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      Penny Stocks on Robinhood: Unleash Profit Potential

      By Wasim Omar

      Published on

      December 20, 2021

      8:18 AM UTC

      Last Updated on

      July 19, 2023

      6:18 AM UTC

      Penny Stocks on Robinhood: Unleash Profit Potential

      Penny stocks are a key sight for investors these days as inflation is running high. When we talk about penny stocks, it’s more about how easily investors can get into the market and gain returns.

      Robinhood has helped give easy access to new retail traders. That’s especially true when you see all of the penny stocks breaking out, thanks to retail momentum. Therefore, one must have a look at Robinhood Penny Stock List.

      Robinhood is not really the go-to platform for trading penny stocks, in specific. But the broker has attracted more traders and investors into the markets due to its easy-to-use interface.

      In this article, we’ll address penny stocks Robinhood and those who trade on Robinhood and are looking for the Robinhood penny stock list.

      What Are Penny Stocks?

      Before delving into our analysis of penny stocks Robinhood, it would be prudent to take a step back and assess the notion of penny stocks themselves.

      What Are Penny Stocks.png

      Penny stocks are stocks of small companies with low market capitalization, usually trading at a relatively low price per share. The exact definition of penny stocks can vary, but they are generally considered to be stocks priced below a certain threshold, such as $5 or even less.

      These stocks often trade on over-the-counter (OTC) markets or on small exchanges.

      Penny stocks are typically associated with higher risk and volatility compared to larger, more established companies.

      Penny stocks often lack the financial stability, consistent track record, and regulatory scrutiny that larger stocks enjoy. As a result, investing in penny stocks can be speculative and subject to significant price fluctuations.

      It is important to note that penny stocks can be enticing to investors seeking the potential for quick and substantial gains. Due to their low prices, even a small positive price movement can result in high-percentage returns.

      Additionally, some penny stocks represent early-stage companies with innovative ideas or emerging technologies, attracting investors looking for opportunities in promising ventures.

      Why Should You Invest in Penny Stocks?

      There is a significant appeal to penny stocks that has a large segment of the market attracted to their offerings. Discussed below are the main reasons why you should invest in penny stocks:

      • Potential for Substantial Gain

        Penny stocks have the potential for significant price appreciation in a short period. Due to their low prices, even a small increase in the stock price can result in substantial percentage gains.

        This potential for rapid growth attracts investors looking to make quick profits.

      • Access to Early Stage Companies

        Penny stocks often represent early-stage or small companies with innovative ideas or disruptive technologies. Investing in these stocks provides an opportunity to be part of the early stages of a company’s growth and success.

        If the company succeeds, investors can benefit from substantial returns on their investment.

      • Achieve Diversification with Low Barriers to Entry

        Penny stocks allow investors to diversify their portfolios with lower capital requirements. Investors with limited funds can purchase a larger number of penny stocks, spreading their risk across multiple investments.

      • The Opportunity for Active Trading

        The volatility of penny stocks presents opportunities for active traders to capitalize on short-term price movements.

        Day traders and swing traders can take advantage of the frequent price fluctuations in penny stocks to generate profits through quick buying and selling.

      • Learning and Experience

        Investing in penny stocks can be a learning experience, especially for beginner investors. It can provide valuable insights into researching companies, analyzing financials, and understanding market dynamics.

        This knowledge gained from investing in penny stocks can be applied to future investment endeavors.

      Robinhood and Penny Stocks

      Knowing about the Robinhood platform is crucial for penny stock investors due to the wide range of benefits the platform offers, empowering them to navigate the volatile world of low-priced penny stocks on Robinhood with ease and seize potential profit opportunities.

      Robinhood and Penny Stocks

      What is Robinhood?

      Robinhood is a commission-free brokerage platform that enables individuals to trade stocks, ETFs, options, and cryptocurrencies through a user-friendly mobile app or website.

      Launched in 2013, it aimed to democratize investing by removing barriers like high fees and account minimums. Robinhood’s intuitive interface, real-time market data, and simple order execution attracted a large user base, especially among novice investors.

