2 Penny Stocks That Could Soar Soon
Penny stocks, defined as equities with share prices under $5, are ultra-risky investing vehicles. Companies with super-low share prices are often in financial peril, have a bad habit of excessively diluting shareholders, or (more plainly) their products simply don't sell very well. Healthcare penny stocks, however, can fall under a completely different umbrella than the typical low-priced equity.
Some healthcare companies, such as developmental or early commercial-stage biotechs, can go through a rough patch where their share prices are depressed simply because investors doubt their ability to bring a product to market, or to gain market share against an entrenched competitor. At the same time, these types of small biopharmas are also generally in need of large sums of capital to run costly trials, hire a sales force, and the like, resulting in regular bouts of shareholder dilution. Large capital raises, in turn, can have devastating consequences on a company's share price, at least in the short term.
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Source Fool.com
