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What are Penny Stocks?

Penny stocks, occasionally referred to as “micro-cap” or “nano-cap” stocks are low-value stocks representing smaller companies traded on the stock market. Usually, they’re offered by companies that are either still in a developmental stage or companies that just offer one or two different products.

As the name suggests, these stocks are often priced under $ 5 per share — making them much more accessible to new penny stock investors or those with less capital. There is less regulation in the penny stock market. Unlike the big national exchanges where there’s a high amount of regulation, penny stocks aren’t held to the same standards.

Because of this, there can be a lot of fraudulent information out there about these stocks, so it can be hard to discern what’s true and what is not when it comes to these companies and their offerings. Largely due to these factors, penny stocks are extremely volatile. The market can swing up or down very quickly.

Why invest in Penny stocks?

There are benefits to trading penny stocks, which are:

• Since penny stocks are priced on the low end, they’re accessible to traders with small accounts.

• Investors can start with very low capital.

• One of the biggest advantages of trading penny stocks is that it’s extremely easy to get started.

• Diligence can be rewarded. If investors can do their own research on the companies to evaluate whether or not they’re good investments, then you might be rewarded for your studies.

• Potential profit on the way up or down. With penny stocks, investors can potentially profit as stocks go up or down in value. While many of the companies offering penny stocks will fail, this can actually provide an opportunity for traders to sell short.

Penny Stocks Risks

• A primary risk of penny stocks is the potential for a lack of reliable, readily available information.

• Also, many penny stocks are issued by newly formed companies with little or no track record. Without enough information, you may not be able to fully evaluate the company.

• Less stringent disclosure requirements can make penny stocks particularly susceptible to illegal “pump-and-dump” schemes. Unscrupulous investors buy the stock, and actively promote only its virtues to artificially inflate the price. And when the stock price appreciates, they sell it at an artificially inflated price.

• Penny stocks have low liquidity. Many penny stocks are thinly traded. When buying or selling a stock that has low trading volume, investors may not be able to do so at their desired price or time, and that can be costly.

Tips for trading penny stocks

Trading penny stocks can be risky due to their potential for high volatility and low liquidity. Therefore, investors should proceed with caution and measure. Here are some tips to consider:

• Invest money which is not a part of your regular expenditure. Never invest money you can’t afford to lose. It also may be best to avoid penny stocks if you have a short investment time horizon.

• Pay close attention to market trends to make informed decisions.

• Use technical analysis, charts, and watch patterns to predict future price movements. Penny stocks can provide significant returns but come with a lot of risk.

Here is the list of the best Penny Stocks to buy Right now:

SrCompany NameSymbolStock PriceMarket Cap1SavaraSVRA$ 3.64$ 598.32 million2Navitas SemiconductorNVTS3Archer Aviation Inc.ACHR4Pitney BowesPBI5TaboolaTBLA$ 3.52$ 1.14 billion

Savara

Savara is a clinical-stage biopharmaceutical company developing treatments for rare respiratory diseases. Its lead product candidate is an immunostimulator called molgramostim. Molgramostim is in phase 3 clinical trials to treat autoimmune pulmonary alveolar proteinosis, or aPAP.

Molgramostim has received an FDA orphan drug designation — given to drugs targeting rare diseases — for treating aPAP. It has also received a similar designation from the European Medicines Agency and a breakthrough therapy and fast-track designation by the FDA.

Savara expects data from its pivotal phase 3 trial of molgramostim by mid-2024. The company also said it has enough cash to fund operations into 2026.

Breakthrough therapy and fast-track designations suggest the FDA is facilitating molgramostim’s approval process. The biopharma company has reported enough cash to fund operations into 2026. Moreover, the Phase 3 trial data on molgramostim is imminent. However, there is a risk that the molgramostim trial data disappoints. Also, it may take a while for Savara to commercialize molgramostim and turn a profit. Given aPAP is an extremely rare disease, molgramostim’s market size may be limited.

The chart below shows the performance of Savara Stock in the past year. The stock started the year 2024 at a price of $ 4.65. After a small decline in the initial month, the stock picked up pace and went as high as $ 5.59 in March. Then the stock started to decline and continued to do so in the next few months. The stock went as low as $ 3.66. Then again, the stock went up and touched $ 5.07, and eventually the stock last closed at $ 3.63. The stock remained volatile throughout the year with a 22 % decline during the year.

Navitas Semiconductor

Navitas Semiconductor develops ultra-efficient gallium nitride (GaN) semiconductors. The company hopes to help transition the semiconductor industry from silicon chips to GaN for power applications. Those applications include consumer electronics, fast mobile chargers, and data centers.

Navitas has reported impressive growth in recent quarters. The company also said customers have responded positively to its new technology, including GaNSlim products. Unfortunately, the company is not consistently profitable and has required periodic capital infusions.

