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.
The Best Stocks Under $1 That Could Take Off In April 2020
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Unsurprisingly, biotech stocks are dominating this month’s rankings. However, we’re also seeing opportunities in other sectors. These stocks under 1 dollar could be big winners when the market bounces back, 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.
Heat Biologics, Inc. (HTBX)
This micro-cap biotech firm sky-rocketed this month, posting gains of more than 150% over the past 30 days. It’s one of many small firms working tirelessly to develop reliable COVID-19 testing and treatments. Heat is working on a point-of-care diagnostic test that allows on-site testing for COVID-19. Healthcare workers can administer the test with a simple mouth swab, and the test provides instant results on the patient’s condition.
The test would be an absolute game-changer for the overloaded healthcare system, so investors are betting that it will be a big moneymaker if it gets approved. However, be aware that this stock could fall fast if the company runs into any setbacks in the approval process. If you buy HTBX, you’re banking on the test getting approved, but you risk big losses if the FDA doesn’t approve the test.
Oragenics Inc. (OGEN)
Oragenics is another micro-cap biotech firm on our list this month. It’s only up slightly over the past week, but there are some encouraging technical signals that indicate it could go higher. During its most recent pullback, OGEN met solid support around its 200-day SMA and quickly rebounded to major gains. This price action could indicate that the stock is resting on a bottom and could move higher once the market heats up.
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.
Novacare 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.
GEE Group (JOB)
This tiny staffing firm has had a very rough time over the past 12 months. However, the chart is showing some signs that it could be approaching a bottom. After losing roughly 72% over the past year, GEE Group looks like it’s finally coming out of its slumber. Share prices jumped 35% in one week towards the end of March, and it could be the start of a longer-term swing move. The pop also caused JOB to cross over its 20 and 50-day SMA, so these levels could serve as support over the coming weeks.
Like many stocks under $1, this company is very small. It only has a market cap of $5.6 million, so you can expect a lot of volatility if you get in the trade. However, that sword cuts both ways, so if you can get in on the right side of it, it could land you some major gains.
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.
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.
Don’t have Robinhood? Signup with my invite code and get a free stock. It’s 100% free and there are zero account fees or trade commissions.
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.
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.
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.