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.
Check out this Stocks Under $1 article for even cheaper picks.
Should You Invest In Stocks Under $2?
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.
Best Stocks Under $2 To Buy
Caixabank (OTC: CAIXY)
Caixabank is a Spanish financial services company with over 5,000 branch locations throughout Spain.
In addition to banking, they also offer insurance products.
Caixabank has a diverse portfolio of investments, including stakes in energy and telecommunications companies.
Many expert analysts are excited about Caixabank stock, which has been performing well since November.
This is because they have been able to keep their income stable despite the current economic crisis, and they have managed to remain profitable as well.
Caixabank has also committed to keeping a healthy balance sheet, as they have plenty of free cash flow on hand.
The company prioritizes financial stability, which is often a good indicator of a worthwhile investment.
Because Caixabank is a penny stock, it can be somewhat volatile when compared to other stocks in the financial industry.
However, the stock does see good volume on a day-to-day basis.
Volume is key when trading penny stocks – if a stock has low volume, each individual trade will affect the stock’s price more dramatically.
Cinedigm Corp. (NASDAQ: CIDM)
Cinedigm Corp. is a Los Angeles-based entertainment company. They have a number of subsidiaries that offer content distribution and video streaming, and they also produce their own digital cinema.
Cinedigm and their subsidiaries distribute a variety of unique independent movies, TV shows, and other forms of entertainment.
Many people have come to rely on digital streaming services for entertainment over the last few years, and Cinedigm offers unique content that many consumers may not have found on their own.
The company recently launched four new channels on Roku, which will make their content even more accessible for consumers.
Their stock price has also consistently gone up throughout July and August.
Investors have been bullish on communication stocks this year. It’s become clear that entertainment and communications technology will only become more important in the years to come.
Pedevco (NYSE: PED)
Pedevco is an energy company based in Houston, Texas.
The company’s biggest assets are currently in New Mexico and Colorado, and they have made some exciting expansions over the past year.
In the first quarter of 2021, Pedevco brought two new horizontal oil wells online, and they’ve also taken steps to enhance their current assets for more efficient production.
This has been very exciting to investors and has resulted in steady growth in their stock price.
Pedevco’s most recent earnings reports have also been very promising.
They’ve managed to increase their revenue significantly year-over-year and also have increased the amount of cash they have on hand.
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On top of that, the energy industry in general is making a recovery after struggling due to the COVID-19 pandemic.
Oil prices are increasing, which should help Pedevco’s earnings numbers even more.
Pedevco is an oil stock with plenty to offer moving forward. If you’re looking for an affordable stock in this sector, Pedevco may be a good fit for you.
ConforMIS Inc. (NASDAQ: CFMS)
ConforMIS is a company that makes customized knee and hip replacements.
They use 3D imaging and other technologies to build joint replacements that are completely unique to each patient.
These patient-specific joint replacements are more comfortable and durable than off-the-shelf replacements.
CFMS stock has been consistently improving since spring 2021, and is on a sharp upward trajectory after their second-quarter earnings report.
The company’s net income was up over 1,800 percent year-over-year, which caught the attention of investors who are interested in the medical field.
As medical technology improves and humans start to live longer, more of us will need knee and hip replacements.
Confirmis is providing a unique solution that will make these joint replacements much more comfortable for patients. They’re also proving that their business model can be financially feasible.
Best Tech Stocks Under $2
Blonder Tongue Labs Inc. (NYSE: BDR)
Blonder Tongue Labs is a telecommunications company based in New Jersey. They have been in business for over 50 years and developed some of the world’s first cable TV technology.
Today, Blonder Tongue has a diverse portfolio of clients that includes hospitality clients, institutional clients like schools and hospitals, and multi-unit dwellings.
Having a diverse range of clients is always a good sign for a penny stock, as it gives the company multiple revenue streams.
The past year has shown us just how important it is for people to stay connected and informed.
Blonder Tongue’s communications products bring broadcast television to places that may not otherwise have them.
The company’s most recent earnings report was a strong one, with both revenue and EPS up year-over-year.
Blonder Tongue has been consistently investing in their R&D for several years now, and it appears that this investment is finally paying for them financially.
The market has reacted accordingly to this positive financial news, and it will be interesting to see if this company can continue to improve their position moving forward.
Best Biotech Stocks Under $2
Stealth BioTherapeutics Corp. (NASDAQ: MITO)
Stealth BioTherapeutics is a biotechnology company that develops mitochondrial therapies. They currently have programs in place to develop treatments for Barth syndrome, age-related macular degeneration, neurodegenerative diseases, and more.
Mitochondria are an important part of human cells that generate energy.
Stealth BioTherapeutics’ treatments are designed to address mitochondrial dysfunction, which can happen with many different diseases.
This company’s stock has struggled this year, but their share price spiked at the end of August.
This is likely a result of the company’s recent filing with the FDA.
The company is seeking approval for their leading drug candidate, which would treat Barth syndrome.
Barth syndrome is a very rare genetic condition that affects the heart and the cardiovascular system. There isn’t currently any treatment available for Barth syndrome.
Investing in biotech penny stocks like Stealth BioTherapeutics can be risky, as their stock price is highly dependent on trial results and government approvals.
However, this stock could be a good pick for investors willing to take the risk.
Senestech Inc. (NASDAQ: SNES)
Senestech is a biotech company that creates pest control products.
Specifically, their products reduce fertility in pest populations to keep them from reproducing.
Their ContraPest product works on black and brown rats, and is designed to reduce infestations in urban areas.
This company takes a very unique approach to pest control, which has helped them stand out among other agricultural biotech companies.
ContraPest is not hazardous to handlers or to other wildlife species, which makes it an environmentally friendly option for pest control.
Senestech stock has gone up slightly since the beginning of 2021, although it still has plenty of room to grow.
However, some institutional investors have started buying this stock, which could bode well for their future.
In January, Senestech raised $10 million through a direct stock offering of over 4 million shares.
They plan to use the money for their general corporate expenditures.
The stock dropped in price slightly after the direct offering.
Shares have been quite volatile since then, so investors will need to be cautious with this company.
However, the company’s unique product offerings could speak for themselves in the long run.
Agile Therapeutics (NASDAQ: AGRX)
Agile Therapeutics is a biotech company that focuses on women’s health.
The women’s healthcare market is an area where there’s still plenty of room for growth.
Agile Therapeutics currently only has one product on the market, which is a weekly birth control patch.
This patch is a viable alternative to other birth control solutions like IUDs or the pill, which can present challenges for some patients.
This company’s share prices had been consistently going down in 2021, but things started to turn around in mid-August.
One reason for this could be a recent partnership with Pandia Health, a telehealth service that will make Agile’s birth control products more accessible.
This stock has a long way to go in terms of recovery, but this recent change bodes well for investors.
If you’re looking for a cheap and unique biotech stock, this option from Agile Therapeutics could be a good choice for you.
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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