We recently put together a list of the 10 Best Penny Stocks to Buy Under $1. In this article, we will focus on Karyopharm Therapeutics Inc. (NASDAQ:KPTI) and how it compares to other penny stocks under $1.
Penny stocks are stocks that trade for less than $5 per share, as defined by the Securities and Exchange Commission (SEC). These stocks are known for their high price volatility due to their low pricing, allowing for substantial percentage gains with even small price movements. However, it is important to understand the risks associated with penny stocks. A study conducted by the SEC found that most penny stocks are speculative and have low liquidity, making them challenging to trade. Only a small percentage of penny stocks go on to become profitable mid-cap or large-cap businesses. Therefore, investing in penny stocks requires a careful assessment of the risks and potential benefits.
Penny stocks can offer significant profits, especially in industries expected to grow in the future due to technological advancements, regulatory changes, and shifting consumer preferences. One such industry is renewable energy, which has seen substantial growth in recent years. The global renewable energy industry was valued at $1.21 trillion in 2023, with a projected compound annual growth rate (CAGR) of 17.2% between 2024 and 2030. Investors looking for diversification and growth potential may find opportunities in penny stocks in the renewable energy sector.
Another potential area for investment is biotech penny stocks, offering opportunities for investors interested in medical innovation and breakthroughs in healthcare. Recent data shows that biotechnology companies raised approximately $10 billion in follow-on stock offerings in the early months of 2024, indicating optimism in the industry.
In this article, we used a stock screener to identify penny stocks trading under $1 with over 40% institutional ownership. We then selected 10 stocks with the highest number of hedge fund investors to gauge hedge fund sentiment towards these stocks. Research has shown that following the top stock picks of leading hedge funds can outperform the market.
One of the penny stocks we analyzed is Karyopharm Therapeutics Inc. (NASDAQ:KPTI), a pharmaceutical company focused on developing medications for the treatment of cancer and other diseases. Karyopharm’s main drug, XPOVIO (selinexor), is an oral exportin 1 (XPO1) inhibitor approved in the US for multiple cancer indications. The company has faced financial challenges due to high cash burns and slow revenue growth, impacting its stock performance.
Despite these obstacles, Karyopharm is making progress with selinexor, presenting promising results in key trials. The company has enough liquid assets to cover operations through 2025 and has announced significant debt restructuring. Analysts have given Karyopharm an average price target of $4.60, reflecting a potential upside of over 424.64% from the current stock price.
In conclusion, Karyopharm Therapeutics Inc. (NASDAQ:KPTI) ranks 4th on our list of the best penny stocks to buy under $1. While Karyopharm shows promise as an investment, we believe that certain AI stocks may offer greater potential for higher returns in a shorter timeframe. If you are interested in exploring AI stocks with significant potential, consider checking out our report on the cheapest AI stock.
Analyst Sees a New $25 Billion “Opportunity” for NVIDIA and Jim Cramer is Recommending These 10 Stocks in June. This article is originally published at Insider Monkey.