Now could be a great time for investors to consider stacking up on penny stocks. These companies often have significant growth potential. But they trade at low prices, typically under $5 per share.

Penny stocks tend to be highly volatile, with the potential for rapid gains or losses. This requires careful research and risk management. Fortunately, some of the better-known penny stocks are covered by Wall Street analysts who give strong buy ratings. This is a positive indicator, as analysts closely follow the fundamentals, growth prospects and catalysts for these companies.

Many penny stocks are speculative investments since the underlying companies may be new, unprofitable or in uncertain industries. Ratings given by these analysts could then mitigate some risk. But some great bargains are in the market right now.

So, let’s examine three penny stocks to buy with strong buy ratings in April.

Galmed Pharmaceuticals (GLMD)

Galmed Pharmaceuticals (NASDAQ:GLMD) focuses on the development of therapies for liver diseases, including non-alcoholic steatohepatitis (NASH).

In 2023, GLMD remained focused on developing its key drug, Aramchol, which treats liver and fibro-inflammatory disease. Their efforts extended to exploring Aramchol’s applicability in other fibro-inflammatory conditions beyond liver disease. They worked with the Hebrew University on developing Amilo-5MER, a synthetic peptide.

Future plans emphasize the continuation and expansion of their clinical trials, notably their pivotal Phase 3 ARMOR trial for Aramchol and a planned PSC clinical trial. 

Also, an analyst has set a 12-month price forecast for GLMD stock at $4. This suggests a substantial upside potential of 1,079.59% from its current trading price. The forecast is supported by a strong buy rating.

Biotech stocks like GLMD are very polarizing, “all or nothing” type investments. But investing even a small amount into these companies could lead to outsized returns.

Selina Hospitality (SLNA)

Selina Hospitality (NASDAQ:SLNA) is an innovator. It offers designed accommodations with coworking, recreation, wellness and local experiences. SLNA caters mainly to the remote working and digital nomad crowd.

Good reasons abound for investors to be bullish on Selina Hospitality. It received a strategic investment of $10 million from Global University Systems (GUS), part of a potential $50 million investment contingent on additional fundraising.

Also, in 2023, the company undertook a Labor Restructuring Plan expected to save $5.8 million annually after impacting over 350 employees. Despite not opening any new properties in Q1 of 2023, SLNA aims for long-term financial health by exiting underperforming leases and optimizing cash flow.

Analysts remain optimistic about SLNA’s future, with a strong buy consensus rating from two analysts. They predict a remarkable average price target increase of 7,205.19% from the current stock price.

SLNA is a risky bet, but it effectively takes advantage of capitalizing on the long-term trends of remote working.

TRACON Pharma (TCON)

TRACON Pharma (NASDAQ:TCON) develops targeted therapies for cancer, wet age-related macular degeneration and fibrotic diseases. It is known for its ENVASARC solution.

Also, TCON has great future prospects. In Q4 of 2023, the company generated $3 million in license revenue related to its product development platform. Its net income was $0.4 million, a significant improvement from a net loss of $7 million in Q4 of 2022.

For 2024, TCON plans to complete the ENVASARC pivotal trial’s accrual in Q1 and report final data in H2.

Analysts are taking a bullish stance on TCON, giving it an average rating of strong buy with a 12-month stock price forecast of $3. This optimism is underpinned by the optimistic outcomes of the ongoing clinical trials and licensing agreements that have already begun to provide financial benefits.

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, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.