I’ll begin this penny stock list in the same manner that I begin all lists of penny stocks: With a caveat.
Penny stocks are among the most volatile classes of investments. Pretty much everyone interested in this area already knows that, but it bears repeating for those who may just be getting into them. Their risk implies both quick gains and losses. The old maxim of investing only what you can afford to lose holds doubly true here.
That aside, another thing to note about this particular list of penny stocks is its composition. All of the stocks listed here are classified among biotechs with the exception of one. As you’re also likely aware, biotechs are very much hit or miss by their nature. Again, risk and reward considerations come into play.
Third, these stocks are all under a specific price point of $3. That makes them relatively cheap even as the definition of penny stocks has shifted over time. It basically includes all stocks trading for under $5 although there is no hard and fast rule to speak of. Here they are:
Predictive Oncology (NASDAQ:POAI)
Vista Gold (NYSEAMERICAN:VGZ)
Clearside Biomedical (NASDAQ:CLSD)
Penny Stocks Under $3: ObsEva (OBSV)
ObsEva produces therapeutics targeted at women’s reproductive health. I think there are two primary reasons to consider investing in OBSV stock for 2022.
First, let’s look at the fundamental business. It isn’t one which is particularly risky like other biotechs and penny stocks. I say this because its most recent earnings report indicates a company in a strong position.
First of all, ObsEva reported a net gain of $800,000 for the quarter that ended Sept. 30. That was a significant turnaround from a year earlier when it posted a $24.4 million loss.
Secondly, the company’s cash position is far better than it was at the beginning of 2021. On Sept. 30, ObsEva reported a cash position of $62.9 million, up from $31.2 million at the end of 2020.
On top of those fundamental reasons, there’s another positive factor behind ObsEva: That is, it recently was added to the Nasdaq Biotechnology Index.
CEO Brian O’Callaghan noted, “Being part of this index enables us to reach new audiences and I look forward to this exciting next chapter as we continue to grow, bring innovation to the field of women’s health and build on our success to date.”
The other encouraging sign is that ObsEva’s target price of $10.75 is well above its current price of $2.
Predictive Oncology (POAI)
Source: Photographee.eu / Shutterstock.com
Predictive Oncology is a firm that has awarded investors over 2021. Year-to-date, POAI stock is up modestly to nearly $1 after beginning 2021 at a price of 72 cents per share. Price increases of 38% aren’t exactly ‘modest’ so to speak, but we are talking about penny stocks here.
However, POAI stock already spiked early in 2021, rising to $2.20, which is why I call its overall 2021 performance modest. The other thing to note is that Predictive Oncology shares have been given a $5 target price by both of the analysts with current coverage.
So, what does the company actually do? Well, it is a company that applies AI technology to the development of cancer therapeutics. The firm has a repository of data points 150,000 plus tumors by cancer type. It uses AI to better find potential therapies against those tumors and cancers.
Fundamentally speaking, Predictive Oncology is not a bad company. Per its most recent earnings report, the firm has no outstanding debt and a cash position of $41 million. That’s significantly higher than the $2.3 million in cash it reported a year prior.
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Biolase sells laser dental systems that enable dentists to perform minimally invasive dental procedures. While the firm has sold over 41,200 of its laser dental systems to date, it is also clearly risky.
Biolase’s share price has remained below $1 for a significant portion of this year. And back on Nov. 23 the company was granted a 180-day extension to regain compliance with the Nasdaq threshold of a $1 minimum stock price.
Yet, there are many positives to consider as well. Biolase’s $2.31 target price implies massive potential gains considering the stock is just 40 cents per share today. Those gains are likely to be a product of the firm’s continued ability to improve its operations.
On the one hand, Biolase reported a 46% improvement in revenues in Q3, hitting $9.5 million. Further, 78% of sales of lasers in the U.S. came from new customers. That indicates a company with highly marketable products. Laser system sales increased 64% overall. But net losses of $10.88 million through Q3 were about the same as they were a year earlier. In short, there is risk.
However, Biolase maintains a strong cash position and if sales continue to increase 2022 should see share price gains.
Penny Stocks Under $3: CohBar (CWBR)
CohBar is a firm that is attempting to better understand the mitochondrial genome to harness therapeutic peptides. The underlying premise of its business is that these peptides have been preserved by evolutionary biology because they regulate critical biological functions. The firm identifies these peptides and then produces analogs which may have therapeutic value.
As with most penny stocks, the bullish case for CohBar is far from absolute. The company released positive results from its Phase 1a/1b study for a therapeutic against nonalcoholic steatohepatitis recently. Further, Cantor Fitzgerald initiated coverage and issued a research report on the firm of late. That’s a positive sign, and three firms now have coverage of CWBR stock.
Again, as with all of the penny stocks on list, CohBar shares have strong upside. It trades at 35 cents but the three firms with coverage believe it could be worth $3.83 on average. So, 2022 could be a great year to possess CWBR stock.
Yet, despite the positives, Cohbar is facing continued troubles. Its net losses grew by 9.4% through Q3 on a year-over-year basis, reaching $12.683 million.
Vista Gold (VGZ)
Source: allstars / Shutterstock.com
Vista Gold is the lone entrant on this list not from the biotech and medicine sector. As you guessed, it is a gold mining company. The basic premise behind investing in VGZ stock is that if a few hurdles are overcome, VGZ stock could approach its target price of $2.36.
One of the most important hurdles relates to its definitive feasibility study for the development of its Mt. Todd property. That is expected to be completed in early 2022. It is basically one of several hurdles the firm has to overcome in order to develop its gold producing assets and finish preparation for their construction.
A step-wise listing of those hurdles is listed on page 4 of its recent investor presentation. Again, if the firm ticks off those boxes in order it can rise toward that target price in 2022. The encouraging sign there is that all three analysts with coverage rate VGZ a buy.
Source: luchschenF / Shutterstock.com
Back to the biotechs. Calyxt is another biotech firm. It is focused on producing plant-derived biosynthetic compounds. Calyxt partners with firms in the pharmaceutical, beauty, chemicals, and advanced material markets into which it sells its compounds.
From a fundamental perspective, Calyxt is making progress. Through the first three quarters of 2020, Calyxt posted a net loss of $31.44 million. That loss narrowed to $22.14 million in the same period of 2021.
The other positive catalyst for Calyxt comes in the form of news out of its lab scale Biofactory manufacturing system. The system identified over 15,000 chemical signatures, both known and unknown, to date.
The next step is then to understand the commercial applicability of those molecules and work toward selling them. So, if the PlantSpring biotechnology platform can be leveraged properly CLXT stock can run much higher in 2022 based on target prices.
Penny Stocks Under $3: Clearside Biomedical (CLSD)
Like ObsEva, Clearside Biomedical was recently added to the Nasdaq Biotechnology Index. That addition will garner the firm more attention which should help to bring it closer to its target price above $10.
That is good news given that CLSD stock currently trades below $3. More importantly is understanding what the firm does. Clearside Biomedical is a very specialized firm in the biomedical field.
Its focus is on the delivery of therapeutics to what is called the suprachoroidal space. The suprachoroidal space exists on the side of the eye and allows drugs to be injected into the choroid and retina which is where diseases of the eye often present.
The reason to be bullish on CLSD stock relates to recent safety results for the treatment of neovascular age-related macular degeneration. The positive safety results for the Phase 1/2a clinical trial should help CLSD move higher in 2022.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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