A lot of traders want to hop into the stock market today, but buying and selling stocks can be very cost-prohibitive. Penny stocks offer traders with smaller budgets the opportunity to jump into the market for less than $5 a share. Want to go even lower than $5? Check out our best stocks under $1!
The Potential of Penny Stocks
Before we get into the best stocks under $1, many traders will know that cheap stocks are a whole different breed of investment, but we’re going to give a brief overview for newcomers.
Starting with the basics, penny stocks refer to a class of stocks that trade at a stock price of five bucks or lower, sometimes even a fraction of a cent.
Shares of these stocks are from companies with a lower market capitalization — usually small or even microcap.
Lastly, while penny stocks trade for under $5, the term for penny stocks trading under a dollar is known as true penny stocks.
These are the cheapest penny stocks you can buy, and they are the focus of today’s article.
Where Are Penny Stocks Traded?
There are many exchanges that will list these stocks, but they are usually traded over the counter (OTC), meaning that they’re not listed on a major exchange like the New York Stock or NASDAQ.
The Power of Penny Stocks: Volatility
People trade penny stocks primarily for their volatility.
While volatility sounds like something you always want to avoid, it’s important to remember that this pendulum swings both ways.
Sure, some penny stocks can drop like a rock, but the right stocks can lead to explosive gains.
Penny stocks can dramatically increase or decrease in value over the course of a normal trading day.
For example, if a $0.10 stock increases to $1, you can make quite a bit of cash, and this is why so many traders want to find the next breakthrough penny stock.
Keep in mind, though, that there are a lot of duds on the penny stock market, so you shouldn’t jump into this type of investing with the idea that you can become a millionaire by throwing 5 bucks here and there.
How Do You Spot the Best Penny Stocks?
So, what are the characteristics you are looking for in a decent stock under one dollar?
Well, here are a few things to watch out for:
- Try to look for a quality exchange…if possible – When looking for a quality penny stock, try to find a quality exchange. We recommend tried and true options like the NYSE or Nasdaq. If you do see a stock on the OTC Markets, we think you should stick to the OTCQX. It’s the highest tier of the OTC and has the clearest standards.
- Earnings per share – Now this may be hard to come by in the world of penny stocks, but it’s worth your time to check the EPS and see if the company is profitable. It should not be a dealbreaker, but it is good to know and might give you some level of comfort.
- Trading volume – Daily trading volume is a good indicator of other traders‘ willingness to buy. You want to make sure there is some solid volume. If you want to sell, you are going to need to make sure there is someone who will take the shares off your hands. Check the volume to make sure you have some liquidity.
Looking for some higher-priced picks for your investment portfolio? Check out the best stocks under $10.
Now that you know the ins and outs of penny stocks, let’s look at the best stocks under $1 to buy now!
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Best Stocks Under $1 with Potential
These penny stock picks are all-rounders that can be considered a worthy addition to any investment portfolio.
Keep reading if you’re looking for stocks under $1 that can provide you with solid growth in the future.
China XD Plastics Company Ltd. (NASDAQ: CXDC)
The Chinese market is full of investment potential, especially when it comes to penny stocks.
China XD Plastics is a company that develops composite polymer materials, and its products are used mostly in automotive manufacturing.
The company supplies noteworthy car brands around the world, such as Toyota, Audi, BMW, and more.
Global demand for cars has been up in 2021.
The coronavirus pandemic is slowing down, and many people are starting to resume their normal commutes again.
However, not everyone is willing to risk taking public transit, hence the need for more cars.
This increase in demand has been great for China XD Plastics.
Its stock shot up in early August, although it has cooled off since then.
This could also be due to recent changes in the car manufacturing industry.
Auto manufacturers are anticipating a shortage of microprocessors, and are trying to push out as many vehicles as possible before this hits to avoid supply issues.
If you’re interested in trading Chinese penny stocks, this is definitely one to look out for.
Although it has dipped recently, there’s plenty about this company that makes it worth watching.
The car industry is massive, and China XD Plastics is a supplier of some of the world’s largest brands.
Cyren Ltd. (NASDAQ: CYRN)
Cyren Ltd. is an Israeli company that provides global Internet security services.
