Penny stocks trade for $5.00 or less, and while they can be a hugely tempting proposition for some investors due to their relatively low price, they can also be intensely risky bets as they’re generally made up of fallen angels or youthful startups that have yet to, and may never, reach their full potential. We’ll look at two penny stocks catching our eye this week:
Agile Therapeutics (NASDAQ:AGRX)
This penny stock has endured its fair share of ups and downs since debuting on the Nasdaq back in 2014. The New Jersey-based women’s healthcare firm is dedicated to providing women with contraceptive options that offer freedom from taking a daily pill, but without committing to a longer-acting method. Agile Therapeutics has bet big on Twirla, a birth-control patch that’s up for final approval by the FDA on or before February 16, with the addressable US market for the patch worth US$3.8 billion.
However, this is where the risky part of penny stock investing comes in. Twirla has been rejected twice before by regulators in 2013 and again in 2014 over concerns about third-party manufacturing issues. However, the stock is up 10% today after announcing a senior secured term loan credit facility with Perceptive Advisors, which will ensure it is well funded through the end of this year.
Banco Santander (NYSE:SAN)
Santander is a major Spanish bank that has branched out into 10 major markets across Europe and North America and with over 145 million customers around the globe, it might surprise you that it is still a penny stock on the NYSE, but it is trading for just $4.40 at the minute.
That low price is a result of a failed CEO transition last year after the incumbent José Antonio Álvarez canceled his move to president due to compensation concerns. Banco Santander has been focused on building up a profile in South America recently and has seen real progress in Brazil, where underlying profit was up 18% in the most recent quarter.
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