Invest in Biotech Penny Stocks in 2016

January 9, 2016

8:00 pm

Penny stocks – low cost, typically small companies or those just starting out – offer a fantastic opportunity for investors who don’t have the capital to drop on the big names. They’re also a good place to start learning the rules of investing; when you make a mistake in your penny stock choice, you won’t lose quite so big. On the other hand, when a penny stock takes off, you’re well positioned to reap the benefits.

If you want to invest in some penny stocks in 2016, it’s important to do your due diligence first. A little research will yield useful data on which penny stocks are on an upward trend and which to avoid.

Here are the optics on 4 hot penny stocks for the coming year.d

Biotech Prospects

Biotech is a promising field when it comes to penny stocks. Because of rapid innovation, these companies can explode overnight. Two biotech penny stocks with strong potential in the coming year include Curis, Inc. and Genetic Technologies Ltd.

Curis, Inc. (NASDAQ: CRIS) is a biotech company focused on cancer treatment and their clinical trials of an orally administered inhibitor molecule are yielding strong results. For some, CRIS may not seem like it’s heading in the right direction, with 2015 second quarter revenues showing a significant decrease. However, due diligence would show that this decrease was due to a specific licensing fee decrease and not product failures or other corporate shortcomings.

More important to watch in 2016 is their investment in research and development. CRIS has invested highly in its well regarded clinical programs and they’re getting results. And while shares fell by a few cents in the second quarter, it has since recovered in the second half of the year with shares up 74 percent. Now is the time to get in on this stock.

A second biotech penny stock with good prospects in 2016 is Genetic Technologies Ltd. (NASDAQ: GENE). This company works in diagnostic medicine, particularly related to women’s health issues. Known especially for its breast cancer assessment product BREVAGenplus, they are currently working to further expand their market.

The broad market base, as well as GENE’s clinical trial investments, yet again make this a strong prospect for 2016. Specifically, with one of those trials due to end within FY16, investors have a specific project to watch. Up 48.5 percent in 2015, GENE is set up to do very well in the coming year.

Names You Know

Most people don’t track biotech research in their day-to-day lives, but there are also some other common names that penny stock students should be watching. If you’re looking to invest in a stock whose work and products you can connect with, Groupon, Inc. and Avon Products, Inc. both come to mind as strong contenders.

Groupon, Inc. (NASDAQ: GRPN) has become a fixture in our daily lives, offering cut-rate products and services on a massive scale, yet as a stock GRPN is really still establishing itself. A quick study shows that GRPN has made steady revenue gains, but its stock price has seen a mild decline. However, due to a corporate buyback program, the company has a lot of room to grow in 2016.

Avon Products, Inc. (NYSE: AVP) is even more of an everyday fixture than Groupon, though one you may associate with your elderly aunt, rather than especially innovative development. Still, with operations in sixty countries and distribution in 41 more, AVP is a big company with a small price tag.

What makes AVP a hot penny stock contender? A combination of global reach and improved 2015 revenues position it to continue its upward trend in 2016. Furthermore, AVP is paying dividends – a redistribution of company profits to shareholders – something that many penny stocks are not yet in a position to do.

If you’re looking to invest in penny stocks in 2016, these 4 are just the beginning of a wide and varied marketplace of options. Do your research, keep careful watch on the numbers, and proceed with caution. Reckless investing is not a recipe for success. A student of the market is always mindful that situations can change at a moment’s notice.

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Anna is a freelance writer, researcher, and business consultant from Olympia, WA. A columnist for Entrepreneur.com, iMediaConnection.com and more, Anna specializes in entrepreneurship, technology, and social media trends. When she isn't writing, she's outside on her bike and contemplating her eventual trip to graduate school. Follow her on Twitter and LinkedIn.

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