When it comes to deciding whether you should acquire penny stocks or not, the answer is no. Okay, so we’re done here, right?
Of course, human nature being what it is, people are going to place wagers. Fundamentally, the issue with penny stocks is that this segment really blurs the line between investment and legalized gambling. More often than not, people lose their shirts in this corridor of the equities market. You’ve got to heed the warnings before you participate.
Nevertheless, the one aspect that keeps generations of investors piling into this arena is the law of small numbers. A tiny catalyst – whether rational or not – can lead to enormous gains in a short period of time. However, the opposite is also true. You can lose practically everything in a blink of an eye.
If you can accept this reality, maybe – just maybe – these penny stocks could be of interest to you.
Clene (CLNN)
Listed under the broad healthcare sector, Clene (NASDAQ:CLNN) is a biotechnology firm. Specifically, its clinical-stage pharmaceutical business focuses on the discovery, development, and commercialization of novel clean-surfaced nanotechnology (CSN) therapeutics. Per its public profile, Clene’s lead drug is CNM-Au8, which is involved in various clinical trials addressing amyotrophic lateral sclerosis (ALS).
According to Spherical Insights, the global ALS treatment market size may reach a valuation of $901.7 million by 2030. If so, that would imply a compound annual growth rate (CAGR) of 6.2% from 2022. Given the fact that Clene’s market capitalization is only a little bit above the nano-cap threshold of $50 million, on paper, there’s tremendous upside potential for CLNN.
However, it’s a tricky narrative. For the current fiscal year, experts believe that Clene will post a loss per share of 30 cents on revenue of $440,000. That’s not exactly encouraging since last year, the company generated sales of $654,000.
Here’s the thing: experts also believe that for fiscal 2025, revenue could clock in at $5.46 million. If so, we’re talking a gargantuan growth rate, making CLNN a possibly worthwhile idea among penny stocks.
aTyr Pharma (LIFE)
Another biotechnology firm, aTyr Pharma (NASDAQ:LIFE) engages in the discovery and development of medicines based on novel immunological pathways. Its lead therapeutic candidate is efzofitimod, a selective modulator that is in Phase 3 clinical trials for pulmonary sarcoidosis. The therapeutic is also in Phase 1b/2a trials for addressing other interstitial lung diseases (ILDs), such as chronic hypersensitivity pneumonitis and connective tissue disease-related ILD.
According to Future Market Insights, the global lung disease therapeutics market was projected to reach a valuation of nearly $83.4 billion last year. Moreover, experts in the field believe that the segment could hit $152.37 billion by 2033. If so, that would represent a CAGR of 6.2%. Given the micro-cap profile of aTyr, speculators of penny stocks might have an intriguing opportunity with LIFE.
You know the drill. Even with the large total addressable market, aTyr is risky as you-know-what. However, analysts anticipate revenue in fiscal 2024 to land at $2.62 million. That would be 642.2% higher than last year’s print of $353,000.
Not only that, they’re looking for sales of $9.26 million in fiscal 2025. That would be 253.4% year-over-year growth, meaning LIFE is one of the penny stocks to watch.
Cybin (CYBN)
Yet another biotech enterprise, Cybin (NYSEAMERICAN:CYBN) is a distinct player that should catch plenty of speculators’ attention. A clinical-stage biopharmaceutical firm, Cybin focuses on developing psychedelic-based therapeutics. According to its corporate profile, the company’s development pipeline includes CYB003, a deuterated psilocybin analog, which is in Phase 1/2a clinical trial to treat major depressive and alcohol use disorders. It also has another drug candidate that addresses generalized anxiety disorders.
Based on data from Acumen Research and Consulting, the global psychedelic drugs market reached a valuation of $2.6 billion in 2022. By 2032, the sector could be worth $7.1 billion, representing a CAGR of 10.9%. Moreover, as the medical community potentially embraces psychedelics to address certain conditions, this projection could turn out to be conservative.
Whatever the case, there’s a lot of anticipation among market gamblers that CYBN could be a hidden-gem opportunity. As InvestorPlace contributor Tyrik Torres mentioned, it could be one of the penny stocks to turn $1,000 into $1 million.
What’s really convincing is that CYBN carries a unanimous strong buy view among covering experts. As well, the average price target stands at $4.50. If you want a 10-bagger, this could be it.
Penny Stocks
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, Josh Enomoto 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.