In this article, we will explore the top 12 penny stocks to consider buying for under $1. As we enter the third quarter earnings season, investors are feeling optimistic about the market’s potential for ending 2023 on a positive note. Despite previous recession calls and warnings throughout the year, experts like Shannon Saccocia from NB Private Wealth and Neil Hennessy from Hennessy Funds are hopeful about the market’s performance due to a strong economy, robust earnings, and resilient consumer spending.
Small-cap stocks and penny stocks tend to thrive in a positive market environment, attracting investors looking for higher returns. In this context, we have compiled a list of penny stocks favored by hedge fund investors. However, some analysts remain cautious about the future, anticipating the real impact of rate hikes to be more visible in the next year, potentially leading to the collapse of some businesses.
The biotech industry, particularly biotech penny stocks, has been gaining momentum in recent years. Reports show a significant increase in R&D budgets within the healthcare and biotech sector, resulting in major breakthrough drugs. Major healthcare companies are now leaning towards acquiring smaller biotech firms rather than investing heavily in in-house research and development.
Hedge funds, venture capitalists, and mutual funds approach biotech investing differently based on the stage of the drug development process. While early-stage VC funds invest in pre-clinical and Phase I stages, mid-stage VCs focus on Phase I-III of clinical trials. Specialist biotech investors, likely hedge funds, invest in smaller market cap businesses concentrated within the clinical trial phase. Generalists and mutual funds typically invest in larger cap companies with a more diversified mix of assets and lower early-stage risk.
To identify the best penny stocks under $1, we analyzed data from 910 hedge funds and selected 12 stocks with the highest number of hedge fund investors. These stocks are considered the top penny stocks under $1 to buy according to smart money investors.
Some of the standout penny stocks on our list include Invitae Corporation (NVTA), Nektar Therapeutics (NKTR), Jasper Therapeutics, Inc. (JSPR), Amarin Corporation plc (AMRN), Chimerix, Inc. (CMRX), Gossamer Bio, Inc. (GOSS), and Kezar Life Sciences, Inc. (KZR). These companies are actively involved in developing treatments for various diseases and have garnered interest from hedge fund investors.
Overall, the future looks promising for penny stocks under $1, especially in the biotech sector. Investors should conduct thorough research and consider their risk tolerance before investing in these speculative stocks.