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 May 31, 2025
Ranking of Top Stock Newsletters Based on Last 3 Years of Stock Picks
We are paid subscribers to dozens of stock and option newsletters. We actively track every recommendation from all of these services, calculate performance, and share our 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 May 31, 2025:
| Rank | Stock Newsletter | Stock Picks | S&P500 Return | Excess Return | Percent Profitable | Max % Return |
|---|---|---|---|---|---|---|
| 1. |  Alpha Picks | 64 | 70.4% | 47.0% | 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. | June, 2025 Promotion: Save $50 | |||||
| 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. | June, 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. | June, 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. | June, 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. | June, 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. | ||||||