If You Can Only Buy One Penny Stock in May, It Better Be One of These 3 Names

Stocks to buy

Penny stocks carry a great deal of risk. It’s why investors are often told to steer clear of them.

Many penny stocks typically trade over the counter and rarely on a major exchange. And about 90% of them fail. It’s why we include a warning at the tail-end of the article, and why the U.S. SEC has issued warnings against them. 

While you may get lucky and uncover the next Apple (NASDAQ:AAPL) or Advanced Micro Devices (NASDAQ:AMD) in the bunch, you have to dig through a lot of garbage. That’s not to say it’s impossible. It’s just while looking out for No. 1, just be sure not to step in No. 2 out there.  Take the time to do due diligence with company and industry fundamentals and SEC filings and see if company insiders believe in the company, too.

With that, here are a few penny stocks to buy that look interesting after a good deal of due diligence. 

Identiv (INVE)

Source: SWEviL / Shutterstock

Identiv (NASDAQ:INVE), a technology firm specializing in security technology systems, including access control products, and services related to identity management, physical security, and RFID systems, saw its stock plummet from about $8.50 to $4.19 on earnings.

However, insiders are still bullish. In late May, director Gary Kremen bought 25,000 shares at $4.14. The transaction was valued at about $103,500. Chief Executive Officer Steven Humphreys also picked up a total of 20,000 shares around $4.30 each for just over $85,000.

Oversold, INVE now sits at support dating back to early 2020. From its current price of $4.19, I’d like to see INVE initially refill its bearish gap around $7 a share. Better, three analysts have a consensus strong buy rating on the stock with a target price of $8.25.

Lake Street, for example, has a buy rating on the INVE stock with a price target of $8 a share at the moment.

Rekor Systems (REKR)

Source: Al Serov / Shutterstock.com

Another one of the top penny stocks to buy is Rekor Systems (NASDAQ:REKR), which is leveraging AI and machine learning to identify infrastructure concerns for transportation, public safety and urban mobility. One of its key solutions is Rekor One — an AI-powered roadway intelligence platform.

Most recently, the company said its first-quarter gross revenue jumped 58% to $9.8 million year over year. Recurring revenue jumped 18% to $5 million. The company also gained on news it secured a patent for privacy-enhanced traffic management technology. It’s also seeing interest on news it partnered with MS2, a leader in Transportation Data Management Systems.

Better, just days ago, REKR Executive Chairman Robert Berman bought 100,000 shares for $133,500 at an average price of $1.3352. CEO David Desharnais also picked up 5,000 shares of REKR in late May at about $1.37 per share. At the moment, REKR trades at just $1.59. From here, I’d like to see to its prior high of $4 initially.

Allogene Therapeutics (ALLO)

We can also look at Allogene Therapeutics (NASDAQ:ALLO), a clinical-stage biotechnology company with a focus on pioneering the development of investigational allogeneic chimeric antigen receptor T cell products for cancer and autoimmune disease.

Granted, the stock just pulled back after pricing a $110 million offering, but we are encouraged by director Arie Belldegrun’s nearly $6 million purchase of 2.07 million shares on May 16. In addition, earnings haven’t been too shabby either. Its Q1 EPS loss of 38 cents beat by three cents. Meanwhile, revenue of $22,000 – down 57.69% year over year – beat by $11,570.

“We are very proud of the progress we’ve made across our portfolio, in particular the transformative potential of our pivotal ALPHA3 trial with cema-cel which is expected to read out in 2026. Securing the EU and UK rights reinforces our conviction in the cema-cel program,” said David Chang, M.D., Ph.D., President, Chief Executive Officer and Co-Founder of Allogene. 

On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.

Read More:Penny Stocks — How to Profit Without Getting Scammed

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

Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.

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