There’s a trade that’s generally accepted anytime someone makes an investment. Ultimately, they’re trading risk for potential reward. In the least risky investments, such as CDs, savings accounts, bonds, and more, returns are bleak. As you start taking on more risk, for instance by investing in stocks, your potential return starts to improve. 

Then you get into high-risk investments. Companies represented by penny stocks, for example, have a high risk of failure. These are usually:

• Young companies — These companies don’t have a product on the market yet.
• Other companies — Some companies have been around for a while but have failed to gain traction among their target audience.  These companies are constantly hitting the drawing board. 

While the risk is high, both of these types of companies succeed every once in a while. And while most investments in penny stocks may result in losses, those that succeed have the potential to produce monumental gains for their investors. Those gains can be in the tens of thousands of percentage points. 

While you shouldn’t risk your mortgage payment on penny stocks, if you have $250 lying around that you’re able to take a gamble with, you may want to consider diving in. Here are a few penny stocks to consider right now. 

Key Points: 

• Though penny stocks can be risky, they can also produce meaningful returns. 
• Insiders are buying ThredUp and analysts expect gains. 
• Bluebird Bio comes with plenty of risk, but the stock could fly if things go right. 
• If you’re looking for opportunities to buy stocks low and sell them high, look no further than our free Discover “the Next NVIDIA” report. You’ll learn about two low-cost stocks we believe will climb by 10X or more ahead! 

Analysts and Insiders Expect ThredUp to Climb

There’s a strong probability that you’ve heard of ThredUp (Nasdaq: TDUP). Founded in 2009, the company has created an online consignment platform for clothing and apparel, specifically focusing on options for women and children. 

While there have been questions surrounding the company’s ability to grow quickly, recent earnings reports show consistent growth in active members. Not to mention, insiders have been snapping shares up, suggesting that they are confident in the future of the company. 

For example, Noam Paransky, Director and Innovation Officer at ThredUp, recently purchased 90,000 shares of the stock for a total of $72,000. That purchase was followed by another purchase of 40,000 shares on September 6th by the Director. As a result, he now owns 546,444 shares of the company valued at approximately $491,799. 

In another transaction just a couple of days ago, Ian Friedman, another director of the company, purchased 25,000 of ThredUp. The transaction value was $18,000, bringing Friedman’s total holdings in the company to 310,748, representing a value of about $279,673.

Perhaps the fact that insiders are diving into the stock is one of the reasons analysts have such a positive opinion. Six of them are currently weighing in on the stock.  Four rate it a “Buy,” and two rate it an “Outperform.” The median price target stands at $3.00 per share, representing the potential for growth in multiples over the stock’s current price of $0.90 per share.  

Bluebird Bio Is a Riskier Play That Could Pay Off

Anytime you invest in penny stocks, you’re taking a risk. But, the opportunity I’ll outline next should only be considered by those with the highest appetite for risk. That opportunity is in Bluebird Bio (Nasdaq: BLUE), an innovative company that has developed multiple treatments for rare conditions. 

So why is the stock trading as a penny stock? Well, it’s facing some challenges. 

Two of the company’s products, Zynteglo and Skysona, target rare indications with a highly limited population. The first of these only addresses 1,500 patients in the United States, while the second only addresses about 40 patients per year. It can be difficult to build a business on such a limited population. 

On the other hand, the company recently received approval for Lyfgenia, a treatment for sickle cell disease. The good news for the company is that there are 20,000 potential takers of this treatment in the United States. 

But the company faces another hurdle. Unfortunately for Bluebird Bio, Vertex Pharmaceuticals and CRISPR Therapeutics recently received approval for Casgevy, their product for the same indication. Moreover, Casgevy has fewer warnings and is less expensive. 

So, there seem to be two roads to success for Bluebird Bio, and both may be challenging. The first would be to consider reducing the price of Lyfgenia, making it more competitive when compared to Casgevy and potentially giving the company a larger share of the United States sickle cell disease market. On the other hand, considering the company’s innovative therapies and the team behind them, it could be a strong acquisition target, though there has been no news of any takers as of yet. 

Considering this, it’s not surprising that analysts have mixed opinions. Of 12 analysts weighing in on the stock, six of them sit right in the middle with a Hold rating. There are also two Buy, one Outperform, one Underperform, and one Sell rating. Moreover, one of the analysts declined to provide a rating. Nonetheless, the median price target is $3 per share, suggesting that if things go well, the stock could gain in multiples ahead. 

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