      Robinhood remains a popular platform for individuals looking to start investing in financial markets. It is the go-to choice for those seeking great picks among low-priced penny stocks on Robinhood

      The Benefits of Trading on Robinhood

      Traders that opt for the Robinhood platform can potentially enjoy a wide range of benefits to anyone looking into penny stocks Robinhood. These are listed below as follows:

      • Commission-Free Trading: You can buy and sell penny stocks without incurring any transaction fees, saving you money on each trade.
      • User-Friendly Interface: Robinhood’s intuitive platform makes it easy to navigate and execute trades quickly, ideal for penny stock investors looking to take advantage of fast-moving markets.
      • Fractional Shares: Robinhood allows you to invest in penny stocks with limited capital by offering fractional shares, enabling you to buy a portion of a stock rather than a whole share.
      • Real-time Market Data: The mobile app provides real-time market data, allowing you to stay up-to-date with price movements and make informed trading decisions.
      • News and Notifications: Robinhood offers customizable notifications and access to news, keeping you informed about developments that may impact your penny stock investments.
      • Accessibility: The Robinhood platform is easily accessible through its mobile app, allowing you to trade penny stocks on the go, anytime and anywhere.
      • Easy for Beginners to Adopt: Robinhood’s user-friendly interface and educational resources make it a popular choice for novice investors interested in penny stocks, providing a simple entry point into the world of trading.
      • Social Community: Robinhood offers a social aspect where users can interact, share insights, and learn from others, fostering a sense of community among penny stock traders.
      • Fast Account Setup: Opening an account on Robinhood is a relatively straightforward and speedy process, enabling you to start trading the best penny stocks on Robinhood with minimal delay.
      • Portfolio Tracking: Robinhood provides tools for tracking your portfolio performance and visualizing your holdings, allowing you to monitor the progress of your penny stock investments easily.

      Understanding Commission-Free Trading

      Commission-free trading is a trading model in which brokers do not charge a fee or commission for executing trades. Traditionally, investors had to pay a fixed fee or a percentage of the trade value as a commission to the broker for each transaction.

      However, with the advent of commission-free trading platforms, investors can now buy and sell securities without incurring any transaction costs.

      This model has several benefits for investors. Firstly, it eliminates the barrier of high trading costs, allowing investors to trade more frequently and in smaller quantities without the burden of heavy fees. This can be advantageous for active traders or those with limited capital.

      Commission-free trading platforms typically generate revenue from other sources, such as interest on uninvested cash, premium subscription plans, or payment for order flow.

      Overall, commission-free trading has democratized access to financial markets, making investing more accessible to a wider range of individuals.

      Fractional Shares on Robinhood

      Fractional shares on Robinhood enable investors to buy and own a fraction of a share rather than a whole share. This feature is especially beneficial for individuals with limited capital or those interested in expensive stocks.

      Instead of needing to afford the full price of a share, investors can allocate smaller amounts, making investing more accessible. Fractional shares allow for diversification, as investors can distribute their funds across various stocks.

      It also enables reinvestment of dividends, as even fractional ownership entitles investors to receive proportional dividend payments. Fractional shares on Robinhood provide an opportunity for broader participation in the stock market, offering flexibility and affordability to every investor.

      Popular Penny Stocks to Buy Right Now on Robinhood

      The following breaks down the penny stocks list on Robinhood showing the most popular picks that market bulls love:

      • Nano-X Imaging (NASDAQ: NNOX)
      • Sunshine Biopharma Inc. (NASDAQ: SBFM)
      • ImmunoGen, Inc. (NASDAQ: IMGN)
      • PacWest Bancorp (NASDAQ: PACW)
      • Guardforce AI Co., Ltd. (NASDAQ: GFAI)
      • Carvana Co. (NYSE: CVNA)
      • Atomera Incorporated (NASDAQ: ATOM)
      • Marathon Oil Corporation (NYSE: MRO)
      • MFA Financial Inc. (NYSE: MFA)
      • Acasti Pharma (NASDAQ: ACST)
      • Aurora Cannabis Inc. (NYSE: ACB)
      • Nokia Corporation (NYSE: NOK)
      • Aphria Inc. (NASDAQ: APHA)
      • Check-Cap ltd. (NASDAQ: CHEK)
      • Hexo Corp (NASDAQ: HEXO)
      • Oragenics Inc. (AMEX: OGEN)
      • Avinger Inc. (NASDAQ: AVGR)
      • Broadway Financial Corporation (NASDAQ: BYFC)
      • Verb Technology Company Inc. (NASDAQ: VERB)

