Best Stocks Under 1 Dollar
Stocks trading for less than one dollar provide some unique benefits to investors. With share prices that low, investors can afford to load up on shares so they are more exposed to small movements in the stock. This translates to increased exposure to both risk and reward, so stocks under 1 dollar are great for speculative investors and small-budget traders.
In this brief article, we will explore some of the best stocks under $1, and teach you the skills you need to find them on your own.
Seven of The Best Stocks Under $1 That Could Take Off In 2019
( NASDAQ: AVEO) – This biotech company develops and commercializes treatments for cancer and other diseases. The firm’s most promising treatment is tivozanib, a kidney cancer treatment. Tivozanib, also known as Fotivda, is still being clinically evaluated, but early results have been encouraging.
AVEO has had a rough 2019. The company decided to delay its new drug application for Fotivda because of uncertainty surround FDA approval for the application. The FDA communicated with the company that it wasn’t happy with the results of the ‘overall survivor’ data from the drugs TIVO-3 study that was released last November.
AVEO decided to pull its new drug application in the U.S. because of the regulatory concerns. When the news broke in January, AVEO shares plummeted by over 50%. Share prices struggled to break out for the rest of the year, but there’s a catalyst around the corner that could set this cheap stock in the right direction.
The biotech firm scheduled an additional ‘overall survival’ study for August of 2019, but the results won’t be in until the fourth quarter. The outcome of this study will be critical for the future of this cheap biotech stock because it will determine how the company will approach the new drug application for Fotivda.
If Fotivda is a flop, AVEO has other promising treatments in its pipeline that could make a difference for the stock. Fotivda has already been approved in the EU and it is currently available in several European countries. The firm also has a partnership with Bristol-Myers (BMY) to clinically evaluate Fotivda in combination with BMY’s Opdivo for the treatment of advanced kidney cancer.
( NASDAQ: CPST) – Capstone Turbine manufactures turbines and other specialized industrial power equipment. The company designs, builds, sells and services micro-turbines used in stationary distributed power generation applications. Capstone also sells accessories and miscellaneous parts for its products.
Capstone is becoming a popular service partner within the U.S. oil & gas industry. The company supplies and services generators to supply primary power for midstream central gathering facilities. According to CEO Darren Jamison, “The transition of oil and gas customers to Capstone FPP service contracts is a strong indicator for the continued growth of our aftermarket service business,” and “The aftermarket service business was approximately 38% of Capstone’s total fiscal 2019 revenue and accounted for approximately 98% of the gross margin,”
Services agreements are an extremely profitable business for Capstone, so the firm’s recent success has some analyst predicting that profitability isn’t far off. Consensus estimates from 6 sector analysts predict Capstone will complete its first profitable year of operations in 2022, but some say that projection is too optimistic.
Capstone investors received more good news in August. The company announced a sizeable energy efficiency project in Bolivia and became the first microturbine manufacturer to be certified under the U.K. Energy Networks Association G99 grid connection standard. The company reports earnings on August 19th, so keep an eye on the stock this month.
( AMEX: GSAT ) – Globalstar is a telecommunications company that specializes in providing satellite-based mobile voice & data services to customers across the globe. It has a rather large market-cap in comparison to our other stocks, with a valuation of about $570 million.
GSAT’s satellite service penetrates markets where traditional mobile services are not available. As a result, they could grab up a lot of share in emerging markets with poor telecom infrastructure.
The company missed on earnings in both Q3 & Q4 in 2018. As a result, the stock is trading within $.15 of its all-time lows, but this cheap stock could be an overlooked gem. Also, its RSI is creeping towards oversold. It could be an indicator that the selloff was overdone.
GSAT released earnings on August 9th and reported all-time highs in total subscribers. Additionally, its commercial IoT business grew its client base by 16%. GSAT stressed the underlying growth of its IoT business and predicted a strong second-half performance in 2019.
For a stock that costs less than one dollar, GSAT is an interesting way to get exposure to emerging telecom markets. In terms of reward potential, it could be one of the best telecom stocks around but, like most dollar stocks, there are significant volatility risks.
Real Goods Solar Inc.
( OTC: RGSE ) -Real Goods Solar provides solar services to both residential and commercial clients. Residentially, RGSE installs solar panels and also offers lease financing. The company also manufactures solar panels under the brand name POWERHOUSE.
