Penny Stock Investing: Best Stocks and Tips

Penny stocks are super high-risk investments that aren’t suitable for all investors. Then practice what you’ve learned with our free stock market simulation.

Here are some penny stocks to keep an eye on:

Symbol	Company
VTVT	vTv Therapeutics Inc.
AXSM	Axsome Therapeutics Inc.
ALQA	Alliqua Biomedical Inc.
ADIL	Adial Pharmaceuticals Inc.
BTAI	BioXcel Therapeutics Inc.

Penny stocks can also be called micro-cap stocks. While the latter are categorized based on their market capitalization, penny stocks are classified as such based on their price. A stock with a market cap between $50 and $300 million is generally considered a micro-cap. The SEC defines any stock under $5 as a penny stock.

WHAT ARE PENNY STOCKS?

Because these stocks are traded over-the-counter, there are a few added risks to consider.

They are not as liquid

Because there is a much more limited number of buyers and sellers in the OTCBB, penny stocks just aren’t as liquid. One way to remedy that is to sign up for a penny-stock service which will make finding trades much easier.

Less available information

There is much less information readily available for stocks traded OTC. It’s harder to make an informed decision about a company about which you know very little.

Manipulation

Penny stocks can be verily easily manipulated, sometimes illegally, to drive their prices up. These stocks attract many solicitors and scammers who trick unaware investors and make a lot of money doing so.

HOW TO INVEST IN PENNY STOCKS

Penny stock market

Penny stocks’ low prices mean that they are super volatile investments. Just a small change in the stock price would have a huge effect overall. This is both the allure and danger of penny stocks: High Risk, High Return . A risk-taker would be enticed to buy a huge volume of shares of a cheap stock in hopes of winning big if that price goes up a bit. This is usually the plan when buying penny stocks. Investors will scoop up tens of thousands, hundreds of thousands, even millions of shares of a stock that sells for very little per share. The idea is to get in quick and cheap, and get out fast and flush.

Many OTCBB companies are working crazy hard to climb their way up to the Nasdaq and NYSE status. Some companies on the OTCBB might be good quality, but penny stocks are just very high-risk investments and they aren’t suitable for all investors. If you can’t resist the lure of these micro cap stocks, at least make sure you do extensive research.

Where to Buy Penny Stocks

Penny stocks are often not traded on any major stock exchanges. Though the NYSE, NASDAQ and AMEX are home to some of the more established penny stock companies , they’re usually traded over-the-counter on the OTC Bulletin Board (OTCBB) and pink sheets.

HOW TO FIND THE BEST PENNY STOCKS TO BUY

Penny Stock Software and Tools

Here are some super helpful tools to use when buying penny stocks:

Penny Stock Tips

Ignore penny stock success stories that are touted on social media websites.
Sell quickly .
Focus only on penny stocks with high volume (at least 100,000 shares a day)
Don’t fall in love with a stock!!!

The Best Stock Newsletters as of June 29, 2025

Ranking of Top Stock Newsletters Based on Last 3 Years of Stock Picks

We are paid subscribers to dozens of stock newsletters. We actively track every recommendation from all of these services, calculate performance, and share the results of the top performing stock newsletters whose subscriptions fees are under $500. The main metric to look for is "Excess Return" which is their return above that of the S&P500. So, based on last 3 years ending June 29, 2025:

