Many people invest in penny stocks because they are cheaper. But another side of penny stocks is not so good as they are intensely volatile in nature and risky enough. Typically, penny stocks consist of $5 a share. But there are some strategies that traders believe can help them earn profits from penny stocks. This article focuses on top UK penny stocks.
Penny stocks, if you’re unfamiliar with them, are highly volatile and speculative. This implies they shift frequently and with little to no notice in response to news and events. As a result, knowing exactly what is going on in the stock market and how to profit from it will be the most valuable asset in your portfolio. And for now, the pandemic, notably the Omicron variety, is the primary source of market movement.
There are four tiers of penny stocks: Tier-1, Tier-2, Tier-3, and Tier-4. Tier-1 penny stocks are listed in major stock exchanges like NYSE or Nasdaq. Tier-2 penny stocks come under the range of 1 cent to 99 cents. Tier-3 and Tier-4 are sub-penny stocks and triple zero stocks, respectively.
Here are the top 10 penny stocks to watch. You can invest in them through one of the reputed brokers like ABinvesting.
Top 10 penny stocks UK
American Virtual Cloud Technologies Inc. (AVCT)
AVCT stock, which was up nearly 5.7 percent at EOD, was one of the more significant gainers of the day. It’s worth mentioning that we’ve written about AVCT stock several times in recent months due to its meteoric spike in price. Despite a 65 percent loss in the previous twelve months, AVCT stock has increased by almost 170 percent in the last month. As a result, AVCT is an outstanding penny stock to watch.
So, why are American Virtual Cloud’s stock prices rising right now? As part of its bigger funding plan, the firm said today that it had filed a resale registration statement.
AVCT is currently trading at $2.38 with a market capitalisation of $174 million.
TOMI Environmental Solutions Inc. (TOMZ)
In a month when many penny companies witnessed huge losses due to a mass flight to safety, TOMI Environmental Solutions Inc. (TOMZ) actually witnessed a 35 percent rise due to the resurgence of coronavirus worries.
TOMI Environmental Solutions’ share prices may rise higher in the months ahead, owing to its strong financials, including a strong balance sheet and gross margin, and growing concerns over the Omicron variant.
TOMZ is currently trading at $1.59 with a market capitalisation of $31.29 million.
Bolt Biotherapeutics (BOLT)
Bolt Biotherapeutics, a clinical-stage biotechnology business launched in 2015 by Stanford University’s Dr. Edgar G. Engleman, is the first on this list. Boltbody Immune-stimulating Antibody Conjugates are a company-developed product (ISACs). These antibody conjugates bind to tumour cells, allowing myeloid cells to destroy them.
The business reported interim clinical data from its current Phase 1 investigation of BDC-1001, Bolt’s flagship ISAC candidate for tumour treatment, earlier this month.
BOLT is currently trading at $4.54 with a market capitalisation of $179.71 million.
Progenity Inc. (PROG)
PROG stock is another hot penny stock that we’ve been examining in recent weeks. Progenity is on many investors’ radars right now, thanks to a 6% increase today and a gain of more than 10% in the last five days. If you’re not aware of Progenity, it’s a biotech firm that specialises in GI health and oral biotherapeutics. In addition, it engages in creating and manufacturing molecular testing products by working in genomes, epigenomics, proteomics, and other fields.
According to the firm, the aim is to provide more precise healthcare solutions and better disease diagnoses. Avero Diagnostics, a subsidiary of the company, was sold to Northwest Pathology a few weeks ago.
PROG is currently trading at $2.25 with a market capitalisation of $368.44 million.
Ambev ADR Representing One Ord Shs (ABEV)
Ambev S.A. (ABEV) is a Brazilian brewing company. It currently appears cheap, with a share price of $2.80 against a target price of $3.51 and two recent rating upgrades in the last four months.
For such low-priced equity, the price-to-sales ratio of 0.61 is also quite healthy. Furthermore, Ambev stock’s average five-year EPS growth of about 40%, as well as 56 percent quarterly EPS growth, suggest that the stock is worth more than it is now. Ambev was also included in the Leading Beer Stocks for 2022, performing very well in terms of value.
ABEV is currently trading at $2.71 with a market capitalisation of $245.9 billion.
TRACON Pharmaceuticals (TCON)
TRACON Pharmaceuticals is a clinical-stage biopharmaceutical business dedicated to the development and commercialization of innovative cancer-targeted medicines. TRACON has reached a deal with Alphamab Oncology and 3D Medicines, under which the business will have the exclusive right to commercialise and develop envafolimab in North America.
Alphamab Oncology’s Envafolimab (KN035) is the first subcutaneously administered single-domain antibody. This antibody suppresses PD-L1, a type of protein seen in large amounts in some cancer cells.