To help sell its products efficiently, the firm outsources sales and marketing to cut costs and keep operations streamlined. It also maintains several distribution channels so its supply chain is diversified enough to work around small disruptions.
Like most of the other stocks on this list, RGSE had a rough first half of 2019. Missed earnings for Q2 & Q3 2018 sent shares into a deep rut. However, RGSE has been on a tear lately. Share prices rallied more than 290% between May and early July.
The company was delisted from the NASDAQ last year, but management says the company is once again compliant. The firm submitted paperwork to reinitiate the listing process earlier in the year.
In August, a builder partnership selected RGS Energy as one of its manufacturer members. The network includes over 1,4000 homebuilders, so it could generate significant sales growth for RGSE.
Northern Dynasty Minerals Ltd.
( AMEX: NAK ) – Northern Dynasty is a mining company. It’s primary asset holdings are included under its Pebble Project, holding over 2,000 mineral claims and covering over 400 square miles of Southwest Alaska. Their principle mines produce copper, gold, molybdenum, and other minerals.
This mining stock opened up 2019 with a nice rally that carried it all the way to March. Since then, it back around near its 2018 lows. Now, it’s struggling to get its feet back under it. However, the market proved that this stock can generate some gains if it gets going again, so it’s worth watching.
The company has been under some pressure lately regarding the environmental impact of its Pebble Project mine in Alaska. But, share prices rallied recently after the EPA announced it would “reconsider” Obama-era restrictions that halted the development of the mine. The EPA ordered the site shuttered in 2015 over concerns that the project would harm waterways that flow into Bristol Bay, the home of the world’s largest salmon fishery.
Northern Dynasty is pushing hard to get the mine back open, emphatic that the mine is safe. The firm recently reached a limited ‘right of way’ deal with Iliamna Natives. Plus, the EPA is re-starting the process to withdraw the restrictions on the Pebble Project.
If Northern gets that mine open, there’s no telling how high this one could run before it runs out of steam. In August, Northern closed its bought-deal offering after raising approximately $11.5 million in gross proceeds. The capital good help NAK finance further expansion.
The Pros Of Trading Stocks Under $1
Typically stocks under 1 dollar receive little to no coverage by Wall Street analysts. That means they are volatile in nature. However, it’s this volatility that creates tremendous opportunity to see extraordinary returns.
On February 3, 2017, UBI Blockchain Internet LTD (OTC: UBIA) was trading at around $0.55 per share.
In less than 8 months, the stock traded as high as $115 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 $200K in profits.
It’s these type of returns that draw so many people into stocks that trade for under one dollar.
Robinhood stocks under $1
Robinhood, a commission-free broker, does not support OTC stock trading. For this reason, using Robinhood to trade stocks under one dollar can be a little prohibitive.
With that said, there are still many cheap stocks, trading for under $1, that can be traded using Robinhood. The problem is that you can only trade exchange-listed stocks, like those trading on the NASDAQ and NYSE, so there aren’t many stocks under $1 to choose from.
Don’t worry, if you’re a Robinhood trader you can still trade many of the picks on our list. Just look for the stocks listed that trade on NASDAQ or NYSE and you should be able to find them on your Robinhood app.
Why Do Stocks Under $1 Sometimes Fly?
These companies don’t have a lot of institutional ownership, so these stocks get practically no media attention and go virtually unnoticed by the general public. This atmosphere of indifference creates opportunities for savvy traders that are willing to do their own research.
You can find stocks trading for less than $1 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 stocks trading under $1 are not listed on the major exchanges.
The Negative Side To Trading Stocks Under $1
Most analysts don’t bother with cheap stocks, so it’s up to you to do your own research. Many “analyst” opinions of these 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 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 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 the largest gainers and losers in the OTC markets. Look for stocks that are in the same sector making big gains. Then, look for other stocks in the same sector that have not yet followed along with the uptrend. You can also join Stock Dork Alerts to get trending stocks and market news delivered directly to your inbox.
Be wary of social media. There are jewels of knowledge 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. Make sure to visit the company website and verify cited facts with legitimate sources. If you’re searching for 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 a stock for a quick trade, don’t fall in love with your position. Ride the wave and move on. If the share price doesn’t behave as you expected, don’t hesitate to exit your positions.
I hope these quick tips can help you find your own cheap stocks under $1! But, we want to know what you think! What 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.
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