Biotech penny stocks are low-priced shares in small companies that use biological systems and living organisms to create and develop new products and treatments. These stocks are known for their high volatility and potential for significant returns, driven by factors such as clinical trial results, regulatory approvals, and sector-specific news. But watch out — these sketchy stocks have a propensity to dilute their float to raise cash, tanking share value in the process.
Table of Contents
- 1 5 Biotech Penny Stocks To Watch
- 2 What Are Biotech Penny Stocks?
- 3 Is It a Wise Decision to Invest in Biotech Penny Stocks?
- 4 Top Biotech Penny Stocks to Watch
- 4.1 Biotech Penny Stock to Watch #1: Ocean Biomedical Inc (NASDAQ: OCEA) — The Former Runner That I’m Happy I Kept on My Watchlist
- 4.2 Biotech Penny Stock to Watch #2: Ainos Inc (NASDAQ: AIMD) — The Super Low Float Biotech Penny Stock
- 4.3 Biotech Penny Stock to Watch #3: Ventyx Biosciences Inc (NASDAQ: VTYX) — The Weight Loss Hot Sector Biotech Stock
- 4.4 Biotech Penny Stock to Watch #4: Helius Medical Technologies Inc (NASDAQ: HSDT) — The Medical Device Stock That You Can Now Get Reimbursed For
- 4.5 Biotech Penny Stock to Watch #5: Renalytix PLC (NASDAQ: RNLX) — The AI Testing Biotech Stock
- 5 Biotech Stocks Under $5
- 6 What Is the Best Biotech Stock To Buy Right Now?
- 7 Get the List of Penny Stocks I’m Watching Delivered to Your Inbox
- 8 Things You Need to Know Before Investing in Biotech Penny Stocks
- 9 How To Trade Biotech Penny Stocks The Right Way
- 10 Biotech Penny Stocks: The Bottom Line
- 11 Biotech Penny Stock FAQs
5 Biotech Penny Stocks To Watch
My top biotech penny stock picks for February — rated on chart pattern, price action history, and news — include the following:
Stock Ticker | Company | Performance (YTD) |
---|---|---|
NASDAQ: OCEA | Ocean Biomedical Inc | + 937.90% |
NASDAQ: AIMD | Ainos Inc | - 34.90% |
NASDAQ: VTYX | Ventyx Biosciences Inc | + 239.76% |
NASDAQ: HSDT | Helius Medical Technologies Inc | - 29.98% |
NASDAQ: RNLX | Renalytix PLC | + 200.00% |
The penny stocks on this list are some of the wildest movers on the market …
Trading any of these stocks should be approached with a clear strategy and an understanding of the risks involved. I don’t trade until I see a setup I like.
Jump ahead to get to my trading plans for these top biotech penny stocks!
What Are Biotech Penny Stocks?
Biotech penny stocks refer to shares of small biotech companies that trade for less than $5 — stocks in pharmaceutical companies with drugs in development. Recent biotech spikers have come from the following areas:
- Companies working on COVID-19 vaccines and tests
- Companies working in pandemic relief and control
- Firms researching cancer medicines and immuno-oncology drugs
- Companies developing medicines for rare disorders
These companies are usually desperate for cash from investors. They need it to send their products through multiple phases of testing and stages of trials.
That’s their focus in the markets — to keep stock prices high by selling their progress. When their share prices grow enough, they’ll dilute to cash in, leaving bag holders with big losses…
They’re known to be extremely volatile. One minute they’re flying high on positive headlines — the next they’re down due to bad trial results, side effects on patients, FDA approval issues, or stock dilution.
That’s why I ride the hype but never believe it.
Penny stocks are some of the sketchiest stocks in the market. They suck in newbies with their upside, and these newbies start to believe as share value increases…
There are ways to profit off biotech stocks — as long as you know how the niche works. I learned by making my own mistakes.
I started trading in high school. By the time I graduated college, I had grown my small account from $12,415 to roughly $2 million. I also made some world-class blunders. Read all about it in my best-selling no-cost book, “An American Hedge Fund.”
