As with all speculative investments, today’s list of the best penny stocks under $1 should be approached with caution. Penny stocks are arguably one of the best ways to see outsized returns. They are also one of the most exciting. But they come with huge risks, and investors who fail to do their research are likely to fall prey to doomed or sham companies.

Not all speculative ventures are created equal. Amid the sea of ultra-low-priced securities, only a handful of penny stocks shine. Here are three of the best penny stocks under $1.

Atossa Therapeutics (ATOS)

Seattle-based Atossa Therapeutics (NASDAQ:ATOS) is a clinical-stage biotech that focuses on treatments for breast cancer treatment and other breast-related conditions.

Shares soared to insane heights shortly after going public in 2012, but shareholder value has been eroding for the past decade. However, recent developments with a breast cancer therapy could prove to be a game-changer for Atossa and its shareholders.

The company recently began a Phase 2 study on a treatment for pre-menopausal women with ER+/HER2- breast cancer, which accounts for more than three-quarters of breast cancers, according to Atossa President and Chief Executive Officer (CEO) Dr. Steven Quay.

“[P]remenopausal women diagnosed with this disease need more effective and tolerable treatment options; specifically new treatments that do not require ovarian function suppression,” Quay said.

Positive trial developments could send this penny stock soaring to heights not seen in quite some time.

Intouch Insight (INXSF)

Canadian software company Intouch Insight (OTCMKTS:INXSF) develops managed mobile software applications and software-as-a-service (SaaS) platforms aimed at helping businesses gather and analyze data to improve customer experiences. These solutions include customer surveys, mobile forms, analytics and mystery shopping.

Though this penny stock is risky, the company is coming off its most successful year in business. For the seventh consecutive year, Intouch’s organic SaaS revenue grew by double digits, rising 21% in 2022. Total revenue jumped 47% last year to a record $23.5 million, while recurring revenue increased by 35% to $21.6 million. Moreover, adjusted EBITDA shot up 33% to $2.2 million.

As Intouch continues to grow its business, shares could make a substantial run. Even just a return to the stock’s 52-week high of $0.69 would result in a gain of more than 100%.

Western Forest Products (WFSTF)

Western Forest Products (OTCMKTS:WFSTF) is a Vancouver-based lumber company that manufactures high-quality wood products.

Last year’s operating results were plagued by a rising inflationary and interest rate environment. However, the company’s three-year revenue growth rate of 27.2% is better than 95% of the industry.

Over the long term, the housing market’s fundamentals and the resultant growth in timber construction will accelerate. Therefore, picking up shares at this ultra-low price could be wise.

WFSTF is an interesting contrarian play for investors at this time. On top of the capital appreciation potential, shares yield 4.7%.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.