Rank	Stock Newsletter	Stock Picks	Average Return	Excess Return	Percent Profitable	Max % Return
1.	Alpha Picks	76	63%	40%	73%	969%
	Summary: 2 picks/month based on Seeking Alpha's Quant Rating; Retail Price is $499/yr. See details in our Alpha Picks Review.			July, 2025 Promotion: Save $100
2.	Moby.co	308	43.3%	12.3%	74%	1764%
	Summary: 60-150 stock picks per year, segmented by industry; Retail Price is $199/yr. Read our Moby Review.			July, 2025 Promotion:Next pick free!
3.	Stock Advisor	72	41.2%	6.9%	78%	258%
	Summary: 2 picks/month and 2 Best Buy Stocks lists focusing on high growth potential stocks over 5 years; Retail Price is $199/yr. Read our Motley Fool Review.			July, 2025 Promotion: Get $100 Off
4.	Value Investor	39	17.5%	6.1%	38%	410%
	Summary: 10-25 stock picks per year based on Zacks' Quant Rating; Retail Price is $495/yr. Read our Zacks Review.			July, 2025 PROMOTION:$1, then $495/yr
5.	Rule Breakers	66	40.0%	4.7%	61%	311%
	Summary: 2 picks/month focusing on disruptive technology and business models; Lifetime average return of 355% vs S&P500's 149% since 2005; Now part of Motley Fool Epic. Read our Motley Fool Epic Review.			Current Promotion: Save $200
6.	TipRanks SmartInvestor	121	10.6%	3.7%	55%	340%
	Summary: About 1 pick/week focusing on short term trades; Lifetime average return of 355% vs S&P500's 149% since 2015. Retail Price is $379/yr. Read our TipRanks Review.			Current Promotion: Save $180
7.	Action Alerts Plus	394	20.0%	3.4%	57%	220%
	Summary: 100-150 trades per year, lots of buying and selling and short term trades. Read our Jim Cramer Review.			Current Promotion: None
8.	Stock Advisor Canada	36	32.3%	0.5%	69%	378%
	Summary: 1 pick/month from the Toronto stock exchange; Retail Price is CD$199/yr. Read our Motley Fool Canada Stock Advisor Review.			July, 2025 Promotion: Save $100
Top Ranking Stock Newsletters based on their last 3 years of stock picks' performance through May 31, 2025 as compared to S&P500. S&P500's return is based on average return of S&P500 from date each stock pick is released. NOTE: To get these results you must buy equal dollar amounts of each pick on the date the stock pick is released. Investor Business Daily Top 50 based on performance of FFTY ETF.

Rank	Brokerage	Fees	Features	Sign-Up Bonus	Read Our Review
1.	Robinhood	$0	✅ U.S. stocks, ETFs, options, and cryptos ✅ Now 23 million users ✅ Cash mgt account and credit card	Free stock up to $200 with new account, plus up to $1,500 more in free stock from referrals	Robinhood Review
2.	Moomoo	$0	✅ Free Level 2 Nasdaq quotes ✅ Access to U.S. and Hong Kong markets ✅ Educational tools	60 free stocks with $5k deposit; or 25 free stocks with $2k deposit	Moomoo Review
3.	Interactive Brokers	$0	✅ Access 150+ global stock exchanges ✅ IBKR Lite & Pro tiers for all ✅ SmartRouting™ and deep analytics	Refer a Friend and Get $200	Interactive Brokers Review
4.	Robinhood Gold	$5	✅ 4% APY on cash ✅ 3% IRA match ✅ Level II data ✅ No interest on first $1,000 of margin	Save with Annual Fee	Robinhood Gold Review
5.	M1 Finance	$3 monthly 10k in assets	✅ Automated investing “Pies” ✅ Banking & low-interest loans ✅ No trading fees with scheduled trades	$75-$500 Tiered Sign-up bonus	M1 Finance Review
6.	Webull	$0	✅ Extended-hours trading ✅ Great charts and screeners ✅ Commission-free options trading	$10 and a 30-day complimentary subscription to Webull premium; $200-$30,0000 Tiered Sign up bonus	Webull Review
7.	Public	$0	✅ Fractional shares ✅ No payment for order flow model ✅ “Alpha” tool with earnings calls	$100-$10,000 Tiered Cash Account Transfer Bonus	Public Review
8.	Composer	$32 a month	✅ Invest in automated strategies ✅ Build custom strategies easily ✅ IRAs	$49 per successful referral with no limit on the number of referrals	Composer Review
9.	Stash	Growth $3; + $9 Month	✅ Stock-Back® debit card rewards in fractional shares ✅ Auto-invest and budgeting tools ✅ Curated theme portfolios	$5 when you invest $5	Stash Review
10.	Acorns	Bronze $3; Silver $6; Gold $12 a month	✅ Automated investing portfolios ✅ ESG curated portfolios ✅ Acorns Early Invest for Kids' Accounts	Get a $20 bonus when you start saving & investing	Acorns Review
11.	Etoro	$0	✅ CopyTrading™ to follow top traders ✅ Trade U.S. stocks, ETFs, and crypto ✅ Trades with themed portfolios	$10 Crypto Sign-Up Bonus	Etoro Review
12.	Cash App	$0	✅ U.S. stocks and bitcoin; $1 minimum ✅ Peer-to-peer payments ✅ Beginner-friendly financial ecosystem	Up to $200 in free overdraft coverage and earn 4% on cash	Cash App Review
Fees, features, sign-up bonuses, and referral bonuses are accurate as of May 31, 2025. All information listed above is subject to change.