      Top Robinhood Penny Stocks

      Genius Brands International

      The first name on our list of penny stocks on Robinhood is GNUS. Genius Brands International (GNUS) is a global content and brand management company. Being among the stocks under $1 Robinhood, GNUS stands as a highly affordable pick for investors. The company creates and licenses multimedia content for toddlers to tweens.

      Genius Brands acquired WOW! Unlimited Media for roughly $53 million in cash and stock. The Canadian animation company has a strong presence on popular social media sites such as YouTube and TikTok. Genius Brands believed that this will help it better appeal to teens and young adults.

      In 2022, the company witnessed remarkable growth, as indicated by a substantial increase in full-year revenue. The revenue surged by an impressive 691%, reaching $63.0 million, compared to $7.9 million in 2021.

      Furthermore, the company successfully reduced the operating loss for 2022 by 31% and achieved a 64% decrease in net loss when compared to the previous year.

      These positive outcomes can be attributed to several factors. The company experienced growth due to anticipated expansion and synergies resulting from recent acquisitions.

      Additionally, the expansion of the distribution network and the commencement of new content production played significant roles in driving revenue growth. The company has also implemented expense reduction measures that have already begun to yield results.

      Based on these achievements and ongoing efforts, the company is confident in its progress toward achieving positive cash flow from operations.

      GNUS is a decent Robinhood penny stock that can be a good hold in both the short-term and long-term.

      BIOLASE Inc.

      Another biotech name in our list of penny stocks on Robinhood that is hovering below the $1 threshold is Biolase (BIOL). Biolase is involved in laser equipment for dental practitioners and their patients around the world. BIOL stock is hovering around its 50-day moving average but maintaining to hold levels above this significant technical level so far.

      Despite trading just over half a cent, BIOL stock is up 40% year-to-date. Biolase’s oral laser devices have earned the company its recent attention. That’s due to continued reopening efforts and novel advancements in dental technology.

      Biolase recently inked a deal with a leading endodontist, Dr. L. Stephen Buchanan, for a clinical advisory partnership. This will help Biolase in expanding laser adoption and increasing training programs with industry leaders like Dr. Buchanan.

      Biotech has also launched the Epic Hygiene Academy. Biolase has gathered leaders in the dental hygiene profession to educate on superior patient care through laser technology. That’s another way how Biolase values its consumers.

      BIOL stock is a solid Robinhood penny stock among other stocks on Robinhood. In the trailing 12-month period, the company has recorded $32.31 million in revenues. That’s more than a total of $22.78 million Biolase reported in 2020. The working capital has improved to $2.48 compared to $1.75 million in 2020. That would help the company in short-term projects.

      BIOL looks promising penny stock with all the fundamentals in the right place. Moreover, being among the stocks under $1 Robinhood, BIOL is a great option

      Eros STX Global Corporation

      Eros STX Global Corporation (ESGC) is an Indian-American multinational media company. It produces, markets, and distributes content to audiences around the world across traditional and digital media platforms. ESGC stock has steadily recovered from 52-week lows since mid-August. But, it’s still way ahead of reaching its 52-week highs.

      One of the recent drivers of ESGC stock was the company’s latest deal with Amazon Prime Video. It was closed as a multi-year deal in South Africa. That has expanded an existing strategic pan-European partnership struck in the UK, France, Italy, and Scandinavia. Prime Video subscribers in the territory now have access to view STXInternational’s catalog of titles.

