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Finance

Which Is the Best Penny Stock To Buy Below $1?

While penny stocks, assets below $5, are inherently riskier than their large-cap peers, some investors prefer them. Two penny names,
Zomedica (ZOM) and Sundial Growers (SNDL) are both now below $1. Which of these is a better buy?

As penny stocks are prone to volatility because it’s easier to influence small stocks with a low float, it’s no wonder that a lot of the companies targeted by Reddit group WallStreetBets have been penny names.

The best penny stocks to buy below $1

If a stock trades below $1, it becomes a candidate for delisting. Invariably, the company in question goes for a reverse stock split to meet listing requirements.

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Whereas many penny stocks trade below $1, two stocks are worth some attention: ZOM and SNDL. Both stocks were targeted by Reddit traders, prompting them to surge and then crash.

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It’s worth noting that both SNDL and ZOM capitalized on the rise in their stock price to raise cash by selling shares. SNDL, for instance, has more cash on its balance sheet than Tilray, which became the largest cannabis company after the Aphria merger. SNDL now has a flourishing investment business.

sndl penny stock

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ZOM also had a cash pile of $276.2 million at the end of Jun. 2021, ten times more than it had in Jun. 2020. The company has a market cap of only about $453 million, which gives it an enterprise value of $177 million.

Why ZOM and SNDL stocks have fallen

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zom versus sndl stock

Source: TIKR

As for Zomedica, its revenue in the second quarter was only $15,693. Truforma sales did not pick up in the quarter, disappointing many bulls. Although the company began commercial sales in Mar. 2021, they have been stagnant. The company attributed the slow sales to delays
by its development partner in developing fT4 and ACTH assays.

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ZOM also warned that the “market adoption of TRUFORMA® will be challenging until our fT4 and ACTH assays are available for commercial release.” The company expects ft4 assays to be available by the fall, and ACTH by the end of 2021.

zom stock trades below dollar

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As markets were expecting a positive update from ZOM, the stock reacted negatively to the earnings release. SNDL stock also tumbled after the company posted a massive loss in the quarter.

View more information: https://marketrealist.com/p/best-penny-stock-to-buy-below-dollar-one/

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