Penny stocks under $1 split investors. Some see the high risk, others the high reward. We’re going to look at Blue Apron (NYSE:APRN) today because there is potential for profit in these low-priced stocks.
Penny Stocks Under $1: Blue Apron
Investors should be aware of the volatility of penny stocks. Any shares selling for under $5 usually aren’t the best. It’s simple really, nearly every company prices their IPO at $10 per share and above. So you can do the math here: if a stock is trading below $5, that means it has lost 50%+ value. It would stand to reason, then, that penny stocks under $1 could be considered a complete write-off.
But not so.
For $0.98 USD at present on the NYSE, the Blue Apron penny stock does bring a high risk for investors. But, there is potential.
Penny Stocks Under $1: Turnaround
Publicly trading since mid-2017, APRN stock went downhill almost as soon as it hit the market. The meal-kit maker went public at $10 a share, but by late 2018, this was yet another penny stock under $1.
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However, all is not lost, as a pretty major meal company may have just rescued APRN stock. A deal with Weight Watchers (NYSE:WTW) has given these shares a much-need boost. According to management, this deal will do something very important for Blue Apron without the company needing to spend much. Firstly, it will give it a loyal customer base through those who already use Weight Watchers.
Further:
“Shortly thereafter, management said that WTW deal was seeing higher-than-expected demand and that Blue Apron would be adjusted EBITDA profitable in Q1 and fiscal 2019.”
Selling for approximately $20 per share, WTW shares, by comparison, are where APRN could be in the near future. With this partnership, Blue Apron may create a niche for itself in the weight-loss meal kit marketplace. If it can do this successfully, the next few years should bring improving margins without major expenses and, as Investorplace states, “profitability will become a real possibility.”
So as a penny stock under $1 at present, these shares may be at the beginning of something much bigger.
Featured Image: DepositPhotos © archerix