      STXfilms, a division of Eros, recently signed a first-look film deal with CrossCheck Studios. STX will have a first look at all original CrossCheck film development. The plan is to produce a comedy film with a Halloween theme. Reportedly, the film will be named Halloween Party.

      However, this was just to mention what has happened recently. This deal will surely give gains to STXfilms in the coming years. That will have a positive impact on ESGC stock.

      In 2021, ESGC stock has soared over 55%. However, during the current quarter, it has gained over 30%. ESGC stock has an average price target of $3.50 and we can see ESCG reach that in the near long term.

      Its strong prospects make Eros a worthy contender in our list of penny stocks on Robinhood to buy.

      Electra Meccanica Vehicles Corp.

      The next best pick on our list of penny stocks on Robinhood is SOLO. Electrameccanica Vehicles (SOLO) is a Canadian EV maker and looks promising with the development in the electric vehicle market. The SOLO stock has been decent in 2021 and has soared over 10%.

      EV stocks have been hot lately. A recently passed infrastructure bill and an increasingly promising growth outlook for the overall industry have affected the market. SOLO being an EV-based penny stock looks solid as it attracts both penny stock investors and EV stock investors.

      Electrameccanica is still in the early stages of expanding manufacturing capacity and a retail footprint for its SOLO vehicle — a three-wheeled EV. The company is currently building a manufacturing and engineering facility in Mesa, Arizona. With the development of the Mesa facility, Electrameccanica will eventually be capable of producing 20,000 of its SOLO vehicles per year.

      The U.S. House of Representatives voted to pass the $1 trillion infrastructure spending bill late on Nov. 5, sending the bill to be signed into law by President Biden. The law includes roughly $7.5 billion in funding for the construction of EV charging stations and other related projects.

      SOLO stock could trade higher on hype in the coming months. Moreover, being a penny stock, more investors would get attracted to SOLO. The stock has an average price target of $8.95. It is far from its current trading price but we can see the sentiment is there, making it a highly compelling name in our penny stocks list on Robinhood.

      Exela Technologies Inc.

      Exela Technologies (XELA) is a leader in global business process automation. XELA stock has gained over 35% during the course of the last 12 months. XELA is a mighty name on our penny stocks list on Robinhood.

      It recently partnered with CareSource and will deploy its cloud-based PCH Global platform to help accelerate CareSource’s digital transformation journey. This expansion shows Exela’s ability to rapidly implement PCH Global for claims and correspondence submitted by providers.

      XELA continues to invest in expanding PCH Global’s capabilities to provide a cloud-hosted solution with one of the best edit resolutions for healthcare claims.

      Apart from that, Exela also announced its new Digital Mailroom solution. The Digital Mailroom solution will fully enable remote employees working at home and in field offices to access data securely and quickly. This shows that Exela is working on expansion and growth.

      In the third quarter of 2021, Exela reported lower-than-expected quarterly outcomes. The Q3 revenues dropped from $305.3 million to $279.2 million in Q3 2020. That was primarily due to low volume returns in the ITPS segment affected by COVID-19. The company believes it is well-positioned to see volumes return in the ITPS segment once COVID-19 impacts subside.

      Exela is working on expansion and expects to achieve top results in the coming years. The main target is to make improvements in margins and cash flow in 2022. XELA now targets to achieve $50 million in cash flow improvements by next year.

      All-in-all, XELA looks like a decent name among penny stocks on Robinhood heading forward. Moreover, being among the stocks under $1 Robinhood, XELA is a great option.

      Strategies for Investing in Penny Stocks

      Learning about strategies for investing in the best penny stocks on Robinhood is important for penny investors for a number of reasons.

      These strategies help penny investors navigate the volatile nature of these stocks, manage risks effectively, identify potential opportunities, and make informed decisions that can maximize their chances of success in this high-risk investment space.

      Discussed below are some of the most crucial strategies to keep in mind for anyone considering to invest in penny stocks on Robinhood.

      • Diversification and Risk Management

        Investors should diversify their penny stock portfolio by spreading investments across multiple stocks to mitigate risk, allowing them to make the most from the best penny stocks on Robinhood.