TCON is currently trading at $2.81 with a market capitalisation of $58.34 million.
Denison Mines Corp. (DNN)
In contrast to TOMI Environmental Solutions, Denison Mines Corp. (DNN), a uranium exploration and development company, has had an awful month, with its stock down about 25% in the last month. However, it is still up about 135% in the last year, indicating the market’s renewed interest in nuclear energy investments.
Nuclear energy consumption is expected to skyrocket in the coming years as countries aim to reduce their reliance on fossil fuels. However, Denison Mines’ triple-digit quarterly sales and earnings per share (EPS) growth, along with a near-90 percent profit margin and a strong balance sheet, could indicate that the company is well-positioned to profit from the trend in the coming year.
DNN is currently trading at $1.51 with a market capitalisation of $1.11 billion.
Compass Therapeutics (CMPX)
Compass Therapeutics is based in Boston, Massachusetts, and was launched in 2014. It’s a clinical-stage biopharmaceutical business focused on oncology that’s working on creating proprietary antibody-based therapies to treat a variety of human ailments. Tumor angiogenesis is the development of new blood vessels that tumours require to proliferate.
Currently, the company has three product candidates, two of which are in clinical trials. CTX-009, an experimental bispecific antibody that targets both the DLL4 and VEGF-A signalling pathways, which are crucial for angiogenesis and tumour vascularization, is one of Compass’s leading product candidates.
CMPX is currently trading at $3.45 with a market capitalisation of $343.11 million.
Tonix Pharmaceuticals Holdings Corp. (TNXP)
TNXP stock, which has gained about 10% since EOD on January 3rd, is another significant gainer of the day. The main reason for today’s rise is because the business revealed last month that its skin test TNX-2100 had gotten IND certification. This skin test has the ability to accurately assess one’s SARS-CoV-2 exposure as well as T-cell immunity.
Despite the fact that this news was released last month, the biotech industry is currently experiencing a significant level of bullishness. It’s also worth noting that any firm working on a Covid cure or therapy is likely to receive greater attention today than in past months.
This is owing to the popularity of the Omicron variety and the resulting biotech concentration. While it’s difficult to predict what will happen next with this IND approval, there’s no denying that it’s an intriguing potential. It’s also worth noting that, in terms of Covid, TNXP is now highly speculative.
TNXP is currently trading at $0.37 with a market capitalisation of $184.11 million.
Playstudios Inc. (MYPS)
Playstudios Inc. (MYPS) has a strong balance sheet, with $380 million in cash on hand for mergers and acquisitions (M&A). Indeed, management says it’s continually searching for new console additions to add to its pipeline and a $50 million share buyback on the horizon and consistent annual double-digit revenue growth. As a result, in 2022, the MYPS will be the significant penny stock to watch from the gaming industry.
While Playstudios’ daily average users (DAU) decreased by 16% in the most recent quarter compared to the previous quarter, average income per user increased by 20%. This supports CEO Andrew Pascal’s conviction that, while the number of users has fallen, the quality of those users has improved.
A fifth wave of the coronavirus could boost user numbers by luring people back indoors to their devices. As a result, Playstudios’ stock price may rise in the coming year.
MYPS is currently trading at $4.24 with a market capitalisation of $534.27 million.
Can Penny Stocks Be Profitable in 2022?
This issue can be resolved as it relies entirely on your investment objectives. If you use short-term or swing trading as a strategy, there are several opportunities to profit. If you’re looking for long-term returns, though, some penny stocks might be a better fit.
The market’s desire for penny stocks has been severely stifled in recent months. Given that cryptocurrencies have once again become the hazardous gamble of choice for most retail speculators, this makes sense. As a result, investing in equities under $5 has become much more difficult. That isn’t to say you shouldn’t participate in the category.
While few stocks are now trading at or near all-time highs, there is still a slew of low-cost stocks poised for large gains in the coming year. Moreover, these surges could be the result of game-changing events.
Even companies that aren’t exactly cutting-edge are likely to undergo significant changes in the coming year, putting their stock prices in jeopardy. For example, consider a successful turnaround or the announcement of a large customer sign-up.
Microcaps, small caps, stocks under $5, and other terms are used to describe penny stocks. However, some of them may not be traded on a major stock market, and all of them necessitate a more nuanced approach than other stocks. Nevertheless, Penny stock trading can be a terrific source of income with immense potential, provided you can handle risk and make quick decisions independently.
One of the most challenging components of learning how to make money trading penny stocks is locating them. To begin with, finding a cheap stock is challenging because most investors focus on another substantial money-making stock. You must also identify an undervalued stock with a favourable valuation and a great perspective when it comes to penny stocks.
You can trade UKL penny stocks with ABinvesting under a low trading fee and no commission.