Do you know the best Penny stock to buy this year? This simply refers to shares that, prior to the SEC’s reclassification, traded for “pennies on the dollar”. Penny stocks can include the securities of certain private companies with no active trading market.
Since penny stocks are inexpensive, investors often buy large quantities of shares without spending much money.
This tendency makes the penny stock market volatile. Most of the penny stocks belong to companies with a relatively smaller market capitalization;
These include small-cap companies with a market capitalization between $ 2 billion and $300 million.
Best Penny Stocks to Buy in 2022.
Apart from tech-related penny offerings, other high-growth domains like biotech and space have also witnessed many success stories.
Retail investors can attribute some of this success to their interest in growth stocks.
These investors command great sway over the overall market dynamics this year.
1. eMagin Corporation (NYSE: EMAN)
The jump in semiconductor prices this year has helped chip stocks reach new highs. eMagin Corporation (NYSE: EMAN) is one such firm.
It is placed eleventh on our list of 11 best penny stocks to buy according to hedge funds. Penny Stock to Buy!
The company beat market expectations on earnings per share in the second quarter by $0.03.
2. Ideanomics Inc. (NASDAQ: IDEX)
Electric cars have taken the world by storm in the past few years, driving policy changes at the highest level as fossil fuel-based alternatives go out of fashion.
Ideanomics, Inc. (NASDAQ: IDEX) is a company that has taken advantage of this boom, building a business that drives the adoption of EVs by offering fintech products in this regard.
The company beat market expectations on revenue in the second quarter by over $2 million and reported a 606% year-on-year increase in revenue during the period.
3. Exela Technologies Inc. (NASDAQ: XELA)
Investment advisors like B Riley and Cantor Fitzgerald have positive ratings on Exela Technologies, Inc. (NASDAQ: XELA).
This is because the company benefits from increased spending on digital business process services in the post-pandemic economy.
Exela Technologies, Inc. (NASDAQ: XELA) beat market expectations on earnings per share in the second quarter.
Out of the hedge funds being tracked by Insider Monkey, New York-based investment firm Luminus Management is a leading shareholder in Exela Technologies, Inc. (NASDAQ: XELA) with 1.3 million shares worth more than $3 million.
4. Outlook Therapeutics Inc. (NASDAQ: OTLK)
Outlook Therapeutics, Inc. (NASDAQ: OTLK) is ranked eighth on our list of 11 best penny stocks to buy according to hedge funds.
HC Wainwright analyst Douglas Tsao in early August reiterated a Buy rating on the stock and boosted the price target to $6 from $5.
The upgrade followed strong results from a drug study showing the statistically significant superiority of Lytenava over Lucentis, treatments for vision impairment.
5. Eloxx Pharmaceuticals Inc. (NASDAQ: ELOX)
A drug developed by Eloxx Pharmaceuticals, Inc. (NASDAQ: ELOX) to treat cystic fibrosis patients was recently given Fast Track status by the drug authority in the US.
The drug is presently in Phase 2 clinical trials. Swiss pharma giant Roche Holding holds a 5% stake in the company through a subsidiary, according to a regulatory filing submitted in June.
Penny Stock Trading of 2022 Updated
The investing information provided on this page is for educational purposes only.
NerdWallet does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks or securities.
They are shares of small companies also known as microcap stocks that trade outside of major stock exchanges and brokerages may charge additional fees to trade these often volatile shares.
Choosing a Penny Stock Broker
NerdWallet does not recommend taking on the risks that come with trading penny stocks unless you are a sophisticated investor and you understand this market.
You’ll also want to be aware of the following when selecting an online broker to trade penny stocks:
Volume Restrictions: Besides trade surcharges, there may be volume restrictions.
Some, such as Fidelity or Firstrade, offer unlimited shares without additional fees, but a few charge more for large orders.
For Example;
TradeStation’s $0 commission applies to trades of 10,000 shares or less.
Some brokers also limit the number of penny stock shares you can trade in one order or in one day, slowing your ability to trade and forcing you to pay another commission for a second order.
Trading Restrictions: Watch out for firms that require you to trade penny stocks by placing a phone order or that impose limits on the trades you can execute.
Ideally, your penny stock broker will allow you to trade penny stocks with the same online platform used for other stock trades. Penny Stock to Buy in 2022!
Read Also: Things to Keep in Mind While Buying Penny Stocks
Best Broker for Penny Stocks
Interactive Brokers’ very low per-share trading commission of $.005 ($1 minimum per trade) and up-to-the-split-second real-time margin calculations are ideal for penny stock traders.
IBKR Lite clients can trade penny stocks for $0.
Charles Schwab
Schwab’s research pages point out the exchange on which a stock trades which will keep you informed of the inherent risk.
There are a variety of platforms available; the Street-smart platforms have customizable charting and streaming real-time quotes.
Schwab does not charge trading commissions on all stocks (including penny stocks) and ETFs.
Pros:
1. Excellent screeners available on Street-smart Edge
2. Free access to an array of news feeds
3. Strong customization and personalization options on Street-smart Edge
Cons:
1. The sheer number of features and reports available is sometimes overwhelming
2. Transaction history for just 24 months online
3. Uninvested cash not swept into a money market fund
Penny stocks are volatile and can generate catastrophic losses. Price levels in this article are hypothetical and do not represent buy recommendations or investment advice.
Keep in mind that it’s your responsibility to make trading decisions through your own skilled analysis and risk management.
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