The 5 Best Stocks Under $1 For May 2020

Chris Dios - May 1, 2020

Cheap share prices allow smaller-budget investors to load up on shares and, therefore, get a bigger payoff if the shares gain value. Owning more shares creates greater risks and greater rewards, and penny stocks under 1 dollar are affordable enough for small-budget traders to get in on the action on penny stocks. Based on our research and reviews, these are the greatest penny stocks under the low price of $1:

Best Stocks Under $1.00 for 2020

For more low-cost opportunities, be sure to check out the list of best penny stocks, best stocks under 5 dollars, and the best stocks under 10 dollars. Plus, check out our coverage of the best buying opportunities created by the sell-off in our article on the best coronavirus stocks.

In this brief article, we will explore some of the best penny stocks under $1, and teach you the skills you need to find these stocks on your own.

coronavirus stocks

The COVID-19 outbreak is taking center stage in the stock market this week, but there are still buying opportunities for cool-handed investors.

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The Best Stocks Under $1 That Could Take Off In May 2020

Unsurprisingly, biotech stocks continue to dominate the ranking. However, the pandemic is also creating opportunities in other sectors. These stocks under 1 dollar could be big winners when the economy reopens, so be sure to add them to your watchlist.  Sign Up for the new and improved Stock Dork Cheat Sheet for more stock market coverage, stock picks, expert insights, and more.

Fuel Tech (FTEK) – Last Close $0.47

Fuel Tech is a small, highly-specialized company that specializes in advanced engineering solutions for optimizing combustion systems for pollution and treatment controls. On May 7, the firm announced it secured two demonstration orders for its proprietary TIFI Bio (Targeted in-Furnace Injection) technology.

Successful demonstrations could lead to on-going commercial programs worth $500,000 to $750,000 in annual revenues per site. That’s major revenue growth for a company that’s only worth $11.55 million. Today, FTEK is rallying on the news. It’s one of the premarket’s top gainers with a 111.78% gain.

Fuel Tech released its quarterly earnings report on May 13. The firm reported a net loss of $0.10 per share and revenues of $3.8 million. Both figures were down significantly from last year’s totals, but share prices held up surprisingly well. The stock’s resilience could indicate that investors believe the company has long-term growth potential despite its shorter-term financial performance.

Ritter Pharmaceuticals Inc. (RTTR)

Ritter is a California-based company that develops novel therapeutic products that modulate the microbiome for the treatment of gastrointestinal diseases. The FDA is close to potentially approving the company’s leading product, RP-G28, for the treatment of lactose intolerance. Millions of people suffer from this condition, so the treatment could tap into a massive commercial market. 

On May 1, Ritter Pharmaceuticals reported financial results for Q1 2020. Ritter recorded a net loss of $1.7 million or $0.05 per share. It was a significant improvement over the $4.7 million / $0.58 per-share loss reported in Q1 2019.

Ritter is also working on closing its merger with Qualigen. The firm believes the move will provide meaningful value for Ritter stockholders. 

facemask stocks

The COVID-19 outbreak is creating significant opportunities in the biotech, pharmaceutical, and medical supply industries.

NovaBay Pharmaceuticals (NBY)

This tiny company produces specialized pharmaceutical products that are specifically geared towards eye care. NovaBay has a market cap of only $24.3 million, so it’s a very small company. However, the firm has consistently performed well on its earnings reports, and it recently crossed over a key technical threshold that could indicate the beginning of a long-term bull cycle.

NovaBay traded sideways for most of last year, but it skyrocketed in March it had an excellent fourth-quarter / full-year earnings call. Share prices jumped over 394% in one day. That move caused it to cross over its 200-day SMA and, since then, share prices seem to have found new support around $0.75 per share. NovaBay could be a long-term winner if it keeps the hits coming.

Helius Medical Technologies Inc. (HSDT)

This micro-cap medical device firm develops technology that boosts the brain’s ability to heal itself. The pandemic wreaked havoc on Helius share prices. However, it’s become one of the best-performing stocks over the past couple of weeks. 

On May 12, Helius announced that it had received an FDA Breakthrough Designation for its PoNS device. The device can treat gait deficiencies that are symptomatic of Multiple Sclerosis. Supervised therapeutic exercise programs could use the device as an adjunct to traditional therapy. The FDA awarded the breakthrough designation after clinical trials for PoNS produced promising results. The results were initially published on April 29. 

The breakthrough designation demonstrates the viability of Helius’s technology. If the device realizes its full commercial potential, it could be a major catalyst for long-term growth.

Document Security Systems (DSS)

This might be the most promising pick on our list, given the recent trends that are developing in the economy. Document Security Services focuses on developing counterfeit prevention products for businesses. Given the recent shift towards remote work, this company’s core business could get a lift. DSS had a very bad year and it’s down more than 80% over the past 12 months. However, shares seemed to have hit a major pivot point in March after gaining over 48% during the month.

In early March, DSS entered into a letter of intent to acquire Impact Biomedical Inc., and the news sent shares of DSS skyrocketing by 80%. It also announced plans to establish a medical real estate investment trust fund in the U.S. as part of a joint venture with another company. REITs have performed well since the COVID-19 outbreak began, so this decision could’ve been a catalyst for the rally. 

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The Pros Of Trading Stocks Under $1

Typically penny stocks under 1 dollar receive little to no coverage by Wall Street analysts. That means the stock is volatile in nature. However, this volatility of the low priced stock is what creates tremendous opportunity to see extraordinary returns.

