I’ll start this article the same way that I start every penny stock list: with a caveat and a warning. While penny stocks can provide quick, sustainable returns, investors must be careful. Arguably the best way to do so is to determine how much you can safely lose. Play penny stocks in that way and you’ll have a much better outcome.
With that in mind I’m going to keep this list inherently as safe as I can by limiting it to Nasdaq listed penny stocks. I could easily include stocks listed on the NYSE as well. Those would be analogous to Nasdaq listed stocks, both of which are equally safe.
The reason for this limitation is the NYSE and Nasdaq exchanges are centralized and participants must file periodic audited financial reports. That way it’s possible to verify their claims regarding their business performance.
And according to Kiplinger there’s another reason Nasdaq listed stocks offer an inherent degree of safety: “The major exchanges also have listing requirements; OTC stocks don’t. For example, a company must have at least 400 shareholders and a market value of at least $40 million to get a listing on the New York Stock Exchange. The OTC market makes no such requirements.”
Further, all of the equities listed below have at least one analyst rating. Let’s jump seven penny stocks that meet those criteria in October.
- Eyegate Pharmaceuticals (NASDAQ:EYEG)
- Endo International (NASDAQ:ENDP)
- electroCore (NASDAQ:ECOR)
- Uxin Limited (NASDAQ:UXIN)
- WiMi Hologram Cloud (NASDAQ:WIMI)
- Solid Biosciences (NASDAQ:SLDB)
- PowerBridge Technologies (NASDAQ:PBTS)
Penny Stocks for October: Eyegate Pharmaceuticals
Pharmaceuticals often populate lists of penny stocks with big potential. The reason is simple: Pharmaceutical stocks are prone to explosive growth by their nature. They require long development times and must undergo a stringent regulatory process. But when they finally pass muster, sales are usually immediate and large.
That also makes pharmaceutical stocks hit or miss. Add all of that up and it’s fairly easy to see why they possess such explosive growth potential, and thus attraction.
So, on to Eyegate Pharmaceuticals. As you may have guessed by its name, Eyegate Pharmaceuticals focuses on therapeutics for treating eye disorders.
The company’s focus within that particular area includes an intravitreal injection for inflammatory diseases of the eye, including posterior uveitis, and a novel nano carrier technology eye drop for ocular surface diseases such as conjunctivitis, dry eye disease and others. Further, Eyegate Therapeutics develops gels that have application following ocular surgeries, including photorefractive keratectomy.
The good news is that both of the analysts with coverage of EYEG stock list it as a buy. Shares currently trade for $1.95, but those analysts have given it a target stock price of $10.25.
There must then be some catch in order to receive those potential 388% returns, right? The answer is yes, there is, and it is evident in the company’s pipeline. The majority of the company’s therapeutics are in Phase 1 with only a single therapeutic in Phase 2 of the clinical trials process.
Endo International (ENDP)
Endo International is another pharmaceutical company. Thus, all of the caveats that apply to Eyegate also apply to Endo International. Endo International is a much bigger company with a much broader business.
It has multiple business arms including branded pharmaceuticals, generic pharmaceuticals, aesthetics and pharmaceuticals for the Canadian market.
Before diving deeper into Endo International’s business, let’s look at potential returns. There are a few reasons to believe that ENDP stock may grow quickly in October. First of all, it has momentum on its side. Prices have jumped over 20% since Sept. 22 when the company released the first generic version of the smoking cessation drug, Chantix.
Second, ENDP has run much higher this year, peaking above $10 in February. The stock has a lot of coverage and its average target stock price sits at $6.57. The high target price is $11, so there’s plenty of upside based on current $3.45 prices.
Although I noted that Endo Pharmaceuticals carries inherent volatility as a pharma stock, it’s actually quite stable. The company reported $714 million in revenues in the second quarter, up from $687 million a year earlier.
There’s a definite chance that ENDP stock moves out of penny territory in October and it certainly has a lot going for it at the moment.
Penny Stocks for October: electroCore (ECOR)
Have you ever heard of the vagus nerve? It is the longest of 12 cranial nerves and affects nearly all areas of the body. For those reasons it has become a major focus in both alternative and modern medicine in recent times.
electroCore is a company that also focuses on the vagus nerve. It has developed a non-invasive vagus nerve stimulation device which has application in neurology. The company has secured U.S. Food and Drug Administration (FDA) approval for the device in use against many different forms of headache.
The device, which is held against the neck to stimulate the vagus nerve, is also undergoing clinical trials for indications including PTSD, stroke and Parkinson’s Disease.
