Penny Stocks: 2 Top Stocks Under $5.00

Penny StocksIn the same way that Silicon Valley start-ups look for the next killer app, investors hunt for a company whose share price is about to explode. These “killer stocks” can see enormous price gains in a relatively short period of time, making them the perfect opportunity for growth-driven investors.

A “killer app” is slang for software products that are compelling enough to draw a huge user base, but original enough to prevent copycats. People who get in on these firms early enough make spectacular returns. Think Facebook, LinkedIn, Airbnb, and Uber.

However, I’ve adapted the term to include companies outside the narrow space of web and mobile-based applications. There’s a wide world of businesses outside (or tangential to) the internet craze.

Any company with footing in a young and vibrant industry should be as appealing to investors. I’ve searched around, and here are two reasonably-priced stocks for your consideration.


A Penny for Your Stock?

Oncothyreon Inc(NASDAQ:ONTY)

The first golden pick comes from the biotech industry. Oncothyreon Inc (NASDAQ:ONTY) is biopharmaceutical company whose share price was $3.46 at the time of writing.

Although the NASDAQ has remained flat for the year, Oncothyreon is up a whopping 82%. The intersection of healthcare and technology is one of the hotspots of finance right now, but its technical nature can be challenging to laymen investors.

For instance, we’re seeing solid advances in cancer treatment, but there are a variety of competitors to choose from. How can you know which one is poised for success without finishing a PhD in biolopharmacology?

A fairly simple trick is to look for a consensus among impartial experts. At this year’s meeting of the American Society of Clinical Oncology, Oncothyreon won accolades for its early-stage treatment for breast cancer.

The drug showed success in reducing tumor sizes among patients in a Phase 1 clinical trial. Experts considered this a significant breakthrough, fostering a sense of optimism that translated directly into capital gains.

If the company doesn’t suffer any disappointments, its stock could soar in the near future.

The Best Mining Stock Under $5.00

Coeur Mining, Inc. (NYSE:CDE)

Another stock to watch is Coeur Mining, Inc. (NYSE:CDE), a mining firm that produces gold and silver. Falling commodity prices wrecked the company’s bottom line in recent years, but don’t forget that the pendulum swings both ways.

Gold is down over five percent since January, but by contrast, Coeur has fallen 40% to $3.04 per share. Why the stark difference? Well, low prices for precious metals sent investors running for the hills. No miner can turn a significant profit at $14.00 silver, hence a correction in the market value of miners.

However, with prices as low as they are, companies are switching to survival mode. The unfortunate reality is that mining stocks deserved a wake-up call, because many were bloated and inefficient.

The tough environment is breeding a new type of mining stock. All the cost cutting results in leaner firms that are better equipped to handle price drops in the future. Meanwhile, the supply contraction will rebalance prices, lending support to commodity markets.

Let’s also remember that an interest rate hike is almost upon us. In the last five years, with the monetary stimulus as a background, we’ve seen the S&P 500 jump almost 75%. In that same timeframe, Coeur dropped by more than 82%.

By finally ending its “easy money” policies, the Federal Reserve is aiming to normalize monetary policy. But it’s too late. The bubble is already built. A rate hike will do nothing more than reveal how hollow our recovery was.

The breaking of a Fed-fueled stock market bubble would mean a resurgence in gold and silver; the likes of which would send mining stocks through the roof.

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