I’ve now made over $7.4 million in profits. So far, I’ve taught 31 millionaire students how to trade with a small account in my Trading Challenge.
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Is It a Wise Decision to Invest in Biotech Penny Stocks?
These stocks are high-risk, high-reward plays in the biotech industry, offering potential for significant gains but also carrying substantial risk. In this article, we’ll delve into the pros and cons of investing in biotech penny stocks, the factors to consider, and why some biotech penny stocks might be better picks than others.
While the focus here is on biotech stocks, you might be wondering if penny stocks can be a long-term investment. The answer is nuanced. While they’re generally considered short-term plays, there are exceptions. Want to know more about how to approach penny stocks for the long haul? Here’s a guide that delves into long-term strategies with penny stocks.
Top Biotech Penny Stocks to Watch
My biotech stock picks for March 2024 are:
- NASDAQ: OCEA — Ocean Biomedical Inc — The Former Runner That I’m Happy I Kept on My Watchlist
- NASDAQ: AIMD — Ainos Inc — The Super Low Float Biotech Penny Stock
- NASDAQ: VTYX — Ventyx Biosciences Inc — The Weight Loss Hot Sector Biotech Stock
- NASDAQ: HSDT — Helius Medical Technologies Inc — The Medical Device Stock That You Can Now Get Reimbursed For
- NASDAQ: RNLX — Renalytix PLC — The AI Testing Biotech Stock
Disclaimer: This is a watchlist, not a forecast. There’s no guarantee these stocks will offer a trading opportunity or help you hit your trading targets. Keep them on your watchlist, but only trade when you see YOUR best setup.
When there are no truly great trades, use your time to study.
- New to penny stocks? Start with my FREE online guide here.
- Learn how to build your own stock watchlist here.
- Brush up on your pattern knowledge here.
Here’s some background info on biotech penny stocks:
- What is the most promising biotech penny stock?
A stock with a lot of volatility like Ocean Biomedical Inc (NASDAQ: OCEA) is a good bet for the most promising biotech penny stock. Remember, we’re traders, not investors. We’re watching the stocks on this list for short-term moves, not predicting which of these stocks will still be around in 2030.
- What are the top 3 biotech penny stocks to buy now?
My top 3 biotech penny stocks to buy now (as long as their price action is strong) are Ocean Biomedical Inc (NASDAQ: OCEA), Ainos Inc (NASDAQ: AIMD), and Ventyx Biosciences Inc (NASDAQ: VTYX).
- Which biotech penny stocks have a “Strong Buy” analyst rating?
Analysts don’t give any biotech penny stocks “strong buy” ratings. These stocks are sketchy and unstable, and should never be investment targets. Always trade with a plan.
Now, let’s get to the top biotech penny stocks to watch this month.
Biotech Penny Stock to Watch #1: Ocean Biomedical Inc (NASDAQ: OCEA) — The Former Runner That I’m Happy I Kept on My Watchlist
My first biotech penny stock pick is Ocean Biomedical Inc (NASDAQ: OCEA).
Past spikers can spike again.
OCEA ran 690% in February 2023.
It spiked again in February 2024, and the run is pushing into March.
This is purely a biotech sympathy play. The biotech sector is red hot right now. Second only to the AI and tech sector.
Plus, according to StocksToTrade, OCEA has a float of only 3.1 million shares. The low supply of shares (anything below 10 million) can help prices spike higher when demand increases.
On February 29 the company announced plans to present its “first-ever human data” at the 2024 APASL Global Liver Meeting set for March 27–31.
Don’t hold shares through the meeting.
There’s a trading rule that we follow that goes like this: buy the rumor, sell the news.
When there’s a publicized event in the future, we often see a stock trade with more volatility in anticipation. But if there’s too much bullish momentum, when the event comes to pass, it’s possible that everyone who would have bought already did … then there are only sellers left and the price tanks.
We can trade the volatility before and after the event. But don’t hold a position during it.