The market of Navitas is a massive high-growth market. The company is reported acquiring new contracts among AI-based data center customers. And its customers are reportedly increasing at a very high rate. However, there have been liquidity issues for the company, where cash in hand has been problematic. Moreover, the future of good profitability is still unclear.

The below chart shows the performance of Navita’s stock during the current year. The stock started the year 2024 at a price of $ 7.92. The stock remained bullish throughout the year and went as low as $ 2.18. The stock last closed at $ 2.47, representing a 68 % decline to date.

Archer Aviation Inc. 

Archer Aviation develops and produces electric vertical takeoff and landing, or eVTOL, aircraft. Archer’s Midnight aircraft is a piloted, four-passenger eVTOL. The Midnight is designed to perform several short, back-to-back flights with minimal charge times between flights. Archer hopes the Midnight could eventually cut 60 to 90-minute urban commutes to 10 to 20-minute electric air taxi flights.

In June 2024, Archer announced the Federal Aviation Administration granted the company certification to operate a commercial airline. Archer also recently announced a large deal with the Abu Dhabi Investment Office. The agreement would accelerate the development of commercial air taxi operations in the United Arab Emirates. Archer has yet to be profitable but has maintained good cash liquidity.

Recently Archer Aviation received FAA certification to operate a commercial airline. Its two-pronged approach to direct aircraft sales and air taxi services is different from mainstream aviation companies. And it has started to expand its partnership with other major airlines which include United Airlines and Stellantis. However, the company’s business model is still very vague and not publicly understood. And the high price of tickets, the company is offering is a big downside towards its expansion and profitability. One of its unique offerings the “electric vertical takeoff and landing” is no doubt unique, and has a very small market that may take many years to mature.

The chart below shows the performance of Archer Aviation stock during the current year. The stock kicked off the year at a price of $ 6.02 with a bearish stance. This bearish performance continued for many months and the stock went as low as $ 3 in May. From here the stock recovered and went as high as $ 5.39. Then again, the stock started to decline and was seen last closing at $ 3.15. Overall, the stock’s year-to-date performance shows a 48 % decline.

Pitney Bowes

Pitney Bowes Inc., a shipping and mailing company, provides technology, logistics, and financial services to small and medium-sized businesses, large enterprises, retailers, and government clients in the United States and internationally.

It operates through:

• Global E-commerce – The Global E-commerce segment provides domestic parcel services, cross-border solutions, and digital delivery services

• Presort Services – The Presort Services segment offers mail sortation services, which allow clients to qualify volumes of first-class mail, marketing mail, marketing mail flats, and bound printed matter for postal work sharing discounts.

• SendTech Solutions segments – The SendTech Solutions segment provides physical and digital mailing and shipping technology solutions, and other applications for sending, tracking, and receiving letters, parcels, and flats as well as financing alternatives to finance equipment and product purchases.

It markets its products, solutions, and services through direct and inside sales forces, global and regional partner channels, direct mailings, and digital channels.

Shares of shipping company Pitney Bowes have lost about half their value since the beginning of 2021, with the company weighed down by some poor decisions and investments in its global e-commerce (GEC) segment. In May, Pitney Bowes announced plans to cut upward of $100 million in annual costs as part of a broader push to overhaul the business. Pitney Bowes has agreed to liquidate much of its money-losing e-commerce business with the help of Hilco Global.

The below chart shows the stock performance of Pitney Bowes during the current year. The stock started the year 2024 at a price of $ 4.4. During the initial months, the stock maintained its stock price. In May, the stock kicked off with a bullish stance and remained bullish throughout the year. The stock went as high as $ 7.5 and was seen last closing at $ 7.21. Overall, the year-to-date performance shows a 64 % appreciation to date.

Taboola

Taboola.com is an online advertising and content company. It provides a two-sided marketplace that connects digital property owners with advertisers. Taboola focuses on the open web market, which refers to digital properties outside closed-off platforms such as Facebook, Google, and Amazon.com. Taboola estimates that the open web content market is worth over $80 billion. Its recommendation engine incorporates artificial intelligence and deep learning technology. The company works with a vast network of advertisers to reach millions of daily users.

Taboola’s partnership with Yahoo is a significant source of revenue. Its revenue growth has been pretty high in recent quarters. Additionally, its AI bidding technology suite Maximize Conversions generates significant revenue for the company. However, Taboola should be vigilant about its AI machine learning and algorithms which should remain competitive. And a huge reliance on revenue from a single source, that is Yahoo, can be risky in unforeseen circumstances.

The chart below of Taboola stock shows the performance for the current year. The stock kicked off the year 2024 at a price of $ 4.3. After an initial hike in price, where the price reached the peak of $ 4.86, the stock reversed its course and went bearish. This bearish trend continued for a major part of the year and the stock went as low as $ 2.8752 in August. From here on the stock recovered a bit and eventually closed at $ 3.32. Overall, the stock declined by 22.8 % during the year.

Source:https://elliottwave-forecast.com/stock-market/best-penny-stocks-buy-right-now/