By corporate protocol and just plain old common sense, when it comes to penny stocks to buy, your first instinct should be this: don’t. Yeah, I know that’s not exactly a sexy opener for the topic at hand. However, while all market ideas carry risks, extremely cheap securities present incredible dangers.
As neither a financial advisor nor a medical professional, I’m in no position to diagnose anything. However, what I can say is that penny stocks may present significant temptations. And these heightened emotions can lead to a spiral of trading addiction, not unlike gambling addiction.
So, it’s vital that you understand not only the financial risks but the potential damage that reckless behaviors can cause you and your family. I’m dead serious. Please do not speculate in the market because you believe it may address some underlying issue.
With all that said, speculation on rare moments may yield robust, sometimes lifechanging returns. If you have everything else in order and you happen to have some loose pocket change, these might be the penny stocks to buy.
Lineage Cell Therapeutics (LCTX)
A clinical-stage biotechnology firm, Lineage Cell Therapeutics (NYSEAMERICAN:LCTX) develops novel cell therapies for unmet medical needs. Per its public profile, Lineage’s programs are based on its robust proprietary cell-based therapy platform and associated in-house development and manufacturing capabilities. Scientifically, the entity aims to help patients mount an effective immune response to cancer.
In addition, Lineage also is developing and commercializing OpRegen, a therapeutic designed to address ocular disorders. These include advanced dry age-related macular degeneration (dry AMD) with geographic atrophy. According to Grand View Research, the global age-related dry AMD therapeutic market reached a valuation of $9.84 billion in 2021. By 2030, the sector could hit $17.99 billion.
Now, we’ve got to be crystal clear regarding the risks. Presently, shares trade hands at only 7 cents above a buck. Also, it lost 13% of equity value since the January opener. Financially, it features a relatively solid cash balance relative to debt. Still, it doesn’t exactly offer great value against traditional metrics.
However, the bottom line could be the analyst rating, a unanimous strong buy. Also, a $5.25 price target implies almost 391% upside.
A renewable chemicals firm, Gevo (NASDAQ:GEVO) specializes in advanced biofuels. Operating in the sustainability sector, the company pursues a business model based on the concept of the “circular economy,” per its public profile. Fundamentally, it’s difficult not to appreciate the underlying effort. After all, various social and political forces are pushing go-green initiatives.
Unfortunately, the relevant impetus failed to yield encouraging results for GEVO. It may be one of the penny stocks to buy but that doesn’t mean it represents an easy choice. Since the beginning of the year, shares tumbled nearly 42%. Looking at performance data by Google Finance, GEVO has lost so much value since its public market debut that the resource lists the enterprise as suffering a 100% loss.
Still, here’s the deal with GEVO. From data compiled by Precedence Research, the global advanced biofuels sector reached a valuation of $46 billion last year. By 2032, this space may hit over $1.17 trillion. Presently, Gevo carries a market cap of less than $252 million. You see where I’m going with this?
Analysts do, rating GEVO a moderate buy with a $6.53 target, projecting 516% growth.
Quantum Computing (QUBT)
Easily the most exciting idea on this list of penny stocks to buy (maybe, maybe not), Quantum Computing (NASDAQ:QUBT) specializes in the advanced field of – you guessed it – quantum computing. Per its website, the company delivers a rich suite of full-stack quantum solutions. This ranges from specialized hardware, software protocols that foster problem solving without complex programming requirements and enterprise-level custom applications.
Fundamentally, the underlying industry may spark a radical paradigm shift in digital innovations. Basically, quantum computers offer much more capacity than the most powerful “traditional” computers. According to Precedence Research, the global sector reached a valuation of $10.13 billion last year. However, analysts project that by 2030, the ecosystem could be worth $125 billion.
For speculators of penny stocks, it comes down to the anticipated math. Right now, Quantum Computing features a market cap of just under $56 million. That’s the upside. However, that’s also the risk. Priced at 75 cents per share, investors would be wading dangerous waters.
Still, Ascendiant’s Edward Woo is a believer, forecasting $9 per share. If you don’t have your calculator handy, that’s almost 1,102% up from Thursday’s close.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.