OCEA already spiked to new highs in anticipation of the meeting, a 910% run.
It could spike higher. But I’m currently looking for panic dip-buy opportunities. Watch my video below for a tutorial:
This spike won’t last forever. It’s a penny stock first and foremost. The price will crash eventually.
But thanks to my 7-Step Framework, I can make money on the way up AND the way down.
Biotech Penny Stock to Watch #2: Ainos Inc (NASDAQ: AIMD) — The Super Low Float Biotech Penny Stock
My second biotech penny stock pick is Ainos Inc (NASDAQ: AIMD).
We have to be careful about this mover.
I don’t see any definitive news pushing it higher.
Usually … that’s a no go.
But in this 2024 market, we can bend certain rules slightly and trade more aggressively. 3 out of 4 stocks follow the market.
The biotech sector is hot. AIMD has a float of only 1 million shares. Thus, it’s extremely vulnerable to short term volatility.
Be aware, there’s after hours and premarket price action to keep in mind if you trade this runner. There are likely some bagholders above the current price, but it’s still possible that we see a rally.
Most chart softwares won’t show you after hours or premarket data … that’s why I use StocksToTrade.
The market is so much bigger than people think! Ignorance will come back to bite you in the rear.
Here’s a chart of the key price action on AIMD, don’t say I never did nothing for ya:
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Biotech Penny Stock to Watch #3: Ventyx Biosciences Inc (NASDAQ: VTYX) — The Weight Loss Hot Sector Biotech Stock
My third biotech penny stock pick is Ventyx Biosciences Inc (NASDAQ: VTYX).
There are often hidden traps and pitfalls that unsuspecting traders walk into.
That’s the nature of the market. It’s why 90% of traders lose.
And it’s why I started teaching.
I thought if I could reach enough people, then they’d recognize these patterns in the market and might not get sucked into penny stock promotions.
But year after year the spikes get bigger.
And the promotion moves …
- From boiler rooms
- To Facebook groups
- To Twitter
- To Reddit
- In the EV sector
- The COVID biotech sector
- The crypto sector
- The AI sector
The promotion never ends. It just switches to the next hottest niche. And there are always suckers trying to get rich quick.
But we’re getting off track … Let’s get back to the hidden traps in the market:
Biotech stocks are notorious for diluting after a stock spike. Essentially, it’s a corporate cash grab that tanks the share price.
So, when we’re trading biotech stocks, we’re always wary of holding overnight or for long periods of time.
Don’t let that scare you … now you know! Knowledge is power.
I’m interested in VTYX because it’s unlikely the company will dilute the share price any time soon. Here’s why …
As of September 2023, the company boasted $300 million in cash and equivalents and had no debt. See the chart below:
The stock price spiked 280% starting February 20 when investment bank, Piper Sandler highlighted that VTYX’s treatment could rival that of other obesity treatments in the industry.
There are a few weight loss plays moving in the market. VTYX is my favorite right now due to the low price and the strength and endurance of its run:
I’m looking to panic dip buy this stock.
But I’m also interested in any consolidation above support. The price could surge higher if it rallies off of a strong level.
Biotech Penny Stock to Watch #4: Helius Medical Technologies Inc (NASDAQ: HSDT) — The Medical Device Stock That You Can Now Get Reimbursed For
My fourth biotech penny stock pick is Helius Medical Technologies Inc (NASDAQ: HSDT).
For biotech companies, a holy-grail catalyst usually involves some sort of government licensing or approval.
These businesses spend piles of money trying to bring the newest treatment to the public. But before anyone in the U.S. can purchase it, there are numerous hoops to jump through.
HSDT is a company that continues to prove its abilities within this sector.
In June of 2023 the company announced its Portable Neuromodulation Stimulator (PoNS) was approved for Medicare- and Medicaid-covered patients with multiple sclerosis (MS). This takes the form of reimbursement for patients using the PoNS system.
Fast forward to this year, on March 4 the company boasted about its reimbursement program, the possibility of expanding reimbursement to other treatments, and its extended cash runway into Q3 of 2024.