        This strategy reduces the impact of individual stock volatility and increases the chances of benefiting from potential winners while minimizing losses from underperforming stocks.

      • Setting Realistic Expectations

        It’s crucial to set realistic expectations when investing in penny stocks. Recognize the inherent risks and volatility associated with these stocks and avoid unrealistic promises of overnight riches.

        It is important to adopt a long-term perspective, focusing on steady growth rather than short-term gains.

      • Establishing Entry and Exit Strategies

        Having clear entry and exit strategies is essential. Determine specific criteria for buying penny stocks based on fundamental or technical analysis.

        Establish profit targets and stop-loss levels to protect against significant losses and prevent emotions from driving investment decisions.

      • Using Stop-Loss Orders

        Utilize stop-loss orders to automatically sell a penny stock if it reaches a predetermined price, limiting potential losses.

        This strategy helps investors protect their capital and manage risk by providing an exit strategy when a stock’s price moves unfavorably.

      • Taking Profit and Rebalancing Positions

        Regularly reassess penny stock positions, taking profits when appropriate. If a stock’s price appreciates significantly, consider selling a portion to lock in gains.

        Rebalancing the portfolio ensures a balanced allocation and helps manage risk by avoiding overexposure to any single stock or sector.

      Factors to Consider Before Investing in Penny Stocks

      Learning about the factors to consider before investing in penny stocks on Robinhood is crucial for penny investors for a number of reasons.

      Understanding these factors helps them assess the financial health of the company, evaluate market trends, analyze the company’s potential for growth, and make informed decisions that align with their investment goals and risk tolerance. Some of these factors are discussed below:

      • Risk Tolerance and Investment Goals

        Consider your risk tolerance and investment goals before investing in penny stocks. Understand the level of risk you are comfortable with and align your investment strategy accordingly.

        Determine if penny stocks align with your short-term trading objectives or long-term investment goals.

      • Conducting Thorough Research

        Thorough research is crucial before investing in penny stocks. Dive deep into company information, financial statements, news, and industry reports. Understand the company’s products/services, competitive positioning, and growth potential.

        Look for information that helps you evaluate the stock’s potential value and assess the company’s overall viability.

      • Evaluating the Company’s Financial Health

        Evaluate the company’s financial health by analyzing key financial metrics, such as revenue growth, profitability, debt levels, and cash flow. Look for consistency, stability, and positive trends.

        Assess the company’s ability to generate sustainable earnings and manage its financial obligations.

      • Analyzing Market Trends and Industry Outlook

        Analyze market trends and the outlook for the industry in which the penny stock operates. Identify factors that can drive growth or pose risks to the sector.

        Consider the company’s competitive advantage, market positioning, and the potential impact of technological advancements or regulatory changes.

      • Assessing Management Team and Company’s Business Plan

        Evaluate the experience, credentials, and past performance of the management team. Seek out transparency, efficient communication, and a well-defined business strategy.

        Go over their ability to adapt to market conditions, execute strategies, and navigate challenges. Consider the company’s vision, innovation, and plans for long-term growth.

      Common Mistakes to Avoid When Investing in Penny Stocks

      There are a number of common mistakes that penny stock investors may be faced with when investing.

      By avoiding these common mistakes and adopting a disciplined approach, investors can improve their chances of success when navigating the challenging terrain of penny stock investing.

      Common Mistakes to Avoid When Investing in Penny Stocks

      Discussed below are some of the most common mistakes people fall into:

      • Chasing Hype and Promotions

        One common mistake is chasing hype and promotions surrounding penny stocks. Investing based solely on rumors or unverified information can lead to poor investment decisions.

        It is important to rely on thorough research and analysis rather than getting swayed by exaggerated claims or market buzz.

      • Neglecting Due Diligence

        Neglecting due diligence is another major pitfall. Failing to research and evaluate a penny stock’s fundamentals, financials, management, and industry outlook can expose investors to significant risks.

        Conducting thorough due diligence helps in making informed decisions and avoiding potential scams or poorly performing companies.