UBIA DECFor example:

On February 3, UBI Blockchain Internet LTD (OTC: UBIA) was trading stock at around a low $0.55 in price per share.

In less than 8 months, the penny stock traded as high as $115 in price per share. If you bought $1k worth of stock back on February 3 and sold the highs on December 15, you would have made over a high $200K in profits.

The potential stock returns are extremely attractive when you can get in for cheap. Penny stocks that trade for under one dollar give every trader the power to generate big gains.

Robinhood stocks under $1

Robinhood, a top commission-free broker, does not support OTC stock trading. For this reason, using Robinhood to trade penny stocks can be a little prohibitive.

With that said, there are still many cheap penny stocks, trading for a price under $1, that can be traded using Robinhood. The problem is that you can only trade exchange-listed penny stocks, like those trading on the NASDAQ and NYSE, so there aren’t many penny stocks under $1 price to choose from.

Don’t worry, if you’re a Robinhood trader you can still trade many of the top stock picks on our list. Just look for the penny stocks list that trade on NASDAQ or NYSE and you should be able to find the stocks and the price on your Robinhood app.

Why Do Penny Stocks Under $1 Sometimes Fly?

These companies don’t have a lot of institutional ownership, so these penny stocks get practically no media attention and go virtually unnoticed by the general public. This atmosphere of indifference creates a high level of opportunities for savvy traders that are willing to do their own research.

You can find penny stocks trading for less than $1 share price on all of the major stock exchanges, including the NYSE, Nasdaq, and AMEX. In order for a company to list on the NYSE and NASDAQ, they must first meet certain accounting and compliance metrics. However, listing on an OTC market gives smaller companies more flexibility, so many of the best penny stocks trading under $1 share price are not on the list of major exchanges.

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The Negative Side To Trading Stocks Under $1

Most analysts don’t bother with cheap penny stocks, so it’s up to you to do your own research. Many “analyst” opinions of these penny stocks come from newsletters and bloggers. Most of them are not professionally qualified to give you financial advice, so you shouldn’t place too much importance on many of the analyst ratings floating around the internet for these penny stocks.

You have to become savvy at reading press releases, earning statements, and financial documents to play in this space effectively. That’s where most of the information on these types of companies can be found. Unreputable companies will often issue press releases to pump up their share prices. However, genuine press releases often give shareholders important information that can have a big impact on share prices.

If you’re new to trading it will take some time before you’re able to differentiate hype from genuine, useful information.

How To Find The Best Penny Stocks Under $1

Read and follow trends. The fastest-moving penny stocks are ones that are “trending.” If you spot a hot sector or a stock that has had an explosive upside move, look for companies in the same sector that have yet to follow the trend. For example, UBI Blockchain Internet LTD. skyrocketed after the parabolic rise of bitcoin. For most traders, it was easier to buy shares in UBI than to buy actual bitcoin. As a result, traders scrambled into UBI to try and get in on the craze.

The OTC Market website is a good place to state. You can easily see a list of the largest gainers and losers in the OTC markets. Look for penny stocks that are in the same sector making big gains. Then, look for other penny stocks in the same sector that have not yet followed along with the uptrend.

You can also go with a free stock screener for penny stocks. A stock screener helps you find the best companies meeting your criteria. When you enter the penny stock criteria, the stock screener will show you a list of stocks. You can also use it to find high volume stocks, or ones on NASDAQ and NYSE. However, take the free stock screener results you find as only a first step. Do your research to get a grasp of gainers and losers.

You can also join Stock Dork Alerts to get trending penny stocks and market news delivered directly to your inbox.

Research

Be wary of social media. There are jewels of free knowledge on penny stocks that are hidden amongst the deluge of armchair opinion on social media platforms, like Twitter and StockTwits. However, always consider the source and always do your own due diligence to find the best info or list.  Make sure to visit the company website and verify cited facts with legitimate sources. If you’re searching for a list of companies trading on the major exchanges, you can use a scanner like one found on finviz.com.

ALWAYS HAVE AN EXIT STRATEGY. If you’re buying penny stocks for a quick trade, don’t fall in love with your position. Ride the wave and move on. If the share price of the penny stocks don’t behave as you expected, don’t hesitate to exit your positions.

I hope these quick tips can help you find your own cheap penny stocks under $1! But, we want to know what you think! What penny stocks under $1 are you keeping an eye on? Leave a comment below and let us know whether you’re trading or fading dollar stocks.

Chris Dios is an American writer and entrepreneur based in the Greater NYC area.

7 Comments

  1. Chris says:

    I am in my infancy in this,still learning vocabulary n terms. Interested in otc market. Do I have to have a broker or is this something I can do myself.

    1. Chris Dios says:

      You can buy OTC stocks through most regular brokers

  2. Robert says:

    Interested

  3. Na'im A Chapman-Bey says:

    I want day trade and invest in something long term as well and receive dividends every quarter and be able to secure it

  4. Ryan says:

    Check out CETY. I’ve been playing with that one for about two years now and made quite a bit of money off of it. You can buy it for about a penny pretty often and then it fluctuates anywhere from just under a penny all the way up to 7 cents. I usually buy ten to 20 thousand at a time.

  5. Ken Haugen says:

    BEGI is looking great purchased 3000 shares friday up 360%

    1. Chris Dios says:

      Nice play! Looking at the chart, it seems you timed your buy perfectly. Congrats!

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