When someone says the words “penny stocks,” what comes to mind? Are you thinking of shares of a company trading for pennies, or do you think about something else? According to the Securities & Exchange Commission, penny stocks are defined as shares of a company trading for less than $5. It may seem arbitrary, but that is the definition that the Commission has given. For this article, we’ve got a short list of penny stocks, all trading for less than $5. The biggest question right now is, are they worth the risk?
That last question I will leave up to you to answer. But keeping certain market trends in mind, they could be popular stocks to watch this week. While it’s a quiet week for economic data, we do have a few events to note. Mainly Federal Reserve Chair Jerome Powell is set to give testimony in front of the Senate Banking Committee on Tuesday and House of Representatives Financial Services Committee on Wednesday. This could shed more light on what the Federal Reserve is thinking about the future of the economy and could give insight into the prospects of any inflationary measures that could come into play.
Meanwhile, starting the week, broader markets have sold off before the Monday morning opening bell. The S&P and Nasdaq benchmark ETFs, SPY & QQQ, were both down considerably from their Friday closes. One ETF, however, stood out among the group, which was the Russell 2000 Small-Cap ETF (NYSE: IWM).
While it had closed the week at $225.19, premarket trading had the ETF barely off that level, hovering around $224 before the bell. Given the focus on stimulus helping smaller companies and the push for Biden’s Administration to lend a hand, smaller stocks have gotten a nice boost. That trend appears to remain consistent heading into the final week of February.Penny Stocks To Buy [or avoid] Under $5
- Citius Pharmaceuticals Inc. (NASDAQ: CTXR)
- India Globalization (NYSE: IGC)
- Adamis Pharmaceuticals (NASDAQ: ADMP)
- Opko Health Inc. (NASDAQ: OPK)
Shares of Citius Pharmaceuticals continued higher on Friday, and that trend has remained in play during Monday’s pre-market session. Last week the company announced the closing of a $76.5 financing round to put to work in pre-clinical and clinical development of its product candidates, among other things.
The company has taken up a developmental strategy hinged on 3 product platforms. These include Mino-Lok®, which is expected to be analyzed and reviewed by the Data Monitoring Committee next quarter. Its Halo-Lido IND is expected next quarter with a Phase 2b protocol to be filed thereafter.
Finally, its Mino-Wrap is in pre-clinical development with plans to submit an IND to the FDA by the end of the year. All of these are being advanced for their antibiotic or inflammatory applications. Obviously, with many milestones set for the next several months, CTXR could be one of the biotech penny stocks to watch.India Globalization
We can’t ignore the growing trend that marijuana stocks are experiencing right now. The Biden Administration has been very vocal in its support for legalization and/or decriminalization efforts. Needless to say, the biotech side of the industry remains a popular point of interest. India Globalization has focused on using a tetrahydrocannabinol-based treatment in things like Alzheimer’s disease.
This week the company announced a progress update on its THC-based Phase 1 clinical trial approved by the FDA last year. Ram Mukunda, CEO of IGC, explained, “While it has taken a long time to get to this trial, with many hurdles crossed along the way, including restrictions due to the Covid-19 pandemic, we are excited to have begun administering IGC-AD1, which uses a plant-derived cannabinoid, in an active trial. While others have focused on CBD (cannabidiol), the non-psychoactive component of cannabis, our trial is focused on THC, the psychoactive component.”
Friday’s trading session was the first clear green day IGC stock has had in the last few weeks. Monday’s pre-market session continued echoing a similar trend.Adamis Pharmaceuticals
Similar to other names on this list, Adamis took off strong on Monday morning. Shares ended up spiking to highs of $1.58 before the opening bell. This surge in momentum continued the strong uptrend that the penny stock has been in since the start of the year. The move also came on the back of news.
Monday, Adamis announced the FDA completed the safety review of its Investigational New Drug application. The Administration has concluded that Adamis may move forward with its proposed clinical investigation of Tempol. This is the company’s treatment of COVID-19. The clearance to proceed follows the submission of an IND application to the FDA and a Pre-IND meeting.
Dr. Dennis J. Carlo, President and Chief Executive Officer of Adamis Pharmaceuticals, said that “As the virus continues to mutate, it is likely that this will have a negative impact on viral neutralization. This highlights how critically important it is to develop new therapeutic products. The consequences of cytokine storm caused by COVID-19 remain a major burden on our healthcare system, with few treatment options available…If this trial is successful, we would likely petition the FDA to consider Emergency Use Authorization for Tempol as a therapeutic treatment for COVID-19.”Opko Health Inc.
Finally, Opko Health seems to have bounced off its 50-day moving average on Friday, continuing that trend during Monday’s pre-market session. The penny stock dropped after the company reported its latest round of earnings. However, a bounce has ensued so far, thanks to some recent news.
- Top 5 Penny Stocks On The Q1 Watch List Up As Much As 758% In 2021
- Penny Stocks To Watch Before March 2021
Opko announced on Monday that its BioReference Laboratories is participating in the NY Forward Rapid Testing Program. It opened eight locations offering COVID-19 rapid testing around New York. This program is designed to provide New Yorkers and those visiting with inexpensive and rapid COVID-19 testing.
Obviously, testing is the first step in identifying the spread of COVID-19. This collaboration brings BioReference’s test to a new level of exposure. NY Forward is a collaboration with The Empire State Development Corporation, The Real Estate Board of New York, CVS Pharmacy, and BioReference.Penny Stocks To Watch This Week
We’re sure to see volatility in the stock market this week. Whenever there are headlines related to the Federal Reserve, the market watches. We know that small-cap stocks have been generating lots of attention, so it may not be a bad idea to have certain stocks under $5 on your watch list before the end of the month.