      • Failing to Set Stop-Limit Orders

        Not setting stop-limit orders is a common mistake that can result in substantial losses. Stop-limit orders protect investments by automatically selling a stock when it reaches a predetermined price.

        Failing to implement this risk management tool can leave investors vulnerable to unexpected downturns or volatile market movements.

      • Overlooking Trading Costs and Fees

        Investors often overlook trading costs and fees associated with penny stocks. These stocks can have wide bid-ask spreads and higher transaction fees, eroding potential gains.

        It is essential to consider the impact of trading costs and fees on overall profitability and factor them into investment decisions.

      • Ignoring Market and Economic Factors

        Ignoring broader market and economic factors can be detrimental. Penny stocks are influenced by market trends, economic conditions, and sector-specific dynamics.

        Failing to consider these factors can result in poor timing, as well as missed opportunities or exposure to undue risks.

      Alternatives to Penny Stocks

      Alternatives to Penny Stocks

      Learning about alternatives to penny stocks is important for investors to diversify their portfolios, manage risk, and explore other investment opportunities beyond the highly volatile and speculative nature of penny stocks. The following alternatives remain the most compelling:

      • Blue-Chip Stocks

        Blue-chip stocks are shares of well-established, financially stable companies with a history of reliable performance. They offer stability, dividends, and potential long-term growth.

        Investors can benefit from the reputation, strong fundamentals, and established market presence of these companies, making them an alternative to the higher-risk penny stocks.

      • Exchange-Traded Funds (ETFs)

        ETFs are investment funds that track a specific index, sector, or asset class. They offer diversification, flexibility, and lower expense ratios compared to actively managed funds.

        ETFs provide exposure to a broad range of stocks, bonds, or commodities, allowing investors to mitigate risk and gain exposure to various sectors without the need for individual stock selection.

      • Mutual Funds

        Mutual funds combine funds from numerous investors to create a diversified collection of securities for investment purposes. They are managed by professional fund managers and offer access to a range of assets like stocks, bonds, and money market instruments.

        Mutual funds provide diversification, professional management, and potential for long-term growth, making them an alternative for investors seeking a hands-off approach to investing.

      • Index Funds

        Index funds are investment vehicles, either mutual funds or ETFs, designed to mimic the performance of a particular market index, such as the S&P 500. They offer broad market exposure, low costs, and passively managed strategies.

        Index funds provide investors with a simple, low-risk way to gain exposure to the overall market and can serve as a long-term investment alternative to penny stocks.

      • Long-Term Investing Strategies

        Long-term investing strategies involve holding investments for an extended period, typically years or even decades. This approach focuses on fundamental analysis, economic trends, and the compounding effect of growth over time.

        By investing in stable, well-established companies or diversified portfolios, investors can benefit from market appreciation, dividends, and reduced exposure to the volatility associated with penny stocks.

        Long-term investing strategies provide a more conservative approach to wealth accumulation and financial stability.


      What Are the Advantages of Investing In Penny Stocks?

      The advantages of investing in penny stocks include the potential for significant gains due to low prices and the opportunity to invest in early-stage companies with innovative ideas or technologies.

      How Can I Identify Potential Penny Stock Scams?

      To identify potential penny stock scams, watch out for unsolicited offers, exaggerated claims, limited information, and pressure to buy while conducting thorough research and consulting reputable sources.

      What Are the Key Indicators to Evaluate Penny Stocks?

      Key indicators to evaluate penny stocks include analyzing the company’s financial health, assessing market trends and industry outlook, examining management competence, evaluating business plans, and considering risk factors.

      Are Penny Stocks Suitable for Long-Term Investing?

      Penny stocks are generally not suitable for long-term investment due to their high volatility, lack of financial stability, and higher risk of scams or poor performance.

      How Can I Mitigate Risks When Trading Penny Stocks?

      To mitigate risks when trading penny stocks, implement stop-loss orders and diversify your portfolio while conducting thorough research, maintaining discipline in your trading strategy, and practicing proper risk management techniques.

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