Hey guys and gals,
$2.44 trillion!
That’s how much this hot sector is projected to be worth in just 7 years.
Sure, there are big players in this industry.
But there are also smaller, barely-known companies that are working on some game-changing projects.
Some of these penny stocks might be risky and volatile…
But if I know what to look out for and play my cards right, I might just be able to find some hidden treasures in these sectors.
Biotechnology
A massive $2.44 trillion.
That’s the size the global biotech market is projected to be worth in 2028, as it grows at a compound annual growth rate of almost 16% — according to Grand View Research.
The sector is often the focus of most investors and traders because these stocks offer highly speculative opportunities — something that others do not.
You might have heard of Pfizer Inc., GlaxoSmithKline, Moderna, and other stocks surge as the fight for the new COVID variant continues.
But there are also smaller, barely-known companies in this sector that are involved in early phase trials of game-changing drugs and disrupting tech in the global healthcare system.
The reality is, the general opinion of these stocks is that they’re sketchy!
As I said, these are mostly small, growing companies that are usually desperate for cash. The cash flow is their lifeblood as it allows them to continue product development, testing, and trials.
But…
Biotech penny stocks are also extremely volatile — which opens up lucrative opportunities for traders that play their cards right. Positive results in a trial phase can produce a favorable reaction in the stocks and send it soaring.
Just don’t get caught up in the hype.
I like to pay attention to everything going on in the industry, not just the positive stuff only.
It’s important for anyone looking to trade biotech stocks to note that momentum can last for a short period OR months, depending on the catalyst for the move.
Technology
Technology has transformed our lives, that’s for sure.
Besides the big players — like Apple, Facebook, and Microsoft — developing and building consumer electronics and software, other companies are focused on IT services such as cloud computing.
But most of these tech companies that have changed the way we do things started out small…
And there are several up-and-coming tech companies trading in the penny stock market today.
These stock prices can soar if their underlying companies’ products become widely adopted.
Just like other sectors, there is very high volatility.
New approvals from governing agencies, earnings reports that exceed estimates, and global relations are all factors that can positively affect these stocks and send them soaring.
But how do you identify the companies that have good potential?
There are several factors that I look out for to help filter out the worthless stocks like…
Positive earnings per share: This is a quick way to measure a company’s profitability. The EPS of a stock is calculated by dividing the price of a stock by its total number of outstanding shares.
Low price-earnings ratio: The P/E ratio is a pointer to know if a stock is undervalued or overpriced.
Metaverse
These days, metaverse stocks are a new and hot topic in the market.
For those who are new to the concept…
Yahoo Finance defines it as…
“…a three-dimensional virtual online environment that allows users to ‘enter’ a fully virtual social network to ‘live’ their lives in it. Derived from a combination of ‘meta’ and universe’, a metaverse also includes virtual interaction with physical objects and digital transactions.”
It’s just a fancy name, really.
How big is the market or is it just hype?
Well, the metaverse industry is believed to be on a strong growth trajectory.
Reports and Data estimate that the metaverse industry might grow at a compound annual growth rate of 44.1% and in 7 years, will stand at a massive $872 billion.
Other analysts like Bloomberg Intelligence expect the metaverse market to hit the $800 billion mark by 2024.
Just 2 years from now!
Right now, there are big names in the industry like
- Microsoft (NASDAQ: MSFT)
- Advanced Micro Devices (NASDAQ: AMD)
- NVIDIA (NASDAQ: NVDA)
But there are a ton of smaller companies that have gained attention and are working hard to cover more market share.
These companies are on the “cheaper” end of the spectrum…and are currently penny stocks. Top examples include;
- Inco Ventures (NASDAQ:BBIG)
- Alpha Esports Tech (OTC: APETF)(CSE: ALPA)
- Meta Materials (NASDAQ: MMAT)
Please note: Like any new and exciting industry, volatility is something traders should prepare for.
Conclusion
When people think of penny stocks, they imagine low-quality and high-risk stocks with high volatility.
That may not be far from the truth.
But if I play my cards right, I’m confident that over time I can discover some hidden treasures in unexpected places…
…especially in an evolving technology sector or a new and exciting one like the metaverse where the companies are looking to grow.
The biotechnology sector can be rewarding and equally risky with penny stock prices doubling overnight – and suddenly crashing at the same pace, especially due to bad trial results, side effects, or stock dilution.