The stock’s float is well below 10 million: 656,000 shares.
And the price showed volatility on March 4 directly after the announcement.
Keep an eye out for any follow-up moves.
Biotech Penny Stock to Watch #5: Renalytix PLC (NASDAQ: RNLX) — The AI Testing Biotech Stock
My fifth biotech penny stock pick is Renalytix PLC (NASDAQ: RNLX).
This stock has the benefit of 2 red-hot sectors.
- Biotech
- AI
The company is working to create an AI-enabled in vitro diagnosis for kidney disease. In vitro means outside of the human body, like in a petri dish.
There wasn’t any news that caused prices to spike in February. But nonetheless, it surged 780% in less than a week.
The price recently consolidated around support at $0.75 and rallied toward the highs.
We have to respect the price action in this 2024 market. RNLX is in the 2 hottest sectors and prices are surging.
There are opportunities for any trader who knows my process.
Biotech Stocks Under $5
The allure of hot sector stocks, especially when they’re also penny stocks, is undeniable. These stocks present a unique blend of opportunity and volatility. The biotech industry is booming, with advancements and applications spreading across various sectors, from drug development to gene editing, making biotech stocks a magnet for investors looking for the next big breakthrough. The gains here can be proportionately greater than those from more established stocks, mainly because even minor positive developments or clinical trial results can send their prices soaring.
However, it’s crucial to approach these opportunities with a clear strategy and an understanding of the risks involved. The volatility of penny stocks, combined with the speculative nature of biotech ventures, means that while the potential for rapid gains is significant, the risk of losses is equally high. Conduct thorough research, looking beyond the hype. And never invest in these stocks — only trade them.
Remember, the key to success in trading biotech stocks under $5 is not just about jumping on every opportunity but being selective and strategic. It’s about leveraging the explosive potential of the biotech sector while managing risk meticulously. By focusing on companies with the potential to lead in their niche, traders can capitalize on the disproportionate gains that these penny stocks offer, all while keeping their investment strategy tight and cutting losses quickly.
What Is the Best Biotech Stock To Buy Right Now?
I can’t tell you the “best” biotech stock to buy right now because the market is always changing. What I can tell you is to look at factors like market cap, liquidity, and EPS (earnings per share). These are crucial indicators that can give you an edge. I’ve been trading for years, and I can tell you that understanding these metrics is a game-changer.
You can get your intel from TipRanks links and Wall Street analysts — but remember, they’re not always right. You’ve got to do your own research. Dive into the company’s pipeline, check out their science, and maybe even look into the careers of the top executives. The more you know, the better your strategy will be.
Why Other Biotech Penny Stocks Were Not Chosen
When it comes to biotech penny stocks, not all are created equal. Some have strong growth potential backed by innovative therapies and treatments for diseases, while others might just be riding the hype. It’s crucial to conduct thorough analysis before diving in. Let’s explore why some biotech penny stocks might not make the cut.
- Clinical Indications and Approvals: Biotech companies often focus on specific clinical indications. If a company doesn’t have any therapies or treatments that have received approvals or shown promise in clinical trials, it’s a red flag. Regulatory approvals are milestones that can significantly impact a biotech company’s stock price.
- Financial Health: Revenue and Debt: Another critical factor is the company’s financial health. A biotech company with high debt and low revenue is a risky investment. Always check the balance sheet. Brokers and analysts often provide this information, but it’s best to do your own due diligence. Look at rates of revenue growth and how the company manages its debt.
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Its Breaking News Chat feature is a game-changer — it helped me make over $1 million in trading profits in 2021, when biotech news was behind many of the best spikers I’ve seen in my 20+ years trading. I seriously think every trader should have this tool working for them. It’s one of the best trading platforms out there.
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Things You Need to Know Before Investing in Biotech Penny Stocks
Thanks to their volatility, biotechs can drain your investments faster than you can enter the ticker name in the order window. Banks and traditional finance institutions often steer clear of these for a reason. But if you’re like me, you see the potential for massive gains. I’ve been teaching trading strategies for years, and one thing I always emphasize is risk management.
