Let’s keep it real in this joint – you should generally avoid stocks under $1. Yes, they’re “cheap” but that’s not necessarily a good thing. It’s like buying $3 sushi at the local service station. In other words, I wouldn’t do it.
Fundamentally, you’re almost certainly dealing with an exponentially higher-risk profile when it comes to stocks under $1. You can forget the idea that you’re going to find a blue chip in this space. No, these are ideas that don’t qualify as middle-capitalization plays and sometimes not even as small caps.
Warnings aside, I also understand the temptation. When low-priced securities hit it out of the park, that tends to be a literal description. If you understand what you’re getting yourself into, below are intriguing (but super-risky) stocks under $1.
Vertical Aerospace (EVTL)
Billed under the industrials category, Vertical Aerospace (NYSE:EVTL) falls under the aerospace and technology subsegment. Per its public profile, Vertical engages in designing, manufacturing, and selling zero-operating-emission electric vertical takeoff and landing (eVTOL) aircraft. It primarily seeks to serve the advanced air mobility market in the U.K. Since the start of the year, shares gained 45% of equity value.
If you’ll grant me a mulligan, EVTL at time of writing trades at exactly a buck. Right off the bat, you should know it’s a wildly risky idea. In the past 52 weeks, the security suffered a loss of 43.5%. As with other air mobility hopefuls, the company is a pre-revenue enterprise. Therefore, it’s not entirely clear when profitability will arrive. Heck, it’s not entirely clear when revenues will arrive.
However, Vertical will likely generate speculative interest because of its narrative. With the underlying sector poised to hit a valuation of $12.65 billion by 2030 – implying a compound annual growth rate of 40% – EVTL could fly (no pun intended).
Canaccord Genuity rates EVTL shares a “buy” with a $1.50 target, implying 50% upside. It may be one of the stocks under $1 (or at least at $1).
Avino Silver & Gold (ASM)
Based in Vancouver, British Columbia, Canada, Avino Silver & Gold (NYSEAMERICAN:ASM) engages in the acquisition, exploration and advancement of mineral properties in its home market. Per its corporate profile, Avino primarily explores for silver, gold and copper deposits. It owns interests in 42 mineral claims and four leased mineral claims.
Since the start of the year, ASM stock gained 10% of equity value after a series of soft sessions. Now, it still has plenty to prove, with shares down almost 29% in the trailing 52 weeks. Further, the company was all over the map in terms of meeting per-share profit expectations last fiscal year. That said, analysts are anticipating a monster growth year in 2024.
Specifically, they’re projecting earnings per share of 5 cents on sales of $61.23 million. In 2023, the company only managed to break even on the bottom line while posting revenue of $43.89 million. Therefore, we could see almost 40% growth in the top line.
ASM has one buy rating with a $1.50 target, implying over 162% upside potential. It’s one of the stocks under $1 for the gambling type.
Renalytix (RNLX)
Falling under the broad healthcare segment, Renalytix (NASDAQ:RNLX) deals with the health information services space. According to its corporate profile, Renalytix develops artificial-intelligence-enabled in vitro diagnostic solutions for kidney diseases. The company offers KidneyIntelX, a diagnostic platform that deploys a smart algorithm that combines various data inputs to generate a unique patient risk score.
An intriguing idea, this healthcare play is on the move. Since the January opener, RNLX stock returned over 129% of equity value. However, it’s still relatively undervalued given how its 52-week performance is over 50% below breakeven. To be fair, Renalytix is a highly risky enterprise, with the company expanding its per-share losses beyond expectations last year.
However, in fiscal 2024, experts believe that Renalytix will post a per-share loss of 34 cents on sales of $3.6 million. Last year, it incurred a per-share loss of $1.12 on sales of $3.4 million.
Finally, analysts rate shares a moderate buy with a $4 target, implying over 305% upside potential. It’s one of the stocks under $1 if you can handle extreme choppiness.
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.
