telecommunications domain, it had gone on to acquire Gibson Technical Services. Alternatively, the company has also been streamlining its structure by exiting non-value-adding agreements. This was evident in its divestment in Orbital Gas Systems’ UK and North America subsidiaries.
These strategic restructure initiatives have analysts bullish on OEG. As a result, its target price is $9.25, far above its present price figure of 97 cents. These prospects make the stock fall in the category of best under $1 stocks
Each of the penny stocks presented above holds unique strengths and are have stellar growth potential. Of course, it goes without saying that where investors anticipate gains of such colossal proportions, there is a likelihood of loss. However, for those willing to see exposure to a certain degree of risk, the best under $1 stocks presented above are some great options for inclusion within one’s portfolio.