If you’re looking to start investing, but don’t want to spend very much money, penny stocks are a great way to start. Generally, penny stocks are considered to be any stock under $5, but in this article, we’ll be discussing the best stocks under $2.
By this, we mean that these stocks are over $1 but under $2 in price. All of the stock prices discussed in this article are as of December 2020. Check out this Stocks Under $1 article for even cheaper picks.
Investing in affordable stocks can have a big payoff if you’re strategic. In fact, many of the world’s most exciting companies were once trading under $2 per share. Investors on a budget can purchase full shares of these stocks without any sticker shock.
However, there are some things to be aware of when purchasing these affordable stocks. The first is that penny stocks tend to be very volatile. This isn’t necessarily a bad thing, but they are much more subject to the ups and downs of the market.
To profit off of these penny stocks, you’ll need to ride these waves. Look for stocks that have frequent spikes. This way, you can use a short term investment strategy, buying shares when they’re low and then selling them when they spike for a profit.
Another downside of these stocks is that they don’t always trade in high volumes, which further contributes to that volatility. Low volumes also mean that the stock isn’t very liquid. In general, when choosing penny stocks you’ll want to look for companies with a volume of at least 500,000.
There are great companies in many different industries that currently have stocks trading at under $2. Here’s which ones you should consider adding to your portfolio.
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Best Stocks Under $2 To Buy
Capstone Mining (OTC: CSFFF)
Capstone Mining is based in Vancouver, Canada. This company has mining operations in Canada, the US, Mexico, and Chile.
Capstone’s most lucrative and important projects are their copper mines, two of which are fully producing. They also mine for silver, iron, zinc, lead, molybdenum, and gold.
This company is projecting at least 50 percent growth in their copper and silver output in 2021. Their Santo Domingo project also has cobalt optionality, which is very intriguing for the future.
The materials that Capstone mines for are used in a number of different industries and technologies. Many technology companies consider silver and copper to be vital supplies for their electronics.
What makes this stock so intriguing is that they have been on a steady upward trajectory throughout this year. They are currently trading at a five year high.
Hitting this peak may be concerning for some investors, who wonder if Capstone Mining has the potential to keep climbing. However, there’s some indication that this growth could continue.
The company recently signed a streaming deal with Wheaton Precious Metals, a very successful mining company. Not only is this deal very promising for the future, but it also helps Capstone clean up their balance sheet in the short term.
Good Times Restaurants (NASDAQ: GTIM)
Good Times is a chain of fast food restaurants based in the Denver, CO metro area. They currently have 36 locations throughout Colorado and Wyoming. They are known for their delicious burgers and fries, as well as their rotating frozen custard flavors.
Although now might not seem like the best time to invest in restaurants, this one has a pandemic friendly service model. Many of their locations are drive-through only, so there’s minimal contact between server and customer. Their menu is also optimized for takeout already, so they haven’t had to make many adjustments to comply with the current requirements.
Even so, Good Times will likely benefit from increased access to the vaccine and looser coronavirus restrictions. While the stock dipped in March, it has since been on a steady upward trajectory. Their earnings have decreased year over year, but the sales for Good Times were up 11 percent.
Best Tech Stocks Under $2
Ideanomics (NASDAQ: IDEX)
Ideanomics is a holding company that is involved in a number of different ventures. They have two divisions – their Capital division and their Mobile Energy Global Division.
The Mobile Energy Global division develops electric vehicles and related technology. This division has an international presence, and they own several different companies in this field.
Electric vehicles are hitting the mainstream, and Ideanomics stands to profit from this. People all over the world are concerned about climate change, and electric vehicles are a potential solution to this problem.
The Ideanomics Capital division focuses on fintech market solutions. This is another key industry right now, as the financial services sector is working towards efficiency and innovation.
Ideanomics is involved in a diverse range of operations. This bodes well for their stock, as they have multiple streams of income to insulate them if one sector struggles.
This company’s stock also has a long history of spiking as a reaction to positive company news. This is a good thing for investors – when played well, this volatility can actually provide an opportunity for profit.
Usio Inc. (NASDAQ: USIO)
Usio is a tech company that makes payment processing solutions for merchants. One of their most exciting services is their payment facilitation. This helps software programs that want to facilitate payment do so without building their own infrastructure.
They also offer payment processing solutions that make it easier for companies to both accept payments and make payments to others. They even offer prepaid card solutions.
In today’s market, businesses can benefit from having multiple digital payment processing solutions. Customers and clients want to be able to process payments instantly with minimal effort. Usio’s services help make that a reality.
