There are many mythical, rags-to-riches stories about people who became wealthy after investing in stocks. Many of these stories revolve around people who gained an incredible amount of wealth by purchasing penny stocks — stocks priced under $5.
A true investor is always searching for earning potential across the board. Investing in undervalued stocks and riding them to full profitability is everyone’s dream. There are many mythical, rags-to-riches stories about people who became wealthy after investing in stocks. Many of these stories revolve around people who gained an incredible amount of wealth by purchasing penny stocks — stocks priced under $5.
Stock Market Investment
Is it a good idea to invest in stocks under $5? It depends, I suppose. Unless you’ve developed a discernible sense of how to invest money, or if you have trustworthy guidance, you should not buy stocks.
The stock market offers excellent investment potential, and it’s reportedly as sound as real estate if you have the right knowledge. The stock market fluctuates (sometimes wildly), but in some ways, stock prices have outperformed real estate over the last several decades.
If you know what you’re doing with stocks, you can gain tremendous profits, build immense wealth, and achieve a great deal of financial success. The opportunity to make huge gains on stocks under $5 is particularly compelling.
“A lot depends on research”
The best investment strategy is to never put all your eggs in one basket. Though there is no consensus on the exact percentage, most experts agree that most of your portfolio should be invested in solid, stable companies. Having said that, stocks under $5 can be a great place for doing some value investing and increasing your cash.
Why Stock Under $5
It seems inherently cheap to purchase a stock priced at $5 or less, in contrast to its competitors. For instance, an investor could buy many hundreds of shares in cheaper stocks for the price of one share of Tesla Inc. (TSLA).
When deciding whether to purchase shares, investors should probably consider the market capitalization and the price. Thus, it makes sense to highlight the best options that are available to traders who prefer cheap stocks. Often, a company that sells its stock for less than $5 is suffering from a recession. They can return many times the amount of their entry price if they are able to turn things around.
In general, buying stocks at a discount is a great idea, provided they have strong fundamentals. Investing in stocks under $5 can be profitable, but finding them is surely not easy. In the wake of the Coronavirus scare, companies are improving their operating capacity and trying to erase the specter. So, you can really hit the jackpot if you can get under $5 stocks and lock them in before the market takes off.
We will look at some outstanding stocks that are available right now for very low prices.
Best 5 Stocks Under $5
- Dogness (Intl) (NASDAQ: DOGZ)
As a manufacturer and distributor of pet-related products, Dogness (International) Corp offers a line of fashionable and high-quality products for dogs and cats. A few of the company’s merchandise offerings include Smart Feeding Series, Smart Fun Series, Healthy Water Series, and Smart Tracking Series.
With the Internet of Things, Dogness (Intl) (NASDAQ: DOGZ) is moving towards revolutionizing the pet industry. The company’s flagship product line focuses on intelligent feeding for cats and dogs. With Dogness’ feeding units, you can watch pets remotely, monitor their eating habits, and see how much food remains. With the Dogness app, pets’ habits can be tracked to make sure that everything is in order. Mainland China accounts for most of its revenue, although the company also generates a lot of money from markets like the United States, Europe, Australia, Canada, South, and Central America, Japan, and other Asian countries and regions.
- Waitr Holdings (WTRH)
U.S.-based Waitr Holdings delivers food is on number 2 in our list of Stocks under $5. Waitr keeps marketing costs low by focusing its marketing efforts in smaller cities, where it is more likely to gain market share and grow. Deliveries grew dramatically last year, resulting in significant profits for the company. As it turned out, Waitr turned a profit, which is rare for companies to offer home delivery services.
Meanwhile, Waitr’s competitors are much bigger and stronger, so investors are understandably concerned about whether it will compete. It’s probably because of that the stock is currently priced around $2. According to Waitr’s revenue scores, despite the keep-at-home tailwind is waning, its revenues are on the up. In fact, Waitr has a splendid chance of establishing itself as a pretty decent niche player or a target for acquisition by a bigger company.
- Ambev SA (NYSE: ABEV)
The publicly traded firm, Ambev, is a subsidiary of the global brewing giant Anheuser-Busch InBev (BUD). In terms of markets, Ambev primarily serves South America and Canada. Ambev’s performance has lagged other brewing companies over the past few years due in part to falling oil prices, which have resulted in a slump in its primary markets, such as Brazil. But oil, metals, and grains are all on the rise this year. Brazil and Argentina, which are key Ambev geographies, should benefit from this trend. In the meantime, Ambev has more cash on hand to weather market downturns.
Additionally, it holds over 50% of the beer market share in many countries, such as Brazil. The stock has gone from $7 to less than $4 over the past few years, but it may quickly return to its previous levels as Latin American economies recover. Moreover, World Cup next year could be a catalyst for an increase in stock prices as well.
- Fluent (NASDAQ: FLNT)
As part of its outcome-based marketing approach, Fluent provides customers with revenue-generating opportunities. The world of advertising has undergone significant changes as a result of digitalization and technology.
The eruption of the COVID-19 pandemic was a major concern for the advertising industry. Fluent could be on the road to recovery thanks to improved economic metrics. Sales of $310.7 million were achieved in 2020 by the firm, an increase of over 10% from the year before.
- Atossa Therapeutics (NASDAQ: ATOS)
Biopharmaceutical company Atossa Therapeutics has its headquarters in Seattle is on number 5 in our list of best stocks under $5. The company is currently engaged in developing COVID-19 therapies for breast cancer. The biotech sector is full of penny stocks, with a long way to go before their products reach the market.
Atossa, however, is not one of those companies. Their breast cancer and COVID-19 products are currently in trial stages. Since the company was established in 2008, both products have worked well. Investors have been particularly interested in Atossa’s COVID-19 treatments. It has become apparent that society will be fighting COVID-19 for many years to come, with new variants popping up around the world.
As of this writing, two COVID-19 products are being developed by Atossa. The first is a nasal spray that patients with mild symptoms can use shortly after being diagnosed to help reduce their chances of getting serious symptoms.
For patients with more serious COVID-19 symptoms, there is an intensive therapy that can improve lung function. Atossa’s share price will be affected most by the results of clinical trials for all its products, which will make up the bulk of the share price over time.
Stock market traders should realize that there is a wide range of options to consider, and investing in undervalued businesses is only one of them. Investing in stocks that pay dividends, for instance, gives investors an opportunity to earn solid cash flows through the return on each share of the company. Another viable option is to buy shares in a specific industry, such as tech stocks, and they may ride the market up and down as they flip stocks for a profit.
No matter which stock trading strategy you use, penny stocks can offer a lot of value for their undervalued price, if you trade them wisely.