At a time when many investors are rotating out of speculative penny stocks, others continue to embrace the risk-reward dynamic. Stocks that trade for under $5 carry a certain amount of risk. Many of these companies are unprofitable, and some may generate little to no revenue.
Plus, in almost every case, these are small-cap companies. Small-cap stocks have been beaten up in the last several years. And even with the Russell 2000 showing some signs of growth, it’s not being seen throughout the broader small-cap sector.