Right now, the company is poised for success. They reported their highest quarterly revenues ever for the third quarter of 2020. However, their share price is still much lower than the peaks of the last few years, which have been around $3.
Share prices could go up in the future if Usio continues their strong performance. This is one stock under $2 to keep your eye on.
Creative Realities (NASDAQ: CREX)
Creative Realities provides marketing and branding solutions for retail companies. They help retailers leverage the latest technology to better connect with their customer base.
While they began as a digital signage company, they now make a wide variety of retail solutions designed to make the shopping experience more efficient and more intuitive. Some of the notable brands they have worked with include Jeep, the Dallas Cowboys, Innisfree, and more.
The face of retail shopping is changing as more customers are switching to online shopping. However, Creative Realities is a company that could bridge the gap between online and in-person shopping. Their solutions address consumer concerns and combine the convenience of online shopping with a luxury in-person experience.
This stock is also one that stands to go up as coronavirus restrictions ease up. Many of the retailers they work with have been shut down, but as restrictions ease and the vaccine becomes more widely available, their stock could see a boost. Creative Realities is already prepared with plenty of COVID-safe solutions available to their customers.
Although this company has struggled somewhat during the pandemic, their third quarter earnings report looked promising. While their revenues decreased year over year, they did improve from the first and second quarter of 2020.
Best Biotech Stocks Under $2
Vaccinex Inc. (NASDAQ: VCNX)
Vaccinex is a biotechnology company that develops drugs and treatments designed for neurodegenerative diseases. Some of these diseases, such as Alzheimer’s, MS, and Huntington’s, don’t currently have very many viable treatments, which is what makes this company so interesting.
In particular, they are using a new treatment approach that blocks a molecule in the brain that can cause inflammation. It also has the potential to be used for cancer treatment, as it has a positive effect on tumors.
Vaccinex is currently trading at just under $2, but it has the potential trade much higher. This makes it an exciting choice for penny stock investors. Throughout the year, the stock has had multiple spikes, going up above $6. Buying now while the stock is low presents excellent financial opportunity for investors.
This company had a positive earnings report in the third quarter of 2020. The clinical testing for their product is also moving in the right direction, although the product has not been approved for medical use just yet. If the FDA fully approves their product, this stock could see a dramatic uptick in value.
Athersys Inc. (NASDAQ: ATHX)
Athersys is a biotechnology company that develops stem cell therapies. Their product, MultiStem, is designed to work in a variety of different healthcare applications. These include neurological, cardiovascular, and immune system applications.
One of the things that makes Athersys particularly exciting right now is that MultiStem could be used to treat acute respiratory distress syndrome, which is a severe side effect of COVID-19. This is one of the most worrisome symptoms of the virus, as it can lead to death. Currently, there is no treatment for ARDS.
However, MultiStem has shown promise in treating this severe condition. It will likely be several months or even a year before the COVID-19 vaccine is rolled out to everyone, so developing new treatments is incredibly important. MultiStem has been given two key designations from the FDA to move forward, hoping for an eventual full approval.
Over the years, Athersys has seen plenty of spikes. We could see another spike if there is progress with MultiStem as a treatment for ARDS. While their earnings reports this year were somewhat disappointing, the company’s medical successes could drive things back up in the long run.
Hepion Pharmaceuticals (NASDAQ: HEPA)
Hepion Pharmaceuticals is another innovative biotechnology company. They develop treatments for liver disease, hepatitis, cirrhosis, and other liver conditions.
Hepion’s newest drug is currently in clinical trials to treat liver disease as well as non-alcoholic steatohepatitis. Their shares recently rose nine percent in one day as it finished a recent round of trials and showed medical promise.
This company is unique for a penny stock, because their shares used to be very expensive. Their shares were worth well over $1,000 at their high point in 2016. Poor financial performance led to a downfall in 2017, which they have since struggled to recover from.
However, for penny stock investors, this indicates that Hepion’s shares have the potential to go much higher than they are right now. They likely won’t reach their previous peak, but if Hepion’s new drug is successful, their shares could go up in the future, even if it’s just by a few dollars.
Best Stocks Under Two Dollars: Final Thoughts
Buying stocks under $2 can be a good way for new investors to get into trading without the initial financial risk. While these stocks don’t cost much, there’s a very real potential for them to double or triple in price in a relatively short period of time. A savvy investor can leverage this to make a nice return, although it’s unlikely that your $2 stock will eventually be worth thousands.
When buying stocks at these low prices, it is very important to research the company ahead of time. You should have a good understanding of their business model and their recent performance before adding them to your portfolio. In particular, you should look at their volume, as well as their volatility over the past year or two.
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