The company has a product which sits at the cusp of multiple trends, that much is obvious. But the news on the financial side is also fortuitous.
electroCore released earnings on Aug. 5 which showed healthy growth. The company posted $1.3 million of revenue in Q2, up 69% from a year earlier. It maintained $23.7 million in cash on June 30 and held a subsequent public offering which netted it $18.8 million more.
Perhaps the most attractive factor behind ECOR stock, though, is that it has a lot of upside. Shares can be purchased for just over $1 currently and have a target price of $3.44 form the four analysts who have initiated coverage.
Uxin Limited (UXIN)
Let’s begin with what could be characterized as bad news: Uxin Limited possesses extra volatility beyond simply being a penny stock. It is a Chinese stock, which have had a very difficult year. And now with Evergrande worries added on top, things aren’t getting better soon.
Perhaps then I should next dive straight into potential gains that UXIN stock possesses. Currently trading at $2.65, Uxin Limited carries a target price of $6.40. It has only a single analyst rating, but that 100%+ upside makes it worthwhile right now.
The company operates an online used car platform out of Beijing. And on Sept. 24 it posted positive earnings.
The company reported 277.8 million RMB of revenue ($43.0 million) in the quarter. The results indicate strong growth both sequentially and on a year-over-year basis. Uxin recorded a 41.7% increase in sales over the previous quarter and a 346.6% increase in YoY sales.
The other good news is that Uxin looks to be growing in other ways as well. It also announced plans to build a big reconditioning plant in conjunction with the local government: “Changfeng County Government of Hefei City have recently entered into a strategic partnership to jointly invest in and build a used car inspection and reconditioning plant. With a total investment of up to RMB2.5 billion, the plant is expected to have an annual production capacity of 60,000 to 100,000 vehicles once it is in operation in the next few years.”
Penny Stocks for October: WiMi Hologram Cloud (WIMI)
Wimi Hologram Cloud, another Chinese company, has suffered, although its business results have been strong. The company, which provides holographic augmented reality technology, just reported strong financial results.
Revenue increased 202.2% to 516.2 million RMB ($79.9 million) YoY from 170.8 million RMB for the six months ended June 30, 2021. Gross profit also jumped an impressive 189.8% to 153.1 million RMB ($23.7 million) YoY from 52.7 million RMB for the same period.
On the one hand, WiMi Hologram Cloud is likely being held down in price by overarching headwinds. But that’s arguably an opportunity. Yes, Chinese equities are inherently risky right now. But the fact is that WIMI stock carries a target price of $7 and was trading above $10 earlier in the year before China began its crackdown.
Its services could be the future of advertising and growth–massive.
Solid Biosciences (SLDB)
Solid Biosciences is a company focused on therapeutics for Duchenne muscular dystrophy. If analysts are correct, SLDB shares are a penny stock with massive growth potential.
They believe the Cambridge, Massachusetts company should trade at $9.17 on average. That’s much higher than its current $2.46 share price. And the high end of their expectations reaches $17 even.
In many ways Solid Biosciences is a typical biotech from an investment perspective. While it remains full of potential, it continues to suffer losses.
The company derived $3.6 million in revenues from collaborations, but the overall picture is one of loss. It also recorded R&D expenses of $15.5 million in the quarter. Those expenses were a significant contributor to its $18.7 million net loss in the quarter.
Those types of earnings are fairly common in the biotech and pharmaceutical sector. But the company isn’t in any immediate danger. It had $249 million in cash equivalents on June 30. If its gene therapy continues its progress though clinical trials, a lot of people will make a lot of money.
Penny Stocks for October: PowerBridge Technologies (PBTS)
PowerBridge Technology has many elements of the perfect storm of stock volatility: It’s a Chinese company listed on the Nasdaq, it’s a growth company, and it engages in blockchain and cryptocurrency mining operations.
Of course, risk and reward are strongly correlated. That’s evident in the spread between PBTS stock’s $7 target price and its $1.21 current price.
But the company isn’t only focused on high-growth risk-heavy areas. It also provides software-as-a-service (SaaS) solutions to both government and private entities. I’ll say this much, it is certainly risky and probably the least investment worthy of all the stocks on this list. That’s why I’ve put it last.
As I mentioned at the beginning, the value of being Nasdaq listed is that companies must file financial reports. That adds a level of trustworthiness to such stocks. PowerBridge Technologies has had trouble in doing so. It issued a form NT 20-F back in April, which is a notification that it couldn’t file a timely report.
Only consider PBTS stock if it files in October and results look positive.
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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.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.