Before you even think about diving in, understand the economy you’re playing in. Look at dividends, if any, and how the company is positioned in its region. Check out exchanges where the stock is listed; some are more reputable than others. And for heaven’s sake, don’t put all your eggs in one basket. Diversification is key.
If you’re already committed to doing your homework, why not take it a step further? There are biotech companies out there that are just waiting to be discovered. These hot biotechs could be the next big thing, and your research could lead you right to them. Interested in finding these hidden gems? Check out this list of former runners. And remember…
Former runners can run again!
How To Trade Biotech Penny Stocks The Right Way
So you’re still with me? Good. Hopefully, the Instagram trading influencers have already clicked off to go blow up their accounts. Trading biotech penny stocks the right way involves a well-thought-out strategy. I’ve been in this game long enough to know that you can’t rely on luck. You need a solid plan, and you need to stick to it.
First off, don’t ignore the news and events surrounding the biotech sector. This industry is heavily influenced by views from the scientific community, FDA approvals, and other significant events. Keep an eye on these, and you’ll be ahead of the game. Also, consider using credit cards wisely to manage your liquidity, but be cautious of the risks involved.
How do you get ahead of the game? That’s all about finding a biotech penny stock before it makes headlines. It’s possible, but it requires a specific approach. Learn my secret formula for finding penny stocks pre-spike here.
Biotech Penny Stocks: The Bottom Line
Penny stock trading is a great way to build your account as a new trader. Biotech penny stocks are some of the hottest movers on the market — but this volatility can cut both ways..
Key Considerations:
- A lot of penny stocks are shady. Risk in biotech penny stocks can be heightened due to limited company information and unsavory promotion. When the price gets up high enough, nine times out of 10 these companies will do new share offerings, tanking share price.
- There’s a possibility for big gains. I trade biotech penny stocks because you can trade conservatively and still rack up gains. These stocks can go supernova at any time. Aim for “the meat of the move.”
- These companies are often young. Some biotech penny stocks are newer companies, and can dramatically shift their market trajectory and valuation.
Trading isn’t rocket science. It’s a skill you build and work on like any other. Trading has changed my life, and I think this way of life should be open to more people…
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Biotech Penny Stock FAQs
What Biotech Sectors Should I Focus On?
When it comes to biotechnology, you’ve got a smorgasbord of options. Genomics and cell therapies are hot right now. Don’t overlook stem cells; they’re a cornerstone in healthcare solutions. Diversifying across these sectors can be a smart move.
What Investment Vehicles Are Suitable for Biotech Penny Stocks?
You’ll hear me say it a million times: diversification is key. Consider ETFs that focus on biotech. If you’re into individual stocks, keep an eye on ipo listings and blue-chip companies that have a biotech arm. Setting a price target can help, and don’t forget, you can also use an ira to hold these assets.
How Do Market Dynamics Affect Biotech Penny Stocks?
Market dynamics are the bread and butter of trading. Keep an eye on buyers and their positions, especially in penny shares and penny stocks. Pharmaceutical stock can be volatile, so understanding the market sentiment is crucial.
How Can I Analyze Biotech Penny Stocks?
We’re here for the long haul, so get familiar with the tools of the trade. A stock biotech chart is invaluable for technical analysis. Keep a stocks list for quick reference, and don’t forget to compare pharma stocks to get a broader view.
What Additional Factors Should I Consider?
You don’t have to mirror my techniques, but you should watch the stock charts of former runners like Nymox Pharmaceutical Corp (OTCPK: NYMXF), Ardelyx, Inc. (NASDAQ: ARDX), and Rigel Pharmaceuticals, Inc. (NASDAQ: RIGL). Articles and technology updates can provide valuable insights. Sales figures, types of services offered, and partnerships can also be indicators of a stock’s potential. Exercise caution and listen to the response from scientists in the field to make an informed decision.
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