The company’s services are entirely cloud-based and are designed for businesses.
Cyren has a specific focus on email security, although it offers other threat detection products as well.
Over the past few years, companies around the globe have been switching to remote work.
And this means they need new security solutions for their teams.
Having each team member work in a different place can pose added risks, which is why these security solutions are so important.
Cyren recently announced a partnership with an IT firm called Improving, which will allow them to expand the services they provide for customers.
With cloud-based security services in such high demand, Cyren is an interesting stock to watch moving forward.
Best Stocks Under 1 Dollar That Pay Dividends
In the market for penny stocks that pay dividends?
You’ve come to the right place.
Read on to find out our picks for stocks with passive income potential.
Chesapeake Granite Wash (OTC: CHKR)
The Chesapeake Energy Corporation runs a trust, which currently has a market cap of $24.6 million.
The trust owns royalty interests from Chesapeake’s oil and natural gas operations in Oklahoma.
Despite this stock’s low share price, they pay a consistent dividend of approximately $0.02 per share annually.
The share price was slowly declining for a six-month period in 2020 but started to pick up again in December.
This stock grew dramatically in price throughout the early summer, although it has fluctuated since then.
Right now, the company has a massive dividend yield of 13.46 percent.
Chesapeake Energy also has a very low price-to-earnings ratio, which sits under 12 right now.
This means that the stock is very cheap when compared to their most recent earnings report.
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The oil and natural gas industries have been very volatile this past year, and that is something that investors will want to watch out for with this stock.
However, the dividends may make it an attractive pick for some investors, which is why this is one of the best stocks under $1!
Best Biotech Stocks Under $1
Let’s talk about Biotech stocks.
Right now, many biotech companies are in their infancy, so they will trade on the penny stock market first.
These picks are some up-and-comers with technological applications that are very relevant today, as they deal in COVID-19 vaccinations and treatments.
Oragenics Inc. (NYSE: OGEN)
Although a large percentage of the U.S. population has been vaccinated against COVID-19, the virus is still at the forefront of many people’s minds.
The rise of the Delta variant has shown just how far we have to go when it comes to getting out of the pandemic.
This is where companies like Oragenics come in.
Its research teams are currently developing their own version of a COVID-19 vaccine.
Right now, over 40 percent of people in the U.S. have still not received a COVID-19 vaccine of any kind.
And there are also many other countries where vaccines are less accessible.
This means there’s still plenty of room in the market for Oragenics’ vaccine if the company can release it in time.
The company has recently partnered with the National Research Council of Canada to work on further vaccine development.
Oragenics also recently announced that they were starting a new study on its vaccine candidate.
This study will test a few different formulations of the vaccine on hamsters.
This was after a successful trial on mice.
They were also recently awarded a grant from the National Institute of General Medical Sciences, which will provide further funding for their research projects.
This vaccine is the only product that Oragenics is working on right now, which means that investing in this stock does come with some risks.
However, for investors with a high-risk tolerance, this could be an interesting pick moving forward.
Also Read: Trade Ideas Review
Therapeutic Solutions International (OTC: TSOI)
Therapeutic Solutions International is a small biotech company based in Idaho.
The company is currently developing immune system solutions that could treat serious chronic conditions like cancer.
Right now, these products are in the early phases of development and have a long way to go before they hit the market.
What investors are most excited about here is the company’s COVID-19 treatments, which are currently in testing.
This would stimulate the body’s immune response to prevent serious cases of the virus.
Also, Therapeutic Solutions recently announced that they would be partnering with Venvalo Group on their clinical trials.
This company is ambitious, and if these drugs are successful, they could have huge benefits for stakeholders.
So it’s certainly an intriguing penny stock in the biotech industry.
Best Marijuana Stocks Under $1
The increase in marijuana legalization is boosting marijuana stocks higher every day, and this shows no signs of slowing down soon.
This is what makes them some of the best penny stocks you can find on the market and why we added this industry to our list.
TILT Holdings (OTC: TLLTF)
TILT Holdings is a company that offers products and services for marijuana brands.
TILT provides essential support for the rapidly growing cannabis industry and helps its clients adjust to shifting regulations.
The largest company in TILT’s portfolio is Jupiter Research, which designs and manufactures vaporization technology.
Its other brands include Standard Farms, a medical marijuana grower in Pennsylvania, and Commonwealth Alternative Care, which makes and distributes cannabis products in Massachusetts.
In the Canadian market, the company owns Sante Veritas Therapeutics, which owns processing facilities in Vancouver as well as its own marijuana brands.
In addition to owning these brands, TILT works with cannabis companies around the world.
TILT assists with both production and distribution — two operations that can be difficult for small cannabis companies to scale up.
This stock has been trading sideways for the last few months… Can it break out in the second half of 2021?
Nextleaf Solutions Ltd. (OTC: OILFF)
Nextleaf Solutions is a Canadian company that focuses on extracting oils from dried cannabis.
These oils are used in vaping products, edibles, and other infused products.
These products are viable alternatives to smoking and have become very popular over the last several years.
Nextleaf gives cannabis companies easy access to these oils without having to invest in distilling technology.
Right now, Nextleaf has both U.S. and international patents.
As demand for infused products increases, Nextleaf could provide an essential service to up-and-coming cannabis companies.
Nextleaf is still a very new company, so it will take time for them to become profitable.
However, it fills an interesting space in the cannabis market that makes the company very intriguing and one of the best penny stocks in its industry.
Best Energy Stocks Under $1
Cheap energy stocks are on many savvy investors’ radars because of their immense growth potential.
Energy is an investment class that is never going out of style, as it fuels all aspects of our everyday lives.
With this in mind, here are some of the best penny stocks in the energy sector to keep an eye on.
Gran Tierra Energy (NYSE AMERICAN: GTE)
Gran Tierra Energy is a Canadian company with oil and gas operations worldwide.
Some of their biggest operations are in Ecuador and Colombia.
The energy market struggled through 2020.
However, many investors are bullish on the market as travel is starting to pick up again around the world, increasing demand for oil and gas.
And this is why many believe that energy stocks will be back on the rise.
Gran Tierra did have to stop production at times during 2020 due to COVID restrictions, but they’ve managed to keep their oil reserves stable to keep up with demand.
Some investors think this energy stock might be undervalued given its production and earnings.
International oil and gas prices have gone up significantly this fall, which has caused Gran Tierra Energy stock to rally.
Investors are excited about the prospect of higher revenues for these oil and gas companies.
If this stock continues to rally, it could push out of the $1 range.
Investors will want to act quickly to take advantage of this upswing.
Looking for other investment ideas? Make sure to check out our Louis Navellier Growth Investor Review.
Cheap Stocks to Buy Now Under 1 Dollar
If you’re in search of the most promising and cheapest shares on the stock market, we’ve got you covered with these next picks.
We selected these picks based on a careful blend of affordable stock price and potential.
Spectrum Global Solutions (OTC: SGSI)
Spectrum Global Solutions is a communications and cybersecurity company.
It develops essential communications infrastructure, including wireless networks, security tools, and more.
Spectrum Global Solutions recently merged with High Wire Networks, and the future looks promising for this company.
In their security department alone, High Wire Networks has seen significant monthly revenue growth as well as growth in contracts.
This will likely be reflected in the company’s financial reports in the upcoming months.
Cybersecurity solutions are in high demand right now, so it’s no surprise that this company is making progress this year.
Many companies are transitioning to remote work and need new security solutions.
If this company continues to perform well financially, it could push its stock price up even further, which is why we think it could be one of the best penny stocks.Stock Advice That Beats The Market! Stock Advisor's recommendations have beaten the market over the past 19 years. Tired of picking losers? Stock Dork readers can join for only $99 a year! Check out Stock Advisor today!
Best Stocks Under $1: Conclusion
Those are the best stocks under a dollar that we recommend for anyone on a budget.
We covered a wide range of catalysts and market events, but you should do your own research to see which ones best fit your own portfolio’s profile.
A general rule for selecting penny stocks is finding an industry that you think is poised for growth or will remain relatively stable.
Are there any stocks under a dollar that we missed?
Are there any stocks with serious growth potential that we need to know about in the nano-cap or small-cap space? Let us